Does the corporate PBX have a future?

With most businesses using a private branch exchange for their telephony traffic, we summarise the state of the market and look...

With most businesses using a private branch exchange for their telephony traffic, we summarise the state of the market and look ahead to future technology developments. A private branch exchange (PBX) is an internal corporate network system that connects a firm's phones, faxes and other communication tools to the service provider's...

external public exchange, where the voice and data calls are routed to the final destination. Before PBXs came along, every time a staff member wanted to make a call, they would have to go through a phone company operator first. The first PBXs very much relied on proprietary systems, which made it harder for companies to modify them with additional features. While some variations still remain in the way different PBXs work, it is now much easier to modify them to to deliver additional call features. However, the future of the traditional PBX is now under question. This is primarily because of the growth of the internet, and the resulting possibility to streamline the way voice and data can be exported out of the enterprise into the public network for its final destination using voice over IP technology. Technology issues There are two main types of PBX: a hardware-based PBX equipped with the necessary software or a software PBX which routes calls out of the organisation over a platform such as Windows 2000. Hardware-based PBXs make up more than 90% of the existing installed user base. The main reason for this is that a hardware PBX offers a more secure continuity of service compared to PBXs built on software alone. For instance, when backed up with a decent battery system, a power outage will not knock out the corporate phone system. However, if a software PBX running through desktop PCs is faced with a similar problem, or if the servers go down, your staff could be left without a phone system, depending on how the solution is configured. Business issues The main aim for anyone choosing a PBX system is to make sure that it can be configured with all the latest call cost-saving measures, and be able to work with emerging internet technologies designed to lower call costs. Any PBX system has to allow for the ability of the enterprise to take advantage of carrier pre-selection - a technique that allows corporates to set up their connections with the public exchange such that different telecoms suppliers can be used for different types of calls. For example, a firm should be able to automatically choose BT for its local calls and Cable & Wireless for its national calls, or an additional company for its international calls. This can be achieved without staff having to dial extra digits in front of the calls they want to make. And it should be able to do this without having to make any major hardware and software upgrades. The PBX should also be able to take advantage of technologies such as VoIP, with companies being able to make some or even all their voice calls over the internet. Long-distance calls made this way are charged at a local rate. Because the internet is seen as less stable than the traditional telephone system, many firms are choosing to test VoIP in parallel with their existing reliable, but more expensive hardware PBX. Management issues The PBX market is currently at a crossroads. Among the ongoing issues is whether it is better to buy dedicated hardware or buy a product that is closer to software designed to run on commodity hardware. For the SME, another issue is whether to put in place a system based on local area network telephony. When choosing a PBX, businesses need to consider the following points:

  • The number of phones in the organisation and usage
  • How many sites need to be connected and the amount of traffic between them
  • The location of the main system and its interconnections to other systems
  • Which dial plans and level of resilience best suit your requirements
  • When the peak periods are for network traffic.

Businesses looking to implementing VoIP for inter-office communications should also ensure their network technology is up to the job. This means having:

  • At least 10/100 megabit Ethernet Lan switches
  • Lan switches that interact with and interpret quality of service features with routers
  • Category 5-compliant cabling infrastructure to support 100 megabit data rates and, where applicable, in-line power supply for IP phones.

Other networking issues to bear in mind are:

  • Since the bandwidth in the Lan is often wider than in the wide area network, you will need to plan the network accordingly with correct "headroom"
  • Ensure that the router and switch networks have enough IP addresses available to support IP phones and that the routers support voice compression
  • Put in place adequate resilience measures. Businesses should use a standby power system to maintain a phone network if there is a mains failure - traditional phones use a central standby power source.


BT, as the incumbent UK phone operator, still installs most PBXs, manufactured by a variety of suppliers. BT also installs VoIP systems.

In the past couple of years Nortel has had a rethink about the way it approaches the PBX market, acknowledging that the difference between carrier-class solutions and those necessary for the enterprise are increasingly becoming narrower.

Cisco has gained BT's support for its new software PBX range.

3Com is offering products that fit between traditional hardware PBX and a software PBX. It has launched NBX (Network Branch Exchange), which is powered by a firm's Lan. This is why this solution for SMEs is called Lan telephony.

Companies such as Mitel and Ascom are among many suppliers that can help SMEs to get the most out of technologies and applications such as VoIP and e-commerce. Although the emphasis of VoIP has generally been on low call costs, the technology can also be deployed to give users greater functionality. For example, VoIP users can dial from a desktop screen using highlighted numbers, instead of using a phone to individually key in all the digits for the number wanted.


  • When choosing a PBX make sure the system is scalable and can be modified to adapt to future technology changes, particularly if VoIP takes off
  • While convergence of voice and data networks may be the future, be aware that there are currently shortcomings such as sound quality degradation compared to a traditional phone line
  • Reliability of the phone network is paramount and businesses should use a standby power system to maintain a phone network if there is a mains failure. Traditional phones use a central standby power source but on VoIP networks, IT managers will need to ensure the network is resilient.

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