Time to Reap What IP Telephony has Sown

IP telephony made its way into the small and medium business mainstream a few years ago, yet only during the past 12 months have companies started to use this communications foundation to improve productivity.Increasingly, companies are dumping their traditional telephony based PBXs for IP based voice systems. Market research firm Infonetics found that revenue from PBX sales fell by 20% in 2007. Despite that significant drop, the overall enterprise telephony market grew by six percent, reaching $9.6 billion worldwide.

Infonetics said that most of the IP PBX purchases in recent years have been made simply to save money. If a company can funnel its voice and data transmissions onto a single communications line, then it has to purchase less bandwidth than if they run separately. Such savings have been so significant that small and medium businesses have realized paybacks in 18 months  or sometimes even less  from their IP PBX purchases. Now, companies are buying devices to take advantage of these systems communications capabilities, for example, shipments of softphones went up 55% to 385,000 in 2007. With such devices, small and medium sized companies can install new applications, such as Find Me, Follow Me, which bounce from device to device (cell phone, computer, IP phone) to track users down, so they do not miss important calls.

Another change in 2007 is the emergence of Cisco, the industrys dominant network equipment supplier: the companys market share jumped from fifth to second. Cisco is the only data networking vendor among the top five suppliers, and its momentum could damage traditional telephony vendors, such as Avaya, Nortel, Siemens, and Alcatel-Lucent. With companies turning to more data oriented applications, these suppliers may have difficulty maintaining their historical dominance in voice communications. In addition, network equipment vendors, such as 3Com, find their positions in the IP PBX market slipping away as Cisco gains traction. The move to these new systems promises to help small and medium businesses operate more effectively. While that is good news for them, vendors face difficult challenges as the market continues to evolve.

How much interest does your company have in IP PBXs? What do you view as their key functions? How much interest do you have in next generation IP PBX applications?