As most users opt for IP telephony for their next private branch exchange, some vendors are preparing to sell software-only communications products that can work on an off-the-shelf server. But don
With the release of products such as Microsoft Corp.’s Office Communications Server (OCS) and Avaya Inc.’s Aura, your next private branch exchange (PBX) could very well consist of software loaded on to a server you buy from the manufacturer of your choice, rather than a specialized piece of hardware purchased from a telecommunications vendor.
Most PBXs sold last year were based on Internet Protocol (IP) rather than traditional time division multiplexing (TDM), but the same concerns users have had since the 90s continue to dog IP PBX vendors.
Take emergency 911 services as an example. This is one important feature for PBXs for the University of Toronto.
Maher Saad is an IT manager at the University of Toronto in charge of telecom systems for a student residence. His organization uses a TDM PBX.
In an e-mail to Network World Canada, Saad cited emergency 911 as one critical service. Other PBX features important to him include: zero down time when a large number of users are making calls at the same time; availability of dial tone at all times; ease of management; and the ability to transfer and forward calls. The university also needs conferencing and caller ID.
In the past, the business case for IP telephony may have been the ability to cut long-distance charges by combining voice and data traffic, said Matthias Machowinski, directing analyst for enterprise voice and data at Campbell, Calif.-based Infonetics Research Inc. Today, the justification for spending money on IP telephony is the ability to combine voice and data networks into one, Machowinski said.
“It’s cheaper to run one network with multiple applications, instead of multiple application-specific networks,” he said.
Another driver is the ability to combine voice systems with other software. For example, a customer service agent could answer a call and refer to an e-mail a customer had sent to the company earlier.
Saad said voice over IP is not ideal for all types of businesses. He is convinced VoIP will provide more features than his organization needs at his location. But to implement it, the University of Toronto would have to replace all handsets and install Category 5e Ethernet cabling, which would not save the school money.
The decision to adopt VoIP depends on several factors, Saad wrote. These include the size of the organization; the nature of the building’s infrastructure and the quality of the Internet connection, which affects bandwidth and latency.
In the case of the University of Toronto, the school would need to buy more than one switch in order to handle enough concurrent calls, Saad wrote.
Saad has used phones based on Avaya Inc.’s Aura but has never managed such a system himself.
Aura, released last March by Basking Ridge, N.J.-based Avaya, is a concept whereby corporate telephony is run off a commercial off-the shelf server loaded with software such as Avaya Communications Manager
Right now, Avaya sells the Linux-based server along with the software due to concerns that users who buy their own servers may select hardware that is not reliable enough to handle their phone calls.
“We need to ensure the server is hardened so we don’t compromise mission-critical communications,” said Amir Hameed, national application sales and system engineer for Avaya Canada.
Eventually Avaya plans to give Aura customers the option of selecting their own hardware from a server vendor, instead of buying both the software and server from Avaya.
Hameed said Aura is designed to work with PBXs from different manufacturers, using session initiation protocol (SIP).
“Avaya is doing a lot of work in being able to work with any PBX, taking care of that session management regardless of whose infrastructure you deploy,” Infonetics’ Machowinski said.
Avaya is not the only enterprise telecom vendor focussing on software, said Jonathan Edwards, research analyst for unified communications with Framingham, Mass,-based IDC.
Other vendors in the market include Munich-based Siemens Enterprise Communications GmbH & Co., with its OpenScape product. Siemens did not respond to a request for comment for this article.
When companies cut back on spending during the recession last year, one of the items many technology managers did not buy were PBXs, according to figures compiled by Infonetics. Worldwide, PBX manufacturers sold US$7.7 billion worth of products, down 22 per cent from 2008.
“The economy impacted the PBX market significantly,” said Machowinski said.
Ten per cent of PBX revenue is still from sales of traditional TDM gear, he added.
The No. 1 vendor in 2009 was Cisco Systems Inc,. which sold US$1.4 billion worth of PBXs. Avaya was a close second with US$1.3 billion in sales and Nortel Networks Corp. had PBX revenues of US$500 million. Infonetics compiled those figures before Avaya acquired Nortel’s enterprise business in late 2009, so if Nortel and Avaya shipments were combined, they would have sold US$1.8 billion, or $400 million more than Cisco.
At press time, Infonetics had not compiled its results for the first quarter of 2010 but Machowinski said Avaya is “only slightly ahead” of Cisco right now.
Infonetics does not break out shipments of PBX software such as OCS and Aura, but Machowinski believes software-based telephony is becoming a trend.
“The main signal this is coming to fruition is Microsoft’s latest iteration of Office Communications Server,” he said. “It’s well positioned to challenge all the major functions of traditional PBXs.”
Past versions of OCS did not have functions telecom managers needed, such as emergency 911, Edwards said.
Microsoft is currently shipping release 2 of OCS 2007. Microsoft claims you can install it without having to replace existing PBXs, and users can call by clicking on a person’s name in a contact list. It also includes call forwarding and transfer, plus “team calling,” which lets users setup the system so that when their phone rings, the phones of their team members will also ring.
A spokesperson for Microsoft Corp. claimed that OCS costs less than half of what a stand-alone voice over IP system would have cost three years ago, but it also includes conferencing, video and instant message.
But Edwards warned users not to under-estimate the cost of upgrading Ethernet infrastructure to support voice.
“It has to deliver packets seamlessly so you don’t have jitter and latency,” he said. “Companies have been caught off guard by how much they have to invest in their network.”
IDC advises users to assume that for every dollar they spend on IP telephony they should be prepared to spend an additional 80 cents on the network. When you add video to the mix, be prepared to spend $4 on the network for every dollar you spend on IP telephony, Edwards said.
Organizations such as the University of Toronto seem to have concerns.
“To maintain a large concurrent call volume, we will need more than one switch box, depending on the capacity each box handles,” Saad wrote. “This is not saving (money).”
The cost of upgrading networks was a concern for users about five years ago, said Jay Krauser, general manager and senior technology strategies for communications technology at NEC Corp. of North America.
But concerns about cost are “starting to subside,” Krauser said, because the cost of switches with Gigabit ports and Power over Ethernet are dropping.
Irving, Tex.-based NEC’s products include Univerge Sphericall Enterprise Softswitch, a software package designed to provide voice and data communications. Krauser said Univerge Sphericall will work on servers made by manufacturers such as NEC, Dell or HP, but most organizations running software-based telecom systems are early adopters.
“The majority of the market today is more of a traditional appliance-based SIP-enabled products,” he said.
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