PBX means “Private Branch Exchange.” PBX systems have an in-house network (extensions for in-house dialing) and external connectors (outside lines to receive and make calls outside the private network). Older PBX systems were entirely analog or digital. Most PBX systems are labeled On-Premise because the equipment is in your office, similar to a private server.
Today’s PBX systems have additions to them: IP, or “internet protocol,” allows these premise-based phone systems to operate over the internet (making it a type of VoIP, or voice-over-internet-protocol). On-Premise VoIP PBX phones connect to the system brain over a Local Area Network (LAN). You will need phone lines called SIP trunks to join your private phone network to the outside world.