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Large Enterprises: Fastest-Growing Hosted PBX Market

Until recently, large enterprises with more than 1,000 employees bought a lot of IP PBXs for their employees' communications. But times changed. In a 2017 Eastern Management Group survey of these enterprises, just 60% purchased an IP PBX for their most recent switch. By 2022 less than half of these enterprises will use an IP PBX for most company communications.


The IP PBX fallout was worse as we examined businesses with more than 20,000 employees. Just 55% acquired an IP PBX for their most recent PBX acquisition. And by 2022 these largest of the large enterprises will use an IP PBX for most company communications in only 30% of the use cases. That's a whopping 45% drop for IP PBX over the next five years.

Eastern Management Group research analysts recently completed a four-year study of the hosted market and published the research in a new report, "Worldwide Hosted PBX Market 2017-2022." With data from more than 3,500 IT managers studied worldwide, we are presenting some of our enterprise hosted PBX research in this post, the sixth in an ongoing series.

Hosted and Hybrid Pick Up the Slack
Enterprises are the fastest-growing hosted PBX market. Companies with more than 1,000 employees will double their market share of hosted systems by 2022. And they will almost triple their purchases of hybrid cloud systems. This growth will likely continue for years to come.

Most enterprises have yet to install hosted PBX for many reasons. Some IT managers don't want the loss of control they see as a consequence of embracing cloud. Others have yet to use cloud computing, which may be a steppingstone to cloud PBX applications. We heard from many IT managers who recently brought on hosted PBX after a successful experience with cloud computing. To them, getting cloud voice was simply "the next step." Since 10% of enterprises use cloud computing, that may suggest that 90% of the enterprise market is the untapped opportunity for hosted PBX vendors.

Some vertical markets in which enterprise hosted PBX sales are the strongest include banking, education, healthcare, and utilities. Since each of these industries overflow with dozens or hundreds of branch locations, hosted and hybrid sales are growing through the roof in these sectors. These vertical markets also pull through SIP sales, including for SIP trunks, session border controllers, SIP phones, and services.

A number of large switch vendors with carrier-grade technology serve the enterprise customer with hosted PBX solutions. Three with deep roots building Class 5 carrier network switches with UC features are Alcatel-Lucent, Cisco, and Ribbon Communications. Others like Nokia and Huawei are sitting in the wings.

This is the sixth in an eight-part biweekly series based on research from Eastern Management Group's exhaustive "Worldwide Hosted PBX Market 2017-2022" report. See earlier posts:

For questions about the hosted PBX study please ask Eastern Management Group researchers.

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