Matt Brunk
Matt Brunk has worked in past roles as director of IT for a multisite health care firm; president of Telecomworx,...
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Matt Brunk | March 27, 2013 |


PBX and Cloud (or Is It Cloud and PBX?)

PBX and Cloud (or Is It Cloud and PBX?) Cloud services and premise PBXs are a potential good fit and offer businesses leverage.

Cloud services and premise PBXs are a potential good fit and offer businesses leverage.

Hybrid solutions have been in telecom ever since I can remember, and I think the more powerful "hybrid" solution for the SMB will be the PBX and Cloud (hosted telephony services). Of course, some attending Enterprise Connect may have heard different messages: "Who buys PBXs?"

PBXs aren't vanishing from the scene, and as long as customers can buy a system that provides a return, solves business needs and serves up solutions, PBXs will continue to be installed.

Decidedly, the market is fractured and Cisco sells the most number of desk telephones (which the prognosticators said were also obsolete).

There are verticals that remain "conservative," including education, finance and healthcare, to name a few. Then there are SMBs that won't push everything to the cloud.

Virtually any business that uses telephones acts as a call center, but many businesses can't afford call center technology. Hosted ACD and PBX that can integrate into existing or new premise PBXs are very viable. This allows companies to use teleworkers and subscribe to pay-as-you-go models for services that they would otherwise not be able to afford on direct purchases.

As I mentioned in a previous post, Intercom traffic (station-to-station dialing) can run as high as 50% in some companies, and of course they may have a choice to use a UC client; some do, many do not. The sub-100 station market is that sweet spot that everyone wants but it won't be easy for cloud providers to take. However, the sub-10 station market is easy pickings for hosted providers.

Another service is Voice Mail and Automated Attendant. Some users will tolerate receiving voice mail messages via email, but some demand having the message waiting light illuminated on their desk telephone. This is a potential area for hosted providers to key in on because it can be done by moving call control to the hosted provider. This means new opportunities can open up from hosted providers to these businesses that still demand premise based PBX solutions.

Traffic engineering isn't given much thought in some all-IP or hosted solutions, just like the fact that Intercom traffic can create bottlenecks over the WAN link, and that the firewalls can wig out on this traffic too.

Audio quality is another targeted benefit of this hybrid relationship. Moving call control to the hosted provider is another good idea so that users who "twin" or have calls ring simultaneously ring their desk phone and their cell phone will use resources in the cloud instead of binding two call paths together in the PBX.

Except for tight integration of ACD with premise PBXs and lighting premise PBX telephones message waiting lamps, pretty much everything I mentioned and more is already done in the cloud by hosted providers. The costs are relatively inexpensive when you come up with a winning combination. That is what requires effort or skin-in-the-game, an element that providers and PBX vendors can't afford to skip.

There are other reasons too for this hybrid relationship to exist. Namely, plenty of enterprises are paying premiums for software licenses and find themselves trapped in the upgrade process of paying dearly for when the company expands. Unfortunately, when companies contract those purchases for expansion remain irretrievable sunk costs.

Earlier I stated that it wouldn't be easy for hosted providers to take the sub-100-station market. Of course they can sell bandwidth to ensure call quality with managed network services, and that will win some businesses.

Recently I met with a business that provides commercial services and installation. They told me they can't afford an IT guy and yet they do $8-10M in sales yearly and run a very well lubricated operation using technology. Hosted solutions aren't the equivalent of providing a company with an IT guy; it's just not the same. Businesses like these demand service and that means to them that someone shows up onsite. Some hosted services may have partners that may provide this service, but some do not. Remote access, VPNs and desktop sharing aren't exclusive replacements for showing up on the customer premise.

These hybrid solutions remain visible in every business that we serve. This doesn't translate to customers voluntarily paying licensing fees for software, because they're not always that willing. Then the most frequent theme that I've heard over decades is often repeated by our customers and prospects that we engage, and a similar message was repeated at Enterprise Connect: "Stick to your core business." That's what our business owners and prospects want the most--time to manage and run their own businesses. Some providers may have it all figured out, and I can't help but wonder whether they have rationalized their solutions, or have they really engaged customers with their solutions face-to-face?

Still, cloud services and premise PBXs are a potential good fit and offer businesses leverage. I also think that any premise PBX sold today is provided with surgical precision and if it's not, it will likely not stand the test of time.

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