I have always been fascinated by the PABX - the private automatic branch exchange, often shortened to "PBX" in today's world where the "automatic" is implied. (Relatively) modern small and medium business PABXs of the type I like to collect are largely solid-state devices that mount on the wall. Picture a cabinet that's maybe two feet wide, a foot and half tall, and five inches deep. That's a pretty accurate depiction of my Comdial hybrid key/PABX system, recovered from the offices of a bankrupt publisher of Christian home schooling materials.
These types of PABX, now often associated with Panasonic on the small end, are affordable and don't require much maintenance or space. They have their limitations, though, particularly in terms of extension count. Besides, the fact that these compact PABX are available at all is the result of decades of development in electronics.
Not that long ago, PABX were far more complex. Early PBX systems were manual, and hotels were a common example of a business that would have a telephone operator on staff. The first PABX were based on the same basic technology as their contemporary phone switches, using step-by-step switches or even crossbar mechanisms. They no longer required an operator to connect every call, but were still mostly designed with the assumption that an attendant would handle some situations. Moreover, these early PABX were large, expensive, and required regular maintenance. They were often leased from the telephone company, and the rates weren't cheap.