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VOIP Glossary

Below is a list of commonly used terms in VOIP industry.


VoIP is the acronym for Voice over Internet Protocol, a technology also known as IP telephony, voice over IP, internet telephony, broadband telephony and sometimes SIP telephony. This term encompasses the range of technologies used to deliver voice communication over the internet or any compatible network using the Internet protocol suite (TCP/IP). These digital technologies were developed as a replacement for the traditional phone lines network (PSTN).


PSTN stands for: Public switched telephone network. This is the traditional phone network everyone is familiar with and is circuit based. The world circuit-switched telephone networks (local, regional, national and international) are meshed together and form the PSTN. This network was initially built upon analog technologies and most last-mile connections (from the telecommunication provider to your office) are still using this technology. This is the same technology used for the old telephone jack most of us still have in our homes. While the core of the PSTN was slowly upgraded to make use of digital technology, the birth of the internet disrupted that process and it quickly became apparent that the internet could be used to fill the role of the PSTN while offering many other applications, making it a very competitive alternative to the PSTN.


PMBX or Private Manual Branch Exchange systems were PBX’s that required an operator to manually patch the calls in a switchboard. It goes without saying that these systems are not in use anymore, but you may come across the term here and there.


PABX or Private Automatic Branch Exchange systems were automated PBX’s in the sense that they didn’t require an operator to switch calls and they were an evolution of the PMBX. Now all PBX systems are automatic, so the term PABX fell out of use and was replaced by the term PBX.


PBX (Private Branch Exchange) is a private switching system that connects phone extensions to the PSTN (traditional phone network). Basically, it’s a phone system. In the early days, such systems resided within a business and sometimes required an operator to manually switch the call (PMBX). Automatic systems were later developed and were known under the acronym PABX. Both the abbreviation PABX and PMBX fell out of use since all systems are now automated so the industry settled on using the PBX abbreviation instead.


IP PBX is a PBX that makes use of the internet protocol to control the switching process (see PBX definition).


HOSTED PBX or VIRTUAL PBX is a PBX that doesn’t reside within a business premise. The PBX system is hosted by a provider and is located on the provider’s premises. There are 2 types of hosted PBX: IP PBX and CENTREX systems. Centrex systems are hosted PBX systems that use traditional phone lines. They have fallen out of favor with the rise of the internet and the IP PBX.


A HOSTED IP PBX is a PBX that makes use of the internet protocol (IP) to control the switching process (see PBX definition) but this PBX is not installed on the premises of the business that’s using it. Instead, this IP PBX is “hosted” by a provider which means it’s installed on their premises (datacenter).


TCP/IP or Transmission Control Protocol/Internet Protocol refers to a suite of protocols that sets rules on how data can be exchanged on public (internet) or private networks (intranet). TCP, as the name suggests, controls the transmission of data by defining how applications can create channels of communication over networks. It’s also in charge of specifying how the data will be “packaged” (aka broken down) in smaller pieces known as packets before transmission over the network. IP specifies how these packets are addressed and routed, making sure they reach their destination etc.


SIP (Session Initiation Protocol) is a signaling protocol used by IP PBX to initiate, maintain, modify or even terminate real-time voice sessions.


A server is a computer that provides services and resources to other computers. Basically, it’s a computer connected to a network and other computers can access it and use the service or resources provided by the server. A server will usually be installed in a rack, either in a data center or within a business.

Data Center

A data center is a facility where space can be rented to install servers. A server installed in a data center is said to be “hosted” by that data center. Data centers provide multiple benefits. They are usually very secure, and extremely resilient to power and network outages. They are also aggressively cooled and have multiple connections to the internet backbone to ensure ongoing connectivity of the servers. Only extremely large enterprises can replicate this kind of environment within their business, and even then, it will be virtually impossible for a business to recreate the rich interconnections present in a data center.

Understanding VoIP phone system

To understand what a VOIP phone system (PBX) is it's important to understand the various technical terms related to the phone system and the various technologies involved. We created a detailed article about VOIP that targets business owners who want to better understand this technology.
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