Difference Between PBX and IP PBX

The invention of telephone is most certainly one of the most significant inventions the world has ever seen. It completely altered the way communication was perceived and done. It has not only helped the domestic users but also allows businesses to reduce the amount of time needed to communicate. As the cliché goes, “in business, time is money.”

Since the cost of calling has been high traditionally, large organisations that need to keep in touch with various branches came out with their own telephone exchanges which significantly reduced the cost of communication within the company. The system is known as the PBX or Private Branch Exchange. Nowadays, IP PBX or Internet Protocol PBX are also quite common and are being preferred in the market.

The two certainly have some similarities but also have some differences as well.

PBX is mostly run with the help of hardware whereas the IP PBX is run mainly with the help of software. The PBX is a traditional system whereas the IP PBX is the upgraded version as it uses VoIP to run the system.

PBX is made for a specific number of slots which can be used and therefore, there is not a lot of flexibility in the system. On the other hand, more slots can be added in the IP PBX at any point of time allowing more flexibility.

PBX can only handle phone calls whereas the IP PBX can both handle phone calls and data.

Since IP PBX is the newer technology that offers more options than somewhat older PBX technology, it is quickly becoming the technology of choice amongst the organisations that are installing these systems.


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    The primary purpose of the Private Business Exchange is to mainly allow communication within the organisation. Outside communication is also possible with the help of trunk lines. The cost per call that is made within the organisation is much less and helps in significantly reducing the phone cost in the longer run.

    Image Courtesy: inetsouth.com

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    IP PBX

    The Internet Protocol Private Branch Exchange has taken private exchanges to a new level. They allow companies to have as many phones connected to the system as they like. The use of VoIP makes the cost of calling much lesser than traditional solutions.

    It is also noteworthy that both calls as well as data can be sent through the IP PBX.

    Image Courtesy: oathsystems.net

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