The Evolution of PBX: A Look Back at Milestones and Innovations

Written By Bicom Systems Team

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A Private Branch Exchange – better known as a PBX – is a system to route internal and external telephone calls. Made up of trunks (phone lines) and endpoints (telephones), the PBX connects callers with whoever they are trying to reach.

Today we grab our cell phones and make calls without giving it a second thought, but it has not always been so simple, easy, or inexpensive. Let’s take a look at the evolution of PBX and how Bicom Systems played a part in the journey.

Any history related to telecommunications must start all the way back in 1876 when Alexander Graham Bell invented the telephone (source). His revolutionary technology sparked the beginning of a century marked by innovation and an ongoing quest to improve communications for individuals and businesses.

Within a few years of the invention of the telephone, manual switchboards emerged with human operators that took calls and routed them by physically plugging the phone cord into the corresponding jack.

While the concept of communicating via telephone was exciting and incredible, the technology had some obvious drawbacks. All communication – even internal calls within a business or organization – had to be routed through the public exchange. This was not only expensive, but cumbersome and even a bit intrusive.

Challenge always begets innovation, even a hundred years ago. Individuals and organizations with a desire to handle communications internally began investing in private switchboards and hiring their own operators.

The very first primal PBX was installed in 1879 at the Old Soldiers’ Home in Dayton, Ohio in the form of a simple switchboard that connected their central line – which was connected to the public exchange – to seven internal extensions (source). Next to follow suit was a group of attorneys in Richmond, Virginia that deployed a private switchboard system in 1882. And the rest is, well, history.

By 1902, the practice of installing private switchboards was commercialized by AT&T with the first standard PBX system on the market for organizations looking to become more efficient and reduce their spending on telephone calls.

While the upfront investment was steep, the promise of long-term savings enticed organizations with higher call flows like hospitals, schools, and large offices. Still, many others continued to rely solely on the public switchboard despite its shortcomings.

After the Great Depression ended, businesses began to grow and the amount of call traffic increased. Routing calls manually was becoming too expensive and impractical, even for organizations that were using a private switchboard internally.

At the same time that the discontent with the existing system grew, a shift from analog to digital technology was sweeping across other industries.

Following the theme of innovation, pioneers in the telecommunications field invented the Private Automatic Branch Exchange (PABX) in the early 1960s.

By automating the traditional PBX, dedicated telephone networks became more efficient and less expensive, opening access to more businesses and organizations.

It was again AT&T that cemented this new trend in the industry by building the first ever Electronically Switched Network, called the No. 1 ESS or “1ESS” in 1965 in New Jersey. Using a computer instead of a human operator to direct calls, this revolutionary step made telephony more cost-effective and time-efficient than ever before. 

At the same, Northern Telecom (Nortel) was busy creating its own electronically-controlled switch, launching the SG-1 PBX or “Pulse” in 1972. By 1979 they had revealed the DMS-100, a digital switch that could support up to 100,000 lines.

So electronic switching powered by computers officially replaced manual switchboards with operators and telephony not only became less expensive, but also began to include new and exciting features like:

  • Voicemail
  • Call forwarding
  • Call waiting
  • Caller ID
  • Conference calling

As technology improved, so did call quality so that communication via telephone became more efficient and less prone to misunderstandings or delays.

As manual routing became obsolete, the term Private Automatic Branch Exchanges (PABX) dropped the “A” to remain Private Branch Exchange (PBX). New features continued to emerge, including data integration and more advanced routing options.

Despite all these positive changes, a desire for better scalability and flexibility arose, and thus began the conversations around packet switching technology and hosting.

Parallel to the ongoing evolution of PBX, Voice over Internet Protocol (VoIP) technology was brewing in other laboratories. The first-ever commercial VoIP solution was born in 1995, created by VocalTec Communications. The VocalTec Internet Phone allowed users to make phone calls via their Internet connection, forever changing the landscape of telephony.

Of course the huge draw of placing calls via the Internet was cost savings, but VoIP technology brought a slew of other advantages and features like softphones, Interactive Voice Response (IVR) menus and routing, and call recording. The market lapped up this new technology and by 2003, 25% of all voice calls were powered by VoIP (source).

VoIP technology was integrated with the traditional PBX to create IP PBX systems that offered new features and channels of communication at a more accessible price. It was an exciting time of innovation and the possibilities seemed endless.

One possibility powered by VoIP technology was the implementation of PBX as software. In 1999, Mark Spencer created Asterisk as an open source PBX software. This would become a framework to invent communications platforms that could be customizable, flexible, and scalable.

This time it was not AT&T that commercialized this new possibility. Though we were told it could not be done, Bicom Systems launched the first ever Open Standards Turnkey IP PBX system on Asterisk in 2004.

PBXware, an all-in-one telephony solution with advanced features and maximum flexibility, set a new standard in the telephony industry. Businesses and organizations of all sizes now had access to an extremely easy-to-use and affordable solution that could handle their communications with little to no effort on their part.

Other communications vendors scrambled to follow suit as the concept of an all-inclusive, commercial PBX product took hold of the market.

With the emergence of Cloud Computing, the PBX landscape was again changed and improved. PBX systems could now be hosted in the Cloud, greatly decreasing costs and labor and increasing the ability to scale. This was great news for businesses with small budgets who could now access a customizable, scalable solution that fit their business needs. Cloud solutions providers take on the burden of maintenance and upgrades, making it a hassle-free solution for busy organizations.

Bicom Systems was quick to adopt Cloud technology, offering PBXware with flexible deployment options. Our Multi-Tenant PBX edition takes full advantage of the Cloud to support unlimited tenants and scalability.

But the innovation of the 21st century did not stop there, with Unified Communications (UC) representing a marriage of advanced functionality and extreme simplicity. PBX telephony is incorporated into the UC solution invisibly, with little thought on the part of the buyer given to the technology powering their communications. More important are the features on the surface, including video and voice calling, instant messaging, presence, and other advanced collaboration tools. 

Bicom Systems introduced gloCOM, our Unified Communications app in 2008.

gloCOM harnesses the full power of Unified Communications as a Solution (UCaaS) in a simple and user-friendly interface. Today, glocOM is available as a desktop and mobile app, plus an advanced Meeting module.

From 1876 to 2024, one thing is clear: The telephony and communications industry is marked by brilliant minds and unbridled innovation. We are proud to form part of this vibrant, forward-thinking community. The evolution of the last 148 years has been incredible, so the age of UCaaS is sure to give way to something new in coming years.

Already we can observe emerging technologies like Omnichannel and Artificial Intelligence that will further automate, enhance, and expand our communications. The most important thing you can do is align yourself with a research-based communications provider that stays abreast of upcoming technology as it emerges.

The Bicom Systems team is constantly researching and developing based on over 20 years of experience and our valued partner feedback. We recently launched our Omnichannel Contact Center solution with the latest technology including chatbot, reporting, and more.

If you are ready to begin your journey into the future of PBX and communications, contact the Bicom Systems team today.