Telephony 101: Private Branch Exchange (PBX)

You may have heard this phrase a number of times in your life, “PBX”, the “PBX number”, “our PBX” something along those lines.

It’s called a Private Branch Exchange. A PBX has been mostly in the last ten years coined by Information Technology professionals who don’t even use phones often to define it as a “premise based” or “a phone system inside a business”. This is a blatant over-simplification and re-writing history which is very common in the IT industry.

PBX systems were initially just an exchange located in a customer’s site where the need of a phone system was needed. In, fact it functioned just like a switchboard of the late 1800s to mid 20th Century.

This was actually the PBX to The Balsams Resort up in Northern New Hampshire up till 1980. Fun fact, an hour south, at the Mount Washington Hotel was the actual first install of a PBX in a hotel!


The PBX systems that mimicked the automatic switching, crossbar and later Step By Step would later follow. Albeit it was still very primitive, no fancy features, just equivalent to the consumers with the plain ol telephone service. The reason for acquiring a PBX was to wire large number of telephones without being directly connected to the telephone company, and therefore have high costs of having a hard wired line to each desk or wall or what have you.

By the 1970s, the rise of the semiconductors and the transistor brought on a new world of technology using computers, and a new concept of software to make phone systems more automated. This allowed customers to do more than call another user, using intercoms or buzz sidecars, and enable customers to not needing an operator to process calls outside, of which brought the concept of “nine for the outside line”.

The ROLM Corporation introduced an electronic PBX called the CBX or the Computerized Branch Exchange in the mid 1970s, Northern Telecom (later Nortel) introduced the SL-1 in 1975 and AT&T’s analog but electronic PBX, the Horizon and Dimension in 1974.

Since the mid 1970s, the concept of PBX systems was to

  • Enable the idea of trunk groups, and grouping various hard landlines, and enabling call routing features; that would detect the number dialed, and route it to the appropriate line so the customer didn’t get charged too much for a local number or if the number shared the same area code, but was outside the local call area, it would route to another trunk that was long distance, but not say an out of state LD trunk.
  • Scaleability, the ability to feed in boatloads of trunks for say call centers, or be a headquarters office with boatloads of phones and route calls to select trunks
  • Continued lower cost by using electronic parts as opposed to moving components or fuses, or other parts

In the 1980s, the advent of digital telephony further accelerated with more features to users and customers, including calling line ID (or Caller ID), Enhanced 9-1-1 (Where Available), and Intergrated Services Digital Networking. This enabled customers for the following

  • Link remote PBX systems together and potentially have a central trunk group, and the phone systems would talk via a proprietary implementation of ISDN or an open ISDN line for that matter
  • Link mainframes and PBX systems together to enable customer information, the early concept of pop up information was derived from the 1980s innovation of PBX systems
  • The rise of modern voicemail that could later be “unified” into email servers, etc.
  • Interlinking other vendor’s PBX systems via open ISDN lines or protocols

While PBX systems would later catch on to larger install bases to replace Centrex, the growth of electronic phone systems took on for enterprises from the late 1970s into the 1990s with implementation and upgrades to the systems. Or replacing them with another vendor’s system.

PBX systems, with their heavy duty nature of answering and processing calls also got smaller. You could get a heavy duty PBX system in the 1990s for the size of a Key system, if not a bit larger, but obviously more expensive than a Key system. While many models did retain the mainframe form factor, many ran on RISC based chipsets like Motorola’s 68,000 or PowerPC, while some used Intel’s x86 CPU chipsets.

In the 2000s, major changes occurred in the hardware nature. The growing acceptance of Voice Over IP as well as standardized hardware specifications by Intel and the major PC vendors pushed the makers of large grade PBX systems to move from a mainframe to a server. For some vendors, a modern PBX could live completely on software on a 1U rack supporting 20,000 users. Cisco on the other hand has to live on “clusters” and to meet the same number requires multiple racks to do so. Another change was converting these refrigerator sized “carriers” or “cabinets” or “shelves” to “gateways” similar to a network router. Depending on the use and the wiring and phone setups, it could range from a 1U to 4U racks. Fed via Ethernet, it could route back to the server via an IP based network. The server could be on site or be remote, or be driven to “the cloud”, better known as Software as a Service (SAAS).

Another new development occurred, was the development of open source software. Mark Spencer, a former employee of Adtran wanted to start up his own CPE/network equipment company. When he realized a PBX was going to cost over $20,000 (in reality a true PBX at that time cost over a million US dollars) he decided to make his own on top of Linux called Asterisk.

Asterisk was branded by the “community” as “an open source PBX” and many offsprings have used “PBX” by name despite an average PC in the 2000s could only hold up to 20 to under 100 users concurrently. The Asterisk had similar features to what the phone company provides and didn’t provide modern day end user features that have been found on Nortel, Avaya, Alcatel or even Cisco’s offerings. This was almost a regressive move to what was used back before the 1970s.

However Asterisk is used all over the world, whether it’s on site or “the cloud” and it’s software heavy platform makes it infinite-like nature. It could theoretically handle tens of thousands IF your hardware can support it and what other things could be running. Typical IT-like answers to something that people have anticipated definitive answers to specific solutions.

Another oxymoron is the marketing of “cloud” and “hosted PBX” systems that completely condidricts  the initials it originally meant.



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