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COVID Has Little Impact on the Global PBX Market in 2021

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Image: Yanawut Suntornkij -
COVID vanquished entire industries (e.g., food supply, airlines) in 2020-2021 while handicapping others (e.g., healthcare, insurance). What contributed to far lower unemployment than a worst-case scenario, however, was unified communications (UC). UC systems and applications turned work-from-home (WFH) and work-from-anywhere (WFA) into productive and valuable time. All in all, it hasn't been a bad year for PBXs.
A recently released report by Eastern Management Group, "Worldwide Hosted and Premises PBX Market 2021-2027 and Managed Services," examines where we stand today in terms of UC shipments, applications, and what lies ahead.
In any prior decade, the PBX industry would not have fared well against COVID. Yet more than 50 million employees benefited from a new phone system in 2021 for many reasons, including:
  • A dozen productivity improvement features on new UC systems like mobility and video kept vendors selling and customers humming as employees could now work-from-anywhere
  • For as little as $20 a month, an employee could benefit from a new unified communications cloud phone system capable of driving a 50% increase in productivity.
  • Premises PBX street prices fell, which helped bolster sales
The Bottom Line
Eastern Management Group research indicates that 2021 was a good year for UC for the following reasons:
  • The PBX industry slowed but performed well overall
  • Cloud (UCaaS) systems were a third of all new PBX sales
  • Premises PBX system sales declined less than expected and accounted for 40% of all shipments
  • Hybrid PBX and virtualized PBX platforms showed resiliency with a combined 25% PBX market share
Additionally, manufacturers and dealers selling cloud and premises PBXs found a ready market for their UC throughout COVID. RingCentral, for instance, reported 36% revenue growth in the company's recent 10Q. 8x8 fiscal 2021 revenue jumped 19%. Eastern Management Group has also been impressed by some stalwart premises PBX providers like Alcatel-Lucent Enterprise (ALE) and Cisco.
Don't Forget about the Replacement Cycle
Because systems break and companies move, there are eight-to-nine-year PBX replacement cycles. While COVID drove many PBX replacements, additional thrust came from the replacement cycle.
The table below shows why companies got a new UC system in 2021 based on data gathered from 425 IT managers by the Eastern Management Group.

Where to from Here?
Employees are returning to the office. The U.S. Bureau of Labor Statistics reports 13% teleworked or worked from home in August 2021, reducing from 35% in May 2020. UC tools available to employees are well suited to work-from-anywhere.
The following five areas are where I'd place my bets for the future:
  1. Video - We would be mired in unemployment without user-friendly video from Zoom and others. Hybrid work assures a future.
  2. Contact center - This UC application works wonders. Agents can remain home. Back at the office, they continue to perform. Strong demand will continue.
  3. Mobile - Research in our new report shows 93% of IT managers say mobile is essential to their business.
  4. SIP - This connective tissue is growing by leaps and bounds. SIP trunking is the explanation behind successful UC and work-from-anywhere.
  5. Presence – Post-COVID, IT managers must expect employees to work from home. Presence does away with telephone tag and other inconveniences. Our research shows 88% of IT managers want presence in their company.
Final Thought
One may expect continued PBX growth throughout the decade, according to Eastern Management Group analysts. New PBX sales should well surpass 50 million seat/line licenses every year. No matter the phone system platform, there's not a bad PBX market to be in today.
For information about the Eastern Management Group report "Worldwide Hosted and Premises PBX Market 2021-2027 and Managed Services," contact John Malone directly at [email protected]