Currently, the global PBX market is worth $40 billion dollars, according to Eastern Management Group. This market is set for a significant shift, however, as options such as open source and hosted PBX services gain popularity. Hosted alternatives especially are becoming go-to options for companies worldwide. Here are five signs that point to increased adoption through 2015.
Improved buying power
According to Digital Journal, hosted PBX solutions offer a “buyer power” of 4.1 out of 5, indicating highly favorable conditions for interested companies. With a large array of substitutes — such as on-premises PBX and traditional landline systems — businesses are now able to negotiate the ideal combination of price and feature set.
This kind of leverage is also made possible thanks to strong competition in the marketplace; no single vendor has emerged as the “de facto” standard for hosted PBX, and more than 75 percent of providers have fewer than 20 employees. Additionally, low barriers for entry and a secure supply chain conspire to create a buyer’s market. As a result, expect 2015 to be a banner year for this service.
Better VoIP support
Every company has horror stories about how their VoIP system failed at a critical moment or an important conference call became a static-filled, lag-ridden mess. But the trend toward VoIP service continues as businesses opt out of plain old telephone service lines in favor of the global reach provided by IP-based telephony.
The simplest way to improve service? Put VoIP in the cloud by using a hosted PBX instead of on-site servers for increased uptime and “fail over” ability if disaster strikes your primary stack.
This drive for better VoIP support has also led to the development of viable multi-tenant cloud PBX systems. Reduced costs and better service should help drive hosted PBX interest through 2015.
A different kind of communication
Of course, VoIP is just the beginning. The real end game here is unified communications (UC), which includes not just voice telephony but video calls, text messaging and other media-rich interactions.
As noted by No Jitter, the first generation of UC systems were on-premises and will keep bringing in revenue for at least the next decade. But this on-premises UC market is dying and will soon be replaced by scalable, agile and cost-efficient clouds — investment in local services no longer makes long-term sense.
And while most companies aren’t ready to make the leap and put all of their UC eggs in the cloud basket, many see the benefit in handing over video calling to an outside provider to save on bandwidth costs and improve connection speed.
Hosted PBX systems act as an easy first step from on-premises deployments to in-cloud alternatives, allowing companies to keep critical UC elements close to home while paving the way for long-term, streamlined adoption.
What’s old is new again
It’s also worth noting that the communications market is undergoing a rapid shift: consider the decision of 800-year-old Oxford University to replace its aging digital exchange system with a new unified communications solution. According to Diginomica, the new service will start rolling out to the university’s 40,000 students and staff sometime in 2015, providing built-in ways to video conference, find and call colleagues or send text messages if they’re not available.
This puts hosted PBX systems on the cusp of a widespread market shift. As existing PBX systems in public and private institutions reach end-of-life, IT professionals are looking for simpler ways to handle communication needs while C-suite executives want OPEX, not CAPEX-driven spending.
The big benefit of previous-generation PBX systems? Callers were met with enterprise-level menus and messaging features while companies got the benefit of a single outward-facing number or series of numbers that were easy to remember and could handle large call volumes. The big downside? Cost.
Hosted PBX systems give the same type of enterprise authority to any company, no matter their size or industry, but without the cost of hardware. In effect, going hosted levels the communications playing field in the same way cloud computing flattened out IT efficacy.
When specialty services start to commoditize, the result is mainstream adoption. Expect significant gains for hosted PBX popularity through 2015 thanks to improved business buying power, VoIP support, the availability of enterprise-level service and use as the backbone of next-gen UC systems.
Sheldon Smith is the senior product manager at XO Communications, the nation’s leading telecommunications provider specializing in VoIP and management system services. Hosted PBX and conferencing are the two products that Sheldon has complete overall ownership of at XO, due to his extensive background in the unified communications industry.