PBX and SIP: Learn the Basics

PBX systems have been at the heart of business communication for decades. PBX (private branch exchange) systems use conventional telephony hardware, such as phones, switches or exchangers, and routers, to organize networks of business phone lines and facilitate calls. However, physical PBX systems are limited and offer old-school legacy calling capabilities.

When 49% of businesses say legacy tech is hurting their operations, holding onto outdated telephony isn’t an option. Knowing how these networks have traditionally worked and how they can limit your organization’s communications will set the stage for making strategic, effective decisions around improving your business’s systems.

When comparing different telephone solutions, a business phone system like Hosted PBX or SIP Trunking can enhance communication capabilities, manage costs, and adapt to growth. Your company can update to VoIP phone systems that connect to the internet instead of a PBX. Alternatively, you can update to SIP trunking for small businesses, which offers digital telephony and VoIP to access the best of both worlds. Businesses that fully understand how PBX and SIP relate to each other are better poised to build and enhance their organizations.

What is PBX?

Definition of PBX

A Private Branch Exchange (PBX) is a private telephone network that allows businesses to manage their internal phone systems and connect to the public switched telephone network (PSTN). Essentially, a PBX system enables multiple phone lines to be connected to a single external phone line, facilitating both internal and external communications. This setup allows businesses to make and receive phone calls efficiently, as well as manage internal calls between employees.

Traditionally, PBX systems have relied on physical hardware, such as phones, switches, and routers, to establish and manage networks of business phone lines. These systems have been the backbone of business communications, providing a reliable way to handle large volumes of calls. By connecting to the public switched telephone network, PBX systems ensure that businesses can communicate seamlessly with clients, partners, and other external parties.

The History of PBX Systems Explained

In the past, if a business needed hundreds of extensions, it required an independent switching facility. A telephone exchange for a company could take up an entire room, where mechanical circuits switched calls to connect subscribers.

Back then, it didn’t make sense to run hundreds of lines from the phone service provider to every desk that required calling capabilities. Therefore, companies ran trunk lines from an on-site switching facility. From there, the trunk lines served each extension. This arrangement was known as a Private Branch Exchange (PBX).

PBX evolved from the Key Telephone System, which previously required manually selecting outgoing lines. Connections became more automated with PBX, which used device extension numbers to more easily and efficiently select the appropriate lines between callers. It became a single streamlined business tool for routing calls through network channels, such as VoIP or ISDN.

This allowed companies to create and customize their own telephone networks. Employees could collaborate internally with each other and connect externally with clients, shareholders, and business partners without relying on switching facilities. This system reduces the amount of physical equipment required.

Today, the infrastructure required to expand the capabilities of mass communication networks is again shrinking, with PBX accounting for 40% of all network-driven unified communications sales. IP PBX systems, operating over the internet, have further evolved PBX technology by offering greater flexibility, integration with cloud technology, and enhanced operational efficiency.

Transmitting Phone Calls Over the Internet

As the internet continues to fundamentally change how business operates, the cloud networking infrastructure is bringing cutting-edge phone networking tools into the hands of even budget-conscious SMBs. A startup company with any number of extensions can now set up a commercial-grade PBX system without lots of equipment, real estate, or cash—and they can do so in mere minutes.

An Internet Telephony Service Provider (ITSP) facilitates the deployment and management of VoIP communications, allowing businesses to quickly implement these systems without the need for on-premise hardware. ITSPs manage all aspects of the service, enabling companies to focus on their operations rather than technical maintenance and upgrades.

The key is Voice over Internet Protocol (VoIP), which lets companies transmit calls as data packets over the internet. This method replaces the need for traditional phone lines because VoIP allows you to send voice and other communications through data packet exchange, similar to almost any other web activity.

However, not all VoIP providers are created equal. Some restrict calls to only those using the same service, while other providers enable VoIP calls to any local, long-distance, mobile, and international phone number. Further, some providers only allow connection through a computer or VoIP phone, but there are also VoIP adapters that work with traditional telephones.

As VoIP is brought to the cloud, the most dedicated service providers are delivering much more polished PBX solutions that are just as user-friendly as they are versatile and capable.

Getting the Most From VoIP

Despite the improvements of VoIP-based PBX over the Key Telephone System, businesses still need to route calls differently than regular telephone users, sometimes in highly intricate ways. Nowadays, VoIP PBX technology can redirect phone calls through virtual endpoints over the internet much more fluidly and automatically.

The most advanced PBX systems do more than transmit voice signals. With a VoIP service, companies can streamline their entire operations strategies, expanding their communications capabilities with game-changing new features, including:

• High-quality video calls

• Multi-user conference calls

• Collaborative instant messaging

• Thorough Call Data Records

• Software and app integrations

• Direct Inward Dialing (DID) options

• Flexible, customized pricing

• Emergency 911 support

• Near-instant scalability

• Bandwidth controls

• A simple platform with a user-friendly control panel

• Oversight of the entire network from a single pane of glass

As the application of VoIP continues to advance and integrate more deeply into companies’ entire cloud infrastructure, the possibilities of cloud-based PBX are virtually limitless.

What is SIP (Session Initiation Protocol)?

Definition of SIP

Session Initiation Protocol (SIP) is a signaling protocol that enables internet-based calling and video conferencing. SIP acts as a set of instructions that devices use to initiate, manage, and terminate voice and video communication sessions over the internet. This protocol allows users to make and receive phone calls using a VoIP (Voice over Internet Protocol) service, making it a cornerstone of modern phone systems.

SIP is widely used in various communication solutions, including hosted PBX and SIP trunking, to provide a reliable and efficient way to manage phone calls and other communication services. By leveraging the internet protocol, SIP facilitates seamless communication, whether it’s for voice calls, video conferences, or other multimedia interactions. This makes SIP an integral part of contemporary business phone systems, enabling organizations to stay connected in a digital world.

SIP – How PBX Connects Extensions

Just as an analog enterprise-grade PBX system requires trunk lines to manage switching facility operations, extension lines over internet-based PBX are trunked through a process called Session Initiation Protocol (SIP).

SIP is how PBX systems connect to the internet. SIP initiates, maintains, modifies, and terminates real-time voice and video connections over the internet. Because it’s fundamentally digital, the amount of infrastructure is hardly any different from any other server-based networking service, and the system can be customized and continually modified with incredible ease. An IP PBX phone system offers the capabilities and flexibility of a hybrid solution, combining both onsite and cloud-hosted services to leverage existing technology while integrating new cloud services.

SIP and PBX Go Hand in Hand

To support telephony and other communications infrastructure to the cloud, businesses must partner with reliable and experienced SIP trunking providers. For companies with legacy phone systems that work just fine for their purposes, SIP can still route calls by using a SIP analog/digital gateway.

Such a gateway allows companies relying on traditional PBX trunking to still enjoy many of the features of a modern PBX system built from the ground up. Unlike traditional hardlines, SIP trunking is more reliable, flexible, and easier to manage. It’s also fast and simple to deploy across an entire organization, even when lacking a centralized location.

Because of these benefits, many organizations of all sizes have already transitioned to cloud-based communications, and several more are following suit. This technology is becoming increasingly popular because it gives businesses greater control over their communications, which take place in an increasingly digital space. For instance, companies can manage SIP trunking features internally and through a single user-friendly interface. An internet telephony service provider (ITSP) can manage all aspects of SIP trunking services, allowing businesses to focus on their operations rather than technical maintenance and upgrades.

SIP trunking lets business leaders develop customized solutions for their unique needs with greater precision and oversight. Typically, businesses use a handful of conferencing and PBX services, and the best SIP trunking provider ties those settings together. This technology is especially vital because a significant number of employees are now working from home, in remote locations, or both.

As more companies gravitate toward digital communication, a growing number of SIP service providers enter the market. However, this flood of potential options creates a new problem for business leaders: finding a SIP trunking company they can trust.

VoIP vs. SIP: Differences and Advantages

When you’re shopping around for an improvement to your business’s analog phone systems, VoIP service and SIP trunking can seem the same. However, VoIP services offer greater flexibility and scalability compared to SIP trunking, which relies on traditional PBX systems. There are several key differences to keep in mind:

• Multimedia Communications: Modern internal and external communications rely on far more than simple telephony. In addition to one-to-one calls inside and outside the building, your employees need to be able to manage web conferences, video calls, group calls, and presentations. VoIP systems can only handle voice data, but SIP trunks can manage voice, images, data, and video. If your business depends on faxing capabilities, SIP is the go-to solution for fax DID and fax-to-email features.

• Reliance on PBX Networks: This is a key difference, and it may be a pro or con, depending on your existing setup. SIP trunking relies on a preexisting PBX infrastructure within the building. It opens the network so you can run multiple concurrent communications across existing lines. However, VoIP doesn’t rely on a physical PBX at all. Instead, it uses the internet—via hosted PBX—to connect people. If you already have a PBX system, SIP trunking is an easy solution. If you don’t, VoIP is the simpler option.

• Reliance on the Internet: VoIP systems run entirely online. This is great if your building has a reliable connection or your teams are scattered in remote locations. SIP trunking, on the other hand, can use phone lines. It can also utilize the internet or failover processes with backup lines, depending on how your network was set up.

These three main differences showcase how critical having a PBX is when considering SIP trunking as a viable multimedia communications option. Without a physical PBX, you must turn to VoIP and hosted PBX services. With a good PBX, you can be much more versatile.

Hosted PBX: A Modern Phone System Solution

Advantages of Hosted PBX

Hosted PBX is a cloud-based phone system solution that offers a range of advantages over traditional PBX systems. By moving the PBX infrastructure to the cloud, businesses can enjoy the benefits of a modern phone system without the need for on-premises equipment or maintenance. Here are some key advantages of hosted PBX:

• Cost Savings: Hosted PBX eliminates the need for upfront capital expenditures on hardware and infrastructure. Businesses can avoid the high costs associated with purchasing and maintaining physical PBX equipment.

• Scalability: Hosted PBX solutions can be easily scaled up or down to meet the changing needs of businesses. Whether you’re expanding or downsizing, hosted PBX can adapt to your requirements without significant hassle.

• Flexibility: Hosted PBX allows businesses to make and receive phone calls from anywhere with an internet connection. This flexibility is particularly valuable for remote work and mobile employees, ensuring they stay connected regardless of their location.

• Reliability: Hosted PBX solutions are typically more reliable than traditional PBX systems, with built-in redundancy and failover capabilities. This ensures that your phone system remains operational even in the event of hardware failures or other issues.

• Maintenance: Hosted PBX solutions are maintained and supported by the service provider, reducing the need for in-house IT support. This allows businesses to focus on their core operations while the service provider handles the technical aspects.

Overall, hosted PBX is a modern phone system solution that offers a range of benefits and advantages over traditional PBX systems. By leveraging hosted PBX solutions, businesses can enhance their communication capabilities, improve efficiency, and reduce costs.

Which SIP Service Provider Is Right for You?

Determining that SIP trunking services are the right fit for your organization is the first step. Zeroing in on the right service provider is just as important and can be even trickier. Consider these factors:

Call Quality 

Calls are the first interaction many prospective customers will have with your brand, and using a reliable VoIP service is crucial to ensuring high-quality calls and making a critical first impression. Static, dropped calls, poor audio quality, and even a hard-to-navigate menu can make your brand seem unprofessional. Research different companies to determine which ones have the best call quality reputation.

Call Volume

Assess your business’s needs regarding total call volume, including video calls and web conferences, and consider an IP PBX phone system for its capability to handle high call volumes efficiently. The total amount of traffic will impact which service plans are right for you and which service providers have the right capacity.

Seamless Implementation

Porting your phone numbers, organizing call forwarding and routing, and transitioning to a brand new phone system can be intensely disruptive, even if you already have the hardware in place. Look for service providers that will do the legwork to create an implementation plan with minimal disturbance or business interruption. An Internet Telephony Service Provider (ITSP) can facilitate the deployment and management of hosted PBX systems, allowing businesses to quickly implement VoIP communications without the need for on-premise hardware.

As you review different service providers, use this quick checklist of essential items to ensure the service provider meets your technical requirements:

• Automated provisioning for streamlined, ready-built PBX systems

• Servers dedicated to routing only SIP messages, ensuring bare minimum latency

• Flexible pricing models that allow you to pay for only what you need and try new features with minimal risk

• Real-time Call Detail Records (CDR) database population and bulk CDR downloads

• Proxy of media to the client’s server at their request

• Large DID (Direct Inward Dialing) footprint

• US48 (lower 48 states) phone porting

• PSTN forwarding

• On-demand channel upgrades/downgrades

• Quality of Service (QoS) traffic prioritization options

• Secure payment processing entrusted to reputable tokenized payment systems

Benefits of SIP Trunks and Trunking Services

Even if your organization is struggling to make do with your analog PBX system or disconnected internet communication tools, getting stakeholders to agree to a plan and move forward with a change can be challenging. IP PBX systems, which operate over the internet, enhance traditional PBX systems by offering greater flexibility, integration with cloud technology, and improved operational efficiency.

Emphasize the business benefits of SIP trunking services, such as:

Use of Your Existing PBX System

Some legacy decision-makers may feel that abandoning your IP PBX phone system altogether is a bad idea. Whether they’re powered by knowledge about SIP trunking or just the sunk cost fallacy, this reluctance may prevent your organization from moving forward with VoIP.

SIP trunking uses the existing PBX network to offer multimedia communications, so it takes advantage of past investments and offers more possibilities than VoIP.

Multimedia and Omnichannel Communications 

VoIP service is essential for providing comprehensive communication solutions for today’s B2C and B2B organizations. Successful businesses utilize fax, SMS, video conferencing, conventional telephony, and endless channels in between. SIP trunking gives you access to text, data, and video-based communications, not just traditional voice calling.

Consistency Across Your Communication Systems

SIP trunking isn’t just an alternative to VoIP. You can use both SIP trunking and VoIP services to create a custom solution for your organization’s communication needs. This means you can create similar communication ecosystems for in-office and remote employees and systematically standardize how business locations across the country work.

An internet telephony service provider (ITSP) plays a crucial role in ensuring consistent communication by managing the deployment and maintenance of these systems, allowing businesses to focus on their operations without worrying about technical issues.

Elevating the Conversation

In the age of technology and digital transformation, adopting a business phone system is essential for modernizing your communication infrastructure. Dedicated telecom experts and software developers have worked tirelessly to create the highest performing and most reliable PBX services possible. Adopting SIP solutions for your existing PBX system is a viable and effective way to update your communications.

With the right SIP provider, expert service technicians can show you how to achieve maximum cost savings and boost communications efficiency for your company, just as they’ve done since the beginning of internet-based PBX systems. Get started today to find out how SIP.US can introduce your organization to a new level of commercial-grade PBX service with enterprise-level features at budget-friendly prices.