A private branch exchange or PBX is a telephone exchange that operates within a private business whereas the public telephone company serves the general public in addition to several businesses. The benefit is that fax machines, modems and a series of telephones can be operated under on public telephone line but have several different lines than are operated by the PBX system.

PBX systems took the place of switchboard operators that once operated switchboards by hand, transferring calls manually. When the PBX system was first developed it was referred to as an electronic private automatic branch exchange (EPABX). An escape code was set up that would get the user to an outside line then they could dial the complete number that they wished to call.

PBX was once used only for large corporations that could carry the huge expense of setting up microcomputers for data processing, control and logic, devices that could hold the PBX operation, outside Telco trunks that delivered the signals UPS and interconnecting wiring. All of this equipment had to be housed in a separate area away from where work was being performed. The PBX system has advanced to the stage of being used widely by both large and small businesses today by using a VoIP ran PBX or also called an IP-PBX or IPBX.

Software is now used to give a company or business home phone the capabilities of downloading PBX onto your existing service by way of the Internet. An account number first needs to be set up for billing purposes. A Call Detail Recording (CDR) is then written for each call that is made or that comes in with information regarding call length, number dialed and even the recorded conversation. There are several different functions that are contained in the software and available when you need.

The alternate Number Ring gives a different ring to different extension numbers so you always know which extension has been dialed. A PBX Auto Attendant lets the caller dial into the main number then dials a specific extension for their party. You can also set your PBX to announce the name and extension number of everyone within the company by spelling your parties first or last name. If you have several employees in your company with the first name of "John", you may select to have employees reached by using the last name.

More sophisticated software may offer PBX Call Trace where you can actually trace a call, much like reverse phone lookup in order make a certain number and find out exactly who the party is placing the call. The Camp On line is becoming popular with busy offices that receive many phone calls. In a sense this is like call waiting only the call gets stacked on an extension and as soon as the recipient hangs up from one call, the phone rings with the next stacked call in line. The PBX Follow Me feature is great for employees on the move. If you are going to be working at another location within your company, your extension can follow you to a different work area.

Database Systems or DSC is a company that has the ability to transfer your calls offsite such as to an answering service after hours or to your home phone in case of an emergency. This database management software was first developed in 1987 and has advanced significantly since then. They also created their own computer phone systems called the PACER and WIZARD series still widely used by Microsoft today.

Many companies are now able to extend their PBX functions to reach remote areas or even an employee's home where the work is done without DSC. This is done with a VoIP-based connection to the corporate PBX and can include voice mail, access to calling discount plans and transparent call transfers. Depending on the system, one could even use reverse phone lookup to monitor their calls.

Most software companies that offer VoIP PBX systems are able to guarantee voice-call quality by monitoring conditions on IP connections and taking immediate action of there is a problem. Many companies now have their own IT department that take over this role to keep calls and the Internet operating smoothly. Of course there is always the threat of an electrical outage but most large companies have a backup generator to restore power so as not to shut down their operations.

In 2009, one company announced an award-winning IP telephony solution for businesses on the go with UC mobility that is able to connect all people within an entire organization through mobile application. With this application, people on the move can see the status and availability of other workers, use the corporate directory and PBX access and monitor calls through the PBX call trace that acts as reverse phone lookup for monitoring or storing call back numbers. Calls routed to a cell phone can also be picked up free of charge because they are linked to the main PBX system at the corporate office.

Today thousands of companies utilize telephone systems that are VoIP PBX integrated making running a business much more cost effective and efficient. A compact single server all-in-one design also eliminates the need for a room full of equipment that has to be maintained. Hundreds of functions can be programmed depending on your need and the reverse phone lookup, follow me and cost free solutions to cell phones will have many more thousands of companies using this type of technology soon.