The PBX Is Dead; What Do You Do Now?

It happened at about 9:33 AM Eastern time on March 19, 2013. In the opening General Session Fred Knight, GM/Co-Chair of Enterprise Connect, asked three customer executives if they would ever buy another PBX. One had already committed to moving to the cloud and had that migration in progress, so that answer was, “Not in the foreseeable future.” The other two responded that their intention is not to buy another PBX. In addition, vendor after vendor on the show floor was talking about “voice is just another bit stream,” and also was demonstrating how their equipment really treated it that way. The era of a standalone voice communications system is over. From my perspective, this is a pretty clear public answer to a question that has been asked for about 10 years now. The question: Is the “PBX” dead? The answer: Yes, a panel of enterprise IT Execs declared the PBX is dead on March 19, 2013.

So what do you do now? Here are three important answers:

1. Don’t buy another PBX (or an IP PBX). Most PBXs in the market today will last another 5 to 10 years and most vendors will continue to maintain the three most current releases of those PBXs to keep them functioning reliably throughout that time.

This is also advice to avoid replacing your PBX if at all possible. That is not necessary and is a waste of time and money, especially in context of the two other answers below. But, if you haven’t been keeping your PBX at current releases and decide that you “must” replace it, then at least consider the two points below before you spend money, so that the PBX is replaced by unified communications voice media streams, likely with as few desktop phones as possible.

If you want to save on the costs of trunks and long distance, then use gateways to access your enterprise WAN or SIP trunks or Ethernet Backbone carriers from the existing PBXs. If you want the new functionality often known as Unified Communications, Collaboration or Social Business, then buy the UC system you need and install it next to the existing PBX. At Enterprise Connect, we showed the results of our RFP: UC Without a New IP PBX. The results based on written RFP responses and price quotes from seven vendors show that you can get the new UC functionality for half the cost by repurposing, rather than replacing the existing PBX and the attached phones.

2. Understand how new communication capabilities can transform your business. Communication technologies have changed, dramatically, over the past 10 years. This represents the same “sea change” magnitude that we have seen in the past with the automobile, the airplane, the Internet, the web, and wireless mobile devices. It is really important to figure out how to take maximum advantage of changes both in (a) infrastructure (Ethernet, Internet, PCs, mobile devices, software) across all media and (b) communications tools and applications (presence, e-mail, instant messaging, video calling, web sharing, voice/video/web conferencing, social networking, collaborative workspaces, application programming interfaces [APIs] and software development kits [SDKs]). All of these changes are in combination with or include voice media, of course, but all of them can go far beyond management of traditional (aka PBX) voice calls.

To find the opportunities for business transformation, examine the workflows and the business processes. Just like Lean Six Sigma tools find the improvement opportunities in Manufacturing, and just like workflow analysis makes call centers into sources of improvements and business benefits, examining workflows and business processes from the perspective of these new communication technologies will almost certainly yield a long list of opportunities. Usually, this also provides a definition of Usage Profiles which match specific sub-sets of the new technologies to specific groups of users in your business.

3. Buy business transformation, not just Technology: Once you have an understanding of the transformation opportunities, it will be both feasible and economical to organize your new communications system investments into a roadmap of modest-sized, high-return projects which are targeted at the most strategic (for your business, not the vendor’s sales plan) opportunities. This will almost certainly deliver a solid string of business benefits.

We know this approach works, since we have been doing these sorts of reviews with our clients for the past six years. As the technology advances and as the systems integrators get more and more capable, and as the case studies of success continue to pile up, now is definitely the time to re-direct the talent and the precious capital and operational assets of your company away from the routine—and now dead-end—decade-by-decade PBX replacement and focus on the transformations possible with these marvelous new technologies. We wish you success with your transformative efforts.

13 Responses to "The PBX Is Dead; What Do You Do Now?" - Add Yours

Art Rosenberg 3/28/2013 7:52:54 AM

Great advice, Marty!

I would also suggest that the biggest change in business communications will be driven by the shift from "person-to-person" voice contacts to direct, multi-modal interactions between business process applications and different types of individual end users. That would replace the many unnecessary inefficiencies of person-to-person" real-time contact attempts required by telephony.

I also believe that the impact of multi-modal mobility will be a practical first target for UC implementation planning, since UC flexibility is most needed when an end user is using a mobile device.

Dave Michels 3/29/2013 10:54:18 PM

Utter nonsense. The PBX is dead? It is no more dead than when you wrote The PBX Isn't Dead (https://ucstrategies.com/unified-communications-strategies-views/the-pbx-isnt-dead-but-it-is-certainly-changing-roles.aspx) in Oct 2011.

"I won't buy another PBX [because I moved to the cloud]" can make sense, but that's just moving the PBX, not a eulogy.

I do agree with you here: "The era of a standalone voice communications system is over." But your implication that a PBX only provides standalone voice communications is flawed. Technologies evolve more often than they die.

The original PBX had patch cords that company operators used to connect calls. The PBX evolved to mechanical switching, then evolved to electronic switching. Analog gave way to digital which evolved into VoIP. The PBX has evolved for a 100 years.

At one point it only offered real time voice communications. Then came DTMF enabling end to end signaling. Then came stored messaging with voice mail. Advanced call routing in call centers, IVR features. VoIP opened a whole new world - teleworking, mobility, softphones, click to dial, IM/presence and video, and APIs and CEBP. Evolution Baby!

Sure Nortel is gone - bankruptcies happen and it's been some turbulent times - but is it any wonder that the PBX makers of yesteryear are the still major UC vendors today (Mitel, NEC, Avaya, Aastra). Even the new kids like Digium, ShoreTel and Cisco which got into at the VoIP stage started with core voice PBX functionality and then evolved.

Stop mourning the death of the PBX and celebrate its ongoing evolution. Communications continue to rapidly evolve - no slowing in sight - luckily the PBX makers understand evolution and continue to invest heavily into the future.

PBX is a fuzzy term- few vendors will claim it. But that is also true of UC. Communications is what is and remains critical.

Related post: https://ucstrategies.com/there-is-a-shift-afoot.aspx

Marty Parker 3/30/2013 1:26:49 PM

Hey, Dave,

Thanks for the lesson in PBX evolution. Of course, I agree with you that the PBX has come a long way, but perhaps a shocking headline is necesary to shift attention beyond the focus of IP Phones and SIP trunks.

Those formerly PBX vendors you name may have added some virtual machine servers to their technology stack, but there's scant evidence of them shifting their business models to emphasize the major improvements to business processes that come from all the other communications tools, whether separately or in combination with real-time voice or video. Until we see such a shift in business models, marketing messages, and channel enablement, it is necessary to warn enterprise buyers that a proposal to replace all their phones so they can get SIP trunk savings is a wasted investment in a 'dead' PBX.

By the way, I don't think you found any evidence in my post that I was mourning the PBX. I'm celebrating.

And, as you say and as the article recommends, it is all about 'communications' to support and to improve enterprise operations, no matter what we call it. I think that's what the customers at Enterprise Connect were saying. It's worth listening to them.

Art Rosenberg 4/1/2013 5:42:28 PM

Marty and Dave,

The "evolution" of the PBX will also be affected by the slow transition of the PSTN to what is well described by Russell Bennett in his recent post :

https://www.nojitter.com/post/240152015/morphing-sip-trunking-into-federation

Just as this next stage of communication services will impact telephony, it will also involve UC-enabled business process applications. The functional limitations of telephony, including IP Telephony, will be subsumed by multi-modal communications.

Hyoun Park 4/2/2013 8:05:47 AM

I agree that the PBX is ready for its next stage of evolution, but Blackberry missed out on its opportunity to "Be the Change." With the smartphone revolution, the deskphone UI has become irrelevant. Who would really rather use a deskphone rather than an iPhone or Android phone at this point?

If you could simply FMC all the mobile phones together, add mobile device/app management, and coordinate the voice, messaging, and video capabilities somewhere, you'd have that next-gen communications server. There's still a need for that aggregation; it's just that so many vendors are still wedded to the idea of selling their own endpoints even as Apple, Samsung, Logitech, Plantronics, Jabra, and others are commoditizing every aspect of that market to a point where the PBX competitors can't stay competitive.

So, I'd agree that the PBX isn't dead, but it is ready for its next stage of evolution. It's been a few years overdue, but we'll see who will be the first to step up. Seeing how none of the PBX vendors have bought an MDM/enterprise mobility player, it looks like it'll continue to take a while.

Art Rosenberg 4/3/2013 8:36:53 AM

Hyoun,

Good point about mobile endpoints!

While it may be true that information workers will still use desktops and "softphones," they will also be carrying mobile smartphones and tablets. That makes it important for them to easily manage their "dual persona" contacts from whichever device they are using at the moment.

Fabrizio Capone 4/30/2013 9:45:14 AM

from my point of view the pbx is a "son" of the public switch. It'll be remain the focus of entreprise communications until the Carriers offer new worldwide communication features. Today only voice and email are compliant with this definition, so an enterprise must keep working is pbx and email server. Not necessary on premise...

Bill Soto 6/20/2013 11:43:37 AM

let us all remember that in today's world the PBX is nothing more than another application server that resides on a local area network. Whether you have an on premise PBX or a hosted PBX your infrastructure such as cabling, data network elements with data switches and routers are identical for both solutions. The only thing you are doing is moving the call control to a cloud solution.

I normally recommend a hybrid hosted solution with the client purchases their PBX and then places it in the hosting center or data center and now they had the best of both worlds. They can now enter and manage their telephone system and pay a flat rate monthly fee for the co-location services where they have redundant power and redundant broadband connections. But unlike many hosted providers are not paying a per extension fee or per feature fee from a hosted provider.

In addition, there are many technical reasons to have a premise-based PBX especially if you have above 100 extensions at a single location and you require call recording and many call center solutions which are based on a hosted solution would be very expensive on a month-to-month basis and a premise-based solution would actually be the right solution.

I am a strong proponent of hosted PBX solutions for the under 50 extension market which of course is an incredibly large market, however, like any other solution it is not deployed properly nobody's going to be happy. Technical expertise in presales and post sales is still a critical element when providing communication solutions and many hosted providers are not investing sufficient time into training their staff to represent hosted solutions properly and this is where the trouble begins.

Don't get me wrong, hosted PBX is a great solution and is definitely the wave of the future but it will never have 100% market share because there is always very good sound technical reasons to have a premise-based solution.

Danny S 6/20/2013 1:28:32 PM

Very interesting discussion above, thank-you all.

Our company is coincidentally weighing the different options for replacing our 17 year old PBX.
Our 17 year old PBX is an Inter-Tel Axxess system which has been upgraded several times and which has been VERY good to the company. But alas, parts, software and qualified techs to work on the system are becoming more scarce every day.

We currently have about 45 traditional style office phones, a receptionist with a switchboard (as in: a board with lights to show who is on their office phone and buttons to transfer incoming calls :). The hosted PBX 'cloud' solution that I looked into (Ring Central) would be about twice the cost of buying a new in-house PBX (projected over 5 years) and, aside from providing some disaster contingency; it would be less useful and less functional for our Business, over-all. For instance, we would no longer have an Intercom, our receptionist could not effectively screen calls and she would generally not easily know who was or was not already on the phone.

I also can't imagine a need for our office phone numbers/extensions to ring our cell phones (we can forward our office DID #'s now and I don't think anyone has ever done that) or, for our cell phones to run Apps which connect them to our office phone system. Also, for us, soft phones don't seem likely to replace the new, wonderfully voice-functional VoIP hand-sets that sell for about $250.

Am I missing something or is 'PBX in the cloud' just not ready for us? Thanks!

Danny S 6/20/2013 1:48:29 PM

Very interesting discussion above, thank-you all.

Our company is coincidentally weighing the different options for replacing our 17 year old PBX.
Our 17 year old PBX is an Inter-Tel Axxess system which has been upgraded several times and which has been VERY good to the company. But alas, parts, software and qualified techs to work on the system are becoming more scarce every day.

We currently have about 45 traditional style office phones, a receptionist with a switchboard (as in: a board with lights to show who is on their office phone and buttons to transfer incoming calls :). The hosted PBX 'cloud' solution that I looked into (Ring Central) would be about twice the cost of buying a new in-house PBX (projected over 5 years) and, aside from providing some disaster contingency; it would be less useful and less functional for our Business, over-all. For instance, we would no longer have an Intercom, our receptionist could not effectively screen calls and she would generally not easily know who was or was not already on the phone.

I also can't imagine a need for our office phone numbers/extensions to ring our cell phones (we can forward our office DID #'s now and I don't think anyone has ever done that) or, for our cell phones to run Apps which connect them to our office phone system. Also, for us, soft phones don't seem likely to replace the new, wonderfully voice-functional VoIP hand-sets that sell for about $250.

Am I missing something or is 'PBX in the cloud' just not ready for us? Thanks!

Art Rosenberg 6/22/2013 11:56:55 AM

What is slowly, but surely, going to change is how a person-to-person" voice "call" will be initiated. It will be done "contextually," not from knowing a phone number, but from online information, e.g., a directory, a message, a document, etc., and will also be based on the callee's availability and federated presence. That would minimize the need for first calling a "main number" and talking to a live attendant to screen and transfer calls. It is also beyond dialing a DID number and running into "voice mail" jail.

Obviously, other alternative forms of communication will be available to a contact initiator (caller), including IM and asynchronous messaging, that can all be easily accommodated by multi-modal smartphones (that can also be connected at a desktop, e.g., ShoreTel). So, your "wonderfully-functional VoIP handsets" will be upstaged by BYOD dual-persona, multi-modal devices that go beyond just a location-based real-time voice connection, but can also offer dynamic "click-to-talk" options to the end users anywhere, anytime..

I know this may still sound "futuristic," but as consumer adoption of smartphones continues to dramatically increase, it will drive the "future" rapidly to the present.

Danny S 6/24/2013 8:46:57 AM

'So, your "wonderfully-functional VoIP handsets" will be upstaged by BYOD dual-persona, multi-modal devices that go beyond just a location-based real-time voice connection, but can also offer dynamic "click-to-talk" options to the end users anywhere, anytime..'

I have no idea what that means, could you perhaps clarify that a bit?

My iPhone is a great and powerful device to be sure. However, when I'm siting at my desk, I use my 17 year old office hand-set phone as does every one of our 40+ employees. Strictly in terms of siting at a desk, listening to and talking to someone else at a different location, the 17 year old hand-set is better than any smart phone, better than any soft phone, better than Skype, etc. etc. That might seem old-fashioned, outmoded or whatever but, it's also true.

Micheal Owens 6/24/2013 9:00:02 AM

Very interesting discussion above, thank-you all. We have at this time, one host and seven remotes. We supply dialtone to approx. 30,000 subscribers. Yes, we were Nortel backed but things have changed as you already know. Now we do ISDN, Voip and pots with either digital and analog sets. Where is the security in a BYOD, or a cloud? Maybe once I get passed that I would be better available to agree that the PBX just might be dead. We have in our plans to purchase two new switches (Avaya) but that is at least another year. Appreciate your collective thinking.