ENTERPRISE PBX: From Circuit to Packet Switch

Today more and more vendors are offering desktop applications integrated with
various capabilities and applications like e-mail, instant messaging, directory
services, and CRM. There has been a significant effort in providing these
services across enterprises regardless of geography and the type of equipment-whether
a TDM- or IP-based PBX. With ubiquity being the expected norm these applications
are available with a mix of communication methods. This enables increased
productivity with improved communication and interconnectivity of various
communication devices to the systems.

Technology options

From circuit to packet switch: PBX systems in their traditional offerings
have reached a maturity level. Though there has not been any significant growth
on the pure-PBX market, there has been a transformation on the technology front.
With a high demand for convergence, there is a shift from digital,
circuit-switched voice communication toward a convergence of voice- and
data-communication on networks, where IP and packet switching is used as the
underlying communication technology.

Another trend, which has been catching attention, is centrex. In centrex, all
the switching happens at a local telecom operator's ends instead of the
organization's premises. It is a very cost-effective way of having a PBX
within an enterprise. The PBX will be a virtual PBX in the customer premises and
actual voice features will come from the central switch at the service provider
exchange.

Deployment trends

There are two clear trends in communication system deployments.

- First, the existing PBX users are looking at easy steps for IP
migration, without disrupting the existing investment. Here the converged IP
systems are very well positioned to offer legacy connectivity and the feature
richness of IP.

- Second, deployment trend is to go for pure-IP deployment. This trend
is popular for the greenfield projects, small overseas call centers, etc.

The voice communication over an IP-PBX system is more efficient. In VoIP
systems voice signals are transferred as data in an IP network. Today VoIP and
data capability are being added to the traditional PBX voice systems. Also voice
TDM line cards can be swapped with IP-enabled ports in new systems.

With the help of open systems, both voice and data can be handled using IP.
This means that value-added services like CRM, supply-chain automation, and
streaming media can be supported. Most PBX systems are being modified to enable
Internet data exchange, video communications, and the likes.

VPBX is another business phone system which requires no customer-installed
equipment. It provides call routing, follow-me calling, voicemail, fax-mail, and
ACD queues delivered over a PSTN system.

The way forward

The industry is moving towards unification. Enterprise and carrier networks
are overlapping in functionality. The way forward in such scenarios is to offer
comprehensive solutions catering to different market segments like SOHO, SME,
and large enterprises. Extensive customer reach backed up by high-quality
service support will be a differentiating factor. Offering solutions for the
specialized verticals like hospitality, trading etc. will generate a new market
segment.

IP-converged
network is a basic requirement of an enterprise. However, offering the real-time
IP applications on converged networks will revolutionize the enterprise
communication market.

In-Stat/MDR expects the number of IP lines shipped in PBX systems to touch
15.9 million by 2008.

User issues

Users today need easy graphical user interfaces. Most of the time, end users
do not use the rich telephony features because of complexity. In such
situations, intelligent terminals with context sensitive help for users is in
demand. End users also look for easy moves, changes, and relocations.

The Challenges

PBX industry is witnessing a drastic change on the technology front. With
introduction of technologies like IP telephony, the definition of enterprise
communication itself has changed. So continuous enhancement of product line, to
cater to the latest IP technologies and simultaneously decreasing price levels,
are the main challenges faced by PBX industry.

Also many more customers are looking for pure-IP deployments but the
prohibitive costs of IP terminals restricts the large-scale deployment of pure
IP systems. On an average, the converged systems are available at Rs 4,000 per
user while pure-IP systems, including IP terminals, are available at Rs 15,000
per user.

Looking Ahead

In the coming years, traditional PBX market will shrink. This will be
replaced by the IP-enabled PBXs, IPconverged systems and pure-IP systems. In a
nutshell, the market for enterprise communication systems will grow at the rate
of 25 percent.

Exactly what would the adoption of IP-PBX. Will it replace TDM in the coming
years? Time-division multiplexing (TDM) is a type of digital multiplexing in
which two or more apparently simultaneous channels are derived from a given
frequency spectrum, i.e., bit stream, by interleaving pulses representing bits
from different channels.

Replacement of digital proprietary voice systems with systems that can handle
the Internet with combined voice, data, and video will favored. Music, Internet
TV, and VoIP are the market drivers. Companies will increase the use of data
over networks.

While galloping technological advancements have ushered in amazing new
features and inversely lower prices for most office equipment, full-featured
phone systems have remained largely out of reach for small companies. Most small
companies are forced to cobble together telephone solutions with a combination
of multi-line telephones, answering machines, and costly monthly telephone
company services.

On the SOHO market front, customers are still going for the regular EPABX/KTS
systems but they are looking for IP-ready and broadband-ready systems.

Small Business Solutions

Are small companies without phone systems getting their voicemail? How are
they handling incoming calls? How do they integrate teleworkers and mobile
workers? They might be using services like centrex; telephone-company voicemail,
and separate lines for each phone user: all of which boost the the monthly phone
bills.

And there's no real integration with offsite workers, other than simple
call forwarding.

PBX for SOHO

PBXs have traditionally been systems used by organizations with thousands of
employees. The few manufacturers who looked at small-sized companies could not
scale the concept down and did not have the complete domain knowledge to offer
cost-effective profitable solutions.

The challenges which the SOHO segment faced were: installation, ease of use
of the product, and expensive proprietary equipment. Very few vendors cater to
the small businesses, but the ones who do offer products, mostly have all the
features of traditional counterparts at effective prices.

When shopping

When shopping for a system, look for the ability to easily install and
configure it on your own. Installation can cost a significant percentage of the
total cost of traditional phone systems. User-configurable systems allow you to
control the way your phone system works without having to pay the manufacturer
or a third-party technician to do it for you. The best of these new small
business phone systems enable you to do it yourself and save on cost.

Phone Integration

Another important feature to look for is cellphone and cordless phone
integration. If you have tele-workers and mobile workers, you need to be able to
collaborate smoothly without giving out dozens of different numbers to your
clients. There are systems in the market that can connect all of your phones
through one central system with one number.

Scalable Systems

Expandability is crucial too. Make sure that the system you buy today can
grow to accommodate the changes in your company tomorrow. And the changes in the
industry-with the emergence of VoIP technology and new advanced Internet
telephony services-your phone system needs to be ready to connect to the IP
network while maintaining your connections to the traditional telephone network.
Look for hybrid systems that are built with SIP standards to ensure
compatibility and avoid obsolescence.

No doubt IPBXs are substituting legacy PBXs. Asterisk-based solutions are for
the reseller with Linux expertise and the need for full control of the solution.

IP-PBX in Europe

According to a recent study titled 'European IP-PBX equipment market-moving
toward converged networks' by Frost & Sullivan, the Internet Protocol
Private Branch Exchange (IP-PBX) market demonstrated strong growth last year,
generating total revenue of EUR 589.35 million. The study predicts the
technology to continue expanding at a compound annual growth rate (CAGR) of 30.3
percent to reach EUR 1.78 billion in 2008.

Adoption of universal standards like session initiation protocol (SIP) will
eventually lead to the adoption of IP-PBX solutions within the corporate world.
The analysis forecasts IP-enabled, PBX line shipments in Europe as likely to
increase to 2.34 million lines in 2008. Growth of IP-enabledline shipments is
expected to be particularly high in 2005 due to higher adoption in France and
Germany. However, it is expected to reduce from 2006 onwards due to the
increased adoption of converged solutions and hosted IP telephony.

Among the most cautious countries to adopt the technology are Germany and
France-probably because of the huge investments made by Deutsche Telekom and
its preference for a system of phased migration.

CIO speak

Replacing existing systems with a completely new IP-PBX solution is not
feasible, neither in terms of cost nor ease of replacement. The preferred route
to be adopted is the evolutionary approach, to avoid disruption in the
communications at the organization.

More often, businesses take the migration path to new system instead of the
rip-and-replace approach. There are some applications that allow businesses to
migrate on a budget and a pace that suits them best. For example, a TDM-based
PBX will continue to run the headoffice while you deploy IP-PBXs in your branch
offices.

With the recent applications, phones have become devices that enable instant
messaging, transfer of information and documents, status on availability of
colleagues, and much more. Complete business information and directories can be
accessed, thereby enabling timely communication and increased productivity. This
has truly integrated ubiquity in day-to-day operations.

One does not need to wait for SIP to be ubiquitously deployed for this kind
of robust application support. Such systems and capabilities are not only
available today but can also be deployed on the new IP-telephony system, older
TDM telephone system, or a mix of systems.

NEXT GEN IP-PBX

Truly converged networks are gaining significance. Converged IP-PBX networks
bring together not only voice and data on the same network, but also unified
messaging and other desktop applications on a single, manageable solution.

There
is an array of IP-PBXs such as: traditional PBXs with add-on VoIP cards, PC-PBXs
with VoIP add-on cards, and routers/switches with embedded VoIP functionality.
Classically, these routers/switches were designed with IP at their core and then
telephony/voice was added on top. On the other hand, traditional PBXs and
PC-PBXs were designed with telephony/voice at their very core and then IP was
added on top.

A truly converged enterprise communications system architecture ensures
linear scalability, cost resiliency and reliability, ease of administration and
management, a wide variety of end-points and network elements (no vendor
lock-in), support for legacy equipment, and a fully enabled end-user experience
all in a single system that runs on an existing heterogeneous network
environment.

IP-PBX to Surpass TDM Systems in 2006

According to a research by Dell'Oro Group, IP-PBX shipments will reach 28
million lines in 2006, surpassing time civision multiplexing (TDM)-based
shipments.

Generally, in some TDM systems, successive pulses represent bits from
successive channels, i.e., voice channels in a T1 system. In a few other
systems, different channels take turns using the channels for a group of
successive pulse-times (so-called 'time slot'). Primary distinguisher of
coarse time-division multiplexing from packet switching is that the time-slots
are pre-allocated to the channels, rather than interceded on a per-time slot
basis.

According
to analysts, while IP-PBX shipments will overtake those of TDM in 2006, the
conversion of the installed base from traditional TDM systems will take time.
Currently, more than 90 percent of the installed base is TDM and will still be
the majority of the base throughout 2009.

With a conventional PBX, separate networks are necessary for voice and data
communications. One of the main advantages of an IP-PBX is the fact that it
employs converged data and voice networks. This means that Internet access, as
well as VoIP communications and traditional telephone communications, are all
possible using a single line to each user. This provides flexibility as an
enterprise grows, and can also reduce long-term operation and maintenance costs.
Like a traditional PBX, an IP-PBX is owned by the enterprise.

In the research firm's report, analysts believe that IP-telephone shipments
have entered a period of sustained growth. The IP-telephone market will expand
from simply a PBX handset business into an emerging IP-centrex and residential
VoIP markets. Consumer wireless LAN (WLAN) phone introductions in 2005 will
stimulate IP-telephone sales to residential VoIP subscribers.