The majority of the installed base remains TDM endpoints, but that is expected to change within a few years when installed IP line stations are forecast to eclipse traditional endpoints sometime during 2009. Virtually all PBX systems shipped last year were capable of supporting IP communications capabilities, but not every customer installed IP-based stations and/or trunk circuit interfaces.
Converged (TDM/IP hybrid) and client/server softswitch design platforms were most favored by customers, each one representing about 45% of total line station shipments. IP-enabled designs (, i.e., systems originally based on traditional digital circuit switching standards, but with interim upgrades capable of supporting IP endpoints and/or distributed common equipment cabinets/shelves) represented only 10% of the market, and will continue to decline as a new system installation.
IP telephony demand among KTS/Hybrid customers was not as strong. About 20% (1 million) of KTS/Hybrid shipments were estimated to be IP-based line stations. Compared to larger line size customers, far fewer small system customers, especially those with less than 20 line station requirements, perceive benefits from an IP telephony system.
Another reason for lagging IP endpoint shipments in this market segment is that many small system customers lack the IT infrastructure and/or support personnel required for implementing and operating an IP telephony system design. Demand for IP endpoints will continue to grow in this market segment, but traditional endpoints will dominate the installed base for many more years.
Ongoing Technology Trends
Any experienced telecommunications industry follower knows that technology change is adopted very slowly in telecom compared to other IT market segments. IP telephony is now entering its second decade, but more than half of the PBX line station installed base is still built on fading TDM/PCM technology. IP line stations should hit the 50% level sometime next year for PBXs (as mentioned earlier), but maybe not before 2015 for KTS/Hybrids.
It is now several years after a number of significant IP telephony system design innovations were introduced, such as geographically distributed redundant call servers and survivable remote gateways, but customer implementation is not yet universal. SIP telephones have been available for several years and can be provisioned behind most IP telephony systems, but the number of SIP line stations is in the low single digits as a percent of the total installed base. Shipments of 802.11-type wireless stations and softphone clients are also hovering in the low single digits as a percent of total annual shipments, despite the many articles and presentations extolling their benefits to station users.
None of this should be news to the telecommunications professional who recalls that integrated (unified) messaging systems were first introduced to the market in 1991, because the majority of PBX system installations have yet to implement the option.
Currently, four major IP communications technology issues demand the attention of system suppliers and customers, alike. They are:
- An accelerating shift of R&D resources from hardware to software with increased use of third party hardware components (servers, media gateways, voice terminals)
- Increasing enterprise communications system compliance with open industry standards, including: Linux O/S; SIP; SOA-compliant Web services (XML, VXML, SOAP, et al); ENUM; and security standards like TLS and SRTP
- Increased levels of system design redundancy and resiliency to optimize services availability in case of system or network problems
- Slow, but inevitable, shift toward mobile communications devices as the primary knowledge worker (executive and management levels) interface to the enterprise communications system
As high as 90% of current R&D expenditures for PBX systems, including peripheral application options, are focused on software. The shift from hardware to software has been a long-term trend that began at the dawn of the digital PBX era more than 30 years ago.
Many current generation IP telephony systems can be configured with a manufacturer-approved third party server for common control operations, and almost all systems will work with third party media gateways for analog line station, analog PSTN trunk circuit, and/or T1-based digital trunk interface requirements. This hardware trend has contributed to declining system prices, and gives customers more choices on how their system is configured.
There were very few Industry standards governing the design and architecture of digital PBXs, but that is dramatically changing as the IP telephony era progresses. Specifics about IP telephony systems and industry standards can be found in this writer’s article “Standards and IP Telephony Design,” BCR September 2007. Linux has virtually become the default operating system of choice for IP telephony systems and SIP (Session Initiation Protocol) specifications have been adopted by system designers to varying degrees for their product offerings.
Much has been written about SIP, and this article does not need to rehash the material, but it must be noted that customers have not yet installed SIP station equipment nor deployed SIP trunk services anywhere near a level commensurate with industry hype about the communications protocol. The forecast for SIP telephone instruments may be strong, but significant shipments are not likely to materialize until a few more years. Only a small percent of currently shipped IP telephony systems, such as Siemens’ HiPath 8000, use SIP as the primary communications protocol; H.323, SCCP, or a proprietary communications protocol still dominate.
