September 2000

BY JIM MACHI

So what's the big deal about the IP-PBX? Because of these figures, some believe the only big deal is big hype. I disagree. I say the buzz is justified, since the big deal is the potential that comes with being a disruptive technology. Consider an example. A hundred years ago, some viewed the car as a kind of toy. But visionaries knew it was disruptive technology. The visionaries were right. Today, horse-drawn carriages are an oddity seen only in Amish country or as a tourist ride in Central Park. The car, on the other hand, realized its potential -- transforming the American landscape, building an industry, and creating some of the largest companies in the world.

To me, the IP-PBX press coverage seems second only to softswitch coverage. Why so much coverage of something that makes up only a small part of convergence and the entire telecom industry? In my view, it's because the IP-PBX is a tangible result of the convergence of voice and data. A tradeshow attendee or telecom user can call over an IP phone and see and touch the IP-PBX. It's there now. In today's typical IP telephony phone call, the last mile is still over standard infrastructure. The only thing many people may remember about an IP telephony phone call is that it may not have sounded like a "normal" phone call. Exactly how or why it becomes an IP or Internet phone call -- even for a "Curious George" -- is hard to understand unless you're a wonk who reads INTERNET TELEPHONY� magazine or understand gateways and next-gen networks.

What's so disruptive about an IP-PBX? First, we have the promise of a converged communications server and less expensive phones that connect to it. A converged communications server -- handling PBX functions, remote access, data routing, and unified messaging -- would truly revolutionize the CPE environment. Today, a typical company's back office houses myriad equipment performing these tasks, all cobbled together and mostly from different vendors with different administration techniques.

IT staff loves the idea of a single network, less equipment, and especially easier integration. On a converged network, IT technicians could be trained to administer and debug both the voice and data network at the same time, since it's one network using the same infrastructure, allowing additional time to solve more problems. This could result in happier, more flexible, more efficient, and possibly even a smaller IT staff -- though I won't comment on whether "happier staff" and "smaller staff" actually do belong in the same sentence.

Phones connected to a typical PBX are a great source of revenue for PBX manufacturers -- and that means they are an expense to be reckoned with for your budget. Closed systems mean you can only use one manufacturer's phone set. And you pay more for a speakerphone, display phone, conferencing ability, or other extras. That's just the way it is.

With an IP-PBX, the phones would use standards like H.323, SIP, or Megaco. That makes it very likely that you would be able to use phones from sources other than the PBX manufacturer. More choices mean more competition and lower prices -- we all learned that in Economics 101. While a PBX manufacturer could put proprietary protocols into the open standards to create a closed system, the proliferation of truly open systems would let competition dictate the winners and losers in the marketplace. There's ample precedent. In the PC computer era, the open systems model has already spoken loud and clear.

We're also seeing the promise of a single line carrying both phone calls and computer data. Today this model is not a given, since IP-PBX installations can still choose to install two separate lines -- either to ensure quality of service or because, in some cases, installing two separate 100 Base-T Ethernet lines may be cheaper than installing a single higher-bandwidth line. To me, using the single-line argument to support the IP-PBX doesn't make much sense right now, since it's easy to refute.

But the single, converged communications server does make sense. Combining an IP-PBX with routing and CTI application capability -- elements of which you'll see on the demonstration floor at INTERNET TELEPHONY CONFERENCE AND EXPO� -- both simplifies the back office and reduces cost -- from both an equipment perspective and integration perspective. This makes the disruption wave larger and louder.

By the way, those analyst reports at the very beginning of this article -- the ones with the miniscule IP-PBX take rates -- were written by smart people. And within a few years, they show the IP-PBX making much more than a dent in the PBX market. 

Jim Machi is director, product management, CT Server and IPT Products, for Dialogic Corporation (an Intel company). Dialogic is a leading manufacturer of high-performance, standards-based computer telephony components. Dialogic products are used in fax, data, voice recognition, speech synthesis, and call center management CT applications. 

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