Answer Posted / susan

A private branch exchange (PBX) is a telephone exchange
that serves a particular business or office, as opposed to
one that a common carrier or telephone company operates for
many businesses or for the general public. PBXs are also
referred to as:
PABX - private automatic branch exchange
EPABX - electronic private automatic branch exchange

PBXs make connections among the internal telephones of a
private organization — usually a business — and also
connects them to the public switched telephone network
(PSTN) via trunk lines. Because they incorporate
telephones, fax machines, modems, and more, the general
term "extension" is used to refer to any end point on the
branch.

PBXs are differentiated from "key systems" in that users of
key systems manually select their own outgoing lines, while
PBXs select the outgoing line automatically. Hybrid systems
combine features of both.

Initially, the primary advantage of PBXs was cost savings
on internal phone calls: handling the circuit switching
locally reduced charges for local phone service. As PBXs
gained popularity, they started offering services that were
not available in the operator network, such as hunt groups,
call forwarding, and extension dialing. In the 1960s a
simulated PBX known as Centrex provided similar features
from the central telephone exchange.

Two significant developments during the 1990s led to new
types of PBX systems. One was the massive growth of data
networks and increased public understanding of packet
switching. Companies needed packet switched networks for
data, so using them for telephone calls was tempting, and
the availability of the Internet as a global delivery
system made packet switched communications even more
attractive. These factors led to the development of the
VoIP PBX. (Technically, nothing was being "exchanged" any
more, but the abbreviation PBX was so widely understood
that it remained in use.)

The other trend was the idea of focusing on core
competence. PBX services had always been hard to arrange
for smaller companies, and many companies realized that
handling their own telephony was not their core competence.
These considerations gave rise to the concept of hosted
PBX. In a hosted setup, the PBX is located at and managed
by the telephone service provider, and features and calls
are delivered via the Internet. The customer just signs up
for a service, rather than buying and maintaining expensive
hardware. This essentially removes the branch from the
private premises, moving it to a central location.

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