Death Of The PBX

I was talking this past week (okay, eMailing) to a former colleague of mine, who worked in the same company as I did for almost a decade. My job there was writing news and features about broadband and telephony. Hers was writing research papers into the business phone switch (i.e. PBX) market. We both left that company within a year of each other, for only slightly different reasons, and are both now still at it, but on a contract basis.

The tale she had to tell is very telling about what’s happening in the market. I’m writing about VoIP (indeed, this blog is one example) and ever faster broadband. She’s earning her living helping traditional phone switch manufacturers cope with the emerging new world of VoIP, doing custom competitive analysis research.

“The traditional phone system market is declining, and the manufacturers are struggling since sales are way down. The growing market is for Hosted PBX,” she said to me. Hosted PBX, or what some might call “virtual PBX.” The bottom line is that what she’s seeing is yet another reflection of the growing trend of businesses of all sizes to move to the type of business phone service offered by carriers such as Phone.com.

Now here I also do make a careful distinction between competitive VoIP carriers. There are several quite well known companies in the market – we all know who they are – that target primarily residential users. But those companies, by their very nature, offer what’s basically an advanced (and less expensive) version of the same type of phone service that home users have long received.

Then there’s another tier of VoIP carriers – which is where Phone.com fits in – that offers an advanced (and less expensive) version of the type of phone service that small to medium size businesses, including the small office-home office (SOHO) users, are accustomed too. Those are the companies that in the past might have purchased a key system or small PBX. But these days a virtual PBX is the answer, providing even a small business with phone service that has features that once were the province of only very large businesses.