PBX is an abbreviation of the term Private Branch Exchange. A private branch exchange or PBX is a network or private phone system which can be used by members of an organization to communicate in-house. PBX users also share a number of outside lines which allow them to make calls outside the company. Companies use it because it saves a significant amount of money on phone calls within the company. It also saves time. When calling in-house you only dial 3 or 4 digits. PBXs are sometimes referred to as electronic private branch exchange (EPBAX), computerized branch exchange (CBX) or private automatic branch exchange (PABX.)
Aside from telephones, PBXs can be used in conjunction with fax machines, modems and many other business machines. One of the features of PBXs which is of great value to businesses is the ability to automatically select an outgoing line with no human intervention. They are packet switched networks so they can handle a great deal of data. Some smaller companies opt for a hosted PBX because there is no need to purchase expensive hardware. This saves money and manpower. The calls are managed offsite and delivered via the internet.
Initially the term PBX had meant switchboard operators running switchboards by hand. Today the acronym is used to designate any type of complex, in-house phone switching systems. A standard in-house PBX usually requires an internal switching network, a Microcontroller, specialized cards, telephones sets, outside Telco trunks, a console, interconnecting wiring, and an uninterrupted power supply.