Voice conversations are relayed either as analog or as digital signals. VolP technology makes it possible to encode voice into data packets which are then broken down into smaller units and transmitted electronically. Functional difference is the best place to begin VoIP gateway vs. IP PBX comparison. In an IP PBX system, the conversation of the voice packets into data packets happens at
the source. That explains why IP PBX is often referred to as a native IP device. The converted packets are typically sent as native IP packets and then reassembled once received on the other end. The older PBX systems which do not have IP addresses assume that the digital transmissions will happen independently or over the POTS (Plain Old Telephone Service). On the other hand, any IP PBX has the ability of translating data packets for the POTS infrastructure whenever needed, as is the case in analog faxes. Another functional difference in VoIP gateway vs. IP PBX is how voice is broken down for transmission. A typical VolP gateway works by breaking down the voice and then stuffs the smaller segments into IP packets at the network node. These broken down pieces are then transmitted over the IP network. The main difference in these technologies is that the analog voice network assumes it will transmit the packets over the POTS on the network. Meanwhile, the gateway breaks down the message into digital packets ready for transmission on VolP. The biggest pro for a company using a VoIP gateway vs. IP PBX is that the company can either have an easy upgrade path to VolP or even have multiplicity of devices and use the gateway as a kind of translator. Undertaking a complete PBX upgrade can be an expensive affair especially if cabling has to be done as part of the upgrade. For instance, there are some VolP phones that will need at least two cables. A good example of such phones is the power over Ethernet phones. You could still improvise with a switch based phone but if all the data connections on a workstation are engaged and you do not have the old voice connection, you may want to upgrade to the new standards of a four pair cabling system.