IP-based PBX gains favour among IT managers: report

A power shift from telecom managers to their IT counterparts may help drive the Internet Protocol-based private branch exchange market to US$7.26 billion in four years, according to Frost & Sullivan.

The research firm Wednesday

released a report, World Enterprise IP Telephony Solutions, which says the industry generated revenues of US$1.43 billion in 2001. Much of this customer activity is happening in Canada and the United States, the report says, where we have a high concentration of vendors at the forefront of the IP space.

Ron Gruia, an analyst with Frost & Sullivan’s Toronto office, said encouraging signs for the market include an increase in system size to an average of 63 lines per system in North America last year — roughly double that of the 2000 numbers. Perhaps as significant, he said, was the fact that IT managers are more likely to embrace IP PBX earlier than their colleagues in the telecom department.

“”They just view telephony as just another type of data application over the LAN infrastructure,”” he said. “”It’s just data with a higher priority.””

Trevor Hanekamp, senior telecommunications analyst at Sheridan College in Oakville, Ont., agreed. He said his organization, which recently completed the deployment of about 750 IP phones, has restructured so that telecom

personnel work in the same department as networking and information server staff.

“”I think there are issues there, for sure,”” he said. “”The way our organization sees it, they see the value of having telecom guys there. (But) nobody here thinks they know the other guy’s job better than them.””

Gruia said data on deployments like Sheridan’s is helping to identify some of the return on investment (ROI) benefits of IP-based PBXes. These include reduced staff expenditures, reduction of monthly service charges (due

to fewer lines to the outside) and simpler maintenance. There may need to be more case studies before others take the plunge, however.


“”The market is hungry for more success stories about large enterprise deployments,”” he said. “”Everybody wants to find out with what’s happening to Cisco’s Dow Chemical deployment.””

Challenges to the IP-PBX market include product interoperability because of ongoing disputes between standards bodies, Gruia said, while overall reliability is still below the traditional “”99.999 per cent”” phone companies boast.

“”There will be bugs, there will be errors,”” he said. “”Even though you have mirroring systems that could be ready on hot standby . . . that really is a key issue.””

Hanekamp, however, said IP phone should prove more than capable of matching the performance of old PBXes.

“”As far as reliability, I don’t think PBX can come close, to be perfectly honest with you, if you design it right,”” he said. “”It’s pretty hard, I think, to break the system right now.””

A tough economic climate could also hinder the market, Gruia added. Some of the equipment purchased in enterprises have a seven to 10-year life cycle, and corporations may not want to move to IP until they have gotten the most out of their existing investments, he said.

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