Replacing Legacy Telephony

office-handsetI remember sitting in on an industry panel somewhere in the mid-2000s and hearing a discussion about how VoIP was going to sweep the business world and that the PBX would be obsolete within just a few years. I took this with a grain of salt since those on the panel were mostly VoIP vendors or sellers. But still, the general consensus in the industry was that the new would quickly replace the old.

And yet here we are more than ten years later and there are still thriving PBX providers serving businesses. I have a client who sells PBXs and resells PRIs to serve them who has been steadily growing his business every year for the last decade. He still made a significant number of new PRI sales in 2016, many of them for two and three year contracts going forward.

There are several reasons that the PBX industry is still going so strong. The first is that a few years after I saw that panel, SIP came along as a big improvement to PBXs. SIP allows PBXs to mimic some of the best features of VoIP and reduced the sharp contrast between the old and the new technologies. SIP meant there was no longer a huge contrast between old PBX phones and phones with newer features.

But SIP alone doesn’t account for the continuing popularity of PBXs for businesses. As I mentioned earlier, there is still a thriving PBX industry that uses traditional PRIs and not SIP trunks and which still support that same old telephones that businesses have been using for decades.

There are a number of reasons why PBXs are still being used by businesses. Probably first among these is captured by the old adage, “if it ain’t broke, don’t fix it”. Offices full of information workers have probably upgraded phones during the last decade. But a lot of businesses operate in a different environment. There is no particular urgency to change a phone system that’s operating in a warehouse or a lumber yard or a milking barn. As long as such phones work well, the easiest path for the business operator is to keep renewing the phone systems and to not make a change.

I remember back when CCG still operated several offices that we were always being bombarded by vendors to upgrade our key systems. But it’s easy in a business office to defer such upgrades because they are disruptive and time consuming. My employees universally told me that they didn’t want to learn a new phone system – and so we never made an upgrade.

It seems like a lot of businesses also don’t want to make the capital spending decision to change technologies. Tearing out a PBX and installing new phones can mean a big one-time fee. Even if this is financed over time, businesses seem to put off making that decision until their old system stops meeting their needs.

And while most businesses still have office phones, you can’t discount the influence of cellphones on the workplace. It is a daily occurrence for me to be talking to somebody who is on a cellphone while they are sitting at their desk next to their office phone. Businesses are often not ready to get rid of office phones, but a lot of their business is handled with cellphones. This is only going to be bolstered by the widespread introduction of HD voice where the quality of cellphone calls promises to meet or exceed the quality of landline calls. Perhaps the real transition we will see in a few years will be businesses finally walking away from office phones altogether.

This all has a material impact upon those who sell phone service to businesses. I know a number of ISPs, for example, that only offer VoIP and they are often flummoxed by the number of businesses that are not interested in what they have to sell.

A lot of ISPs don’t want to hear the market’s message – that a lot of businesses are still happy with legacy voice products. My clients that do the best in sales of voice to businesses still operate their own voice switches and offer a variety of products to businesses including IP Centrex, PRIs, SIP trunks and traditional POTs lines. A seller who offers both the old and the new technologies is always offering something that people want to buy. I think a lot of us get wrapped up in the idea that newer is always better and it often takes customers to tell us that isn’t always true.

Advantages to Customers of SIP Trunking

SIP stands for Session Initiation Protocol and is a technology at the enterprise level for delivering multiple voice connections to a PBX or key system over an IP data connection. In order for a business to utilize SIP they must have a PBX with a SIP-enabled trunk side and their data provider must be able to deploy and switch SIP.

Hot Desk, GTi, University of Glamorgan

Hot Desk, GTi, University of Glamorgan (Photo credit: jisc_infonet)

SIP Trunks at the enterprise level of the network replace PRIs between the central office and PBXs. A PRI is a dedicated T-1 transport circuit and can support 23 bearer paths for voice, but a SIP trunk connection typically rides an existing data circuit and can be used to carve out as many voice paths as are wanted within the limits of the bandwidth available.

Following are the reasons that businesses want SIP trunks, and thus for carriers to sell them. This list is discusses the advantages for the small and medium business customer.

Saves Money. SIP generally saves money. SIP trunks replace PRIs which are inefficient. It is not unusual for a customer with a PRI to be using only part of the capacity and yet they have to pay for it all since it is a linear product. SIP trunks are typically carved out of a company’s data or Internet connection and can be sized as needed within the constraints of the bandwidth. It is typical for a business to cut their costs at least in half using SIP trunks compared to PRIs due to the efficiency.

More Efficient Use of the Data Connection. Most businesses will already have an Internet connection and SIP trunks are carved from those connections. Most businesses use their data connections in a bursty fashion, meaning there are times of the day when they use a lot of their bandwidth, but also many times when they use very little. SIP trunking can take advantage of the unused capacity in most company data connections. Companies often do not need to increase the bandwidth they are buy SIP trunks and can fit them into their existing data product.

Enables Unified Communication. SIP enables all of the various features that comprise unified communications such as access to the phone system from cell phones or tablets, integrated voicemail and email, video chat, instant messaging and other features that make businesses more productive.

Enables Upgrade to an IP PBX. Businesses more and more want the kinds of features that are available with an IP PBX and IP handsets. Many businesses are choosing to buy an IP PBX to get these features rather than buy IP Centrex from their telco provider. The general advantage for a business to have their own IP PBX is the ability to customize their communications network, something that many service providers do not offer with IP Centrex.

Allows Multiple Locations to Act like One. With SIP trunks and an IP PBX a business with more than one location can have a unified telephone system that brings the data and voice together for all locations.

Any carrier that sells enterprise data service to businesses should offer SIP trunks. Even if you sell IP Centrex, customers who prefer to have their own phone system are going to want SIP trunks.