Many businesses and people in the U.S. are in need of a fast internet connection from one place to another.  With VOIP connections, you can communicate with speed and efficiency.  Voice and its systems and networks came first and "data" was carried by and handled by what was once a voice-only circuit-switched infrastructure. With the movement to VoIP and voice convergence, not to mention the expanded role of IT in a business of any size, that has changed.  Also remember that the Small Medium Enterprise or Small Medium Business is viewed as the next exciting area of opportunity in the growth of Voice over Internet Protocol or IP Telephony. The scope of a system can range from a handful of telephones to dozens of voice and other terminals and from a single business location to multiple networked sites across the country.

Since as long as telephones have been around, businesses of all sizes-small, medium, and large-have used them. The pre-VoIP business of today can use a premises-based telephone system for their business locations, or can use network-based solution from a variety of service providers including telephone companies and other entities. The hosted offering could be as basic as a few business telephone lines from the provider, or it could be PBX-like capabilities delivered via the provider's equipment and network to the business.

The PBX was originally on the business site or premises-based, but in recent years more and more viable network-based or hosted alternatives have been developed as we will see in Part 2. The origins of the Private Branch Exchange (PBX) were in the early part of the 20th century when telephone switchboards first started to be automated. PBX technology has typically been a downsized version of telephone central office switches and associated equipment scaled for the enterprise or organization. Remember that it connects company or other service provider lines to the organization's users, and allows an organization to have fewer outside lines than extensions because statistically not all extensions will be in use at once.

Without a PBX, an enterprise will need one line for every employee with a telephone, with a PBX system, the company only needs to have as many lines as the maximum number of employees that could be realistically making outside calls at one time. Every telephone is connected to the PBX. When an employee takes the receiver off hook and dials the code for external calls the PBX connects the user to an outside line. Also, the PBX performs other switching functions, connecting outside callers with inside extension lines and extensions with each other as needed.   

The initial core functions of a PBX were to route and handle calls and to share common facilities such as central office trunks and access to specialized subsystems. Over time, many functions and features have been added. The list below is just a sampling of the magnitude of capabilities in and around today's PBX. In terms of older definitions, Centrex is a PBX-like service offered by the telephone companies and other carriers in which the switching equipment is located at the service provider's site, not the customer premises.