2021-2027 PBX Sales Expected to Be Strong

By John Malone, CEO & President  |  October 14, 2021

Bold purchasing by IT managers averted a COVID cataclysm.

A new PBX market research report by the Eastern Management (News - Alert) Group states that 55 million workers got a new phone system in 2021. PBX sales have been strong for UCaaS and on-premises PBX, hybrid cloud, and virtualized systems and, despite COVID-19 vagaries, the 2022-2027 forecast is bullish.

2021 Market Ups and Downs

Unfortunately, several vertical industries fared poorly due to COVID-19. Among those losing PBX (News - Alert) market share from 2020 to 2021 were retail (down 56%), the federal government (down 62%), education (down 22%), and construction and engineering (down 36%).

Worldwide, some geographies forfeited share, including Eastern Europe, Middle-East and Africa (MEA), Latin America (LATAM), and Asia Pacific (APAC); their 2021 collective market share fell by almost a third. 

Much Good News

2021 the finds good news on several fronts, according to Eastern Management Group research. Some industries gaining UC market share include package goods (up 70%), healthcare (up 37%), and professional services (up 40%).

Around the world, the US PBX market share has grown by 27% in 2021. Western Europe increased its share by 7%, and Canada remained unchanged.

All PBX platforms turned in surprisingly good results this year:

  • On-premises PBX system sales declined less than expected, accounting for 40% of all shipments;
  • Hybrid PBX and virtualized PBX show resiliency with a 25% combined overall PBX market share; and
  • Cloud (UCaaS) systems represent a third of all new PBX sales

Many manufacturers and dealers selling cloud and on-premises PBXs have found a ready market for UC throughout the COVID-19 pandemic. RingCentral (News - Alert), for instance, reported 36% revenue growth in its recent 10Q report. 8x8 fiscal 2021 revenue jumped 19%. The Eastern Management Group is impressed with on-premises PBX shipments from stalwart providers like Alcatel-Lucent (News - Alert) Enterprise and Cisco.

Bold Purchases Avert COVID-19 Cataclysm

COVID-19 drove information technology behavior to favorable outcomes. IT managers quickly turned up UC applications and systems to improve employee productivity. By May 2020, the US Bureau of Labor Statistics reported 35% of all workers were productively teleworking from home.

Strong demand for UC is continuing. Sales of video, mobility, presence, contact center, and SIP trunking have never been greater. Since the beginning of COVID-19, the percentage of companies using video has increased by 25%. Businesses using SIP, the connective tissue, jumped from 79% to 82%.

More big news is increased PBX turnover in 2021. Just as automobile companies use a pull-forward marketing technique to transition customers out of one leased car before its expiration and quickly into another, IT managers appear to have done something similar this year. An Eastern Management Group study of 400 customers that bought a PBX during COVID-19 found 23% did so to support work-from-home/anywhere.         

Lessons Learned

While all but 13% of employees who worked from home due to the pandemic are now back in the office (according to the Bureau of Labor Statistics), future catastrophes are inevitable; I would go as far as to say imminent. Here are three takeaways from the COVID-19 experience while preparing for the next one:

  1. Employees must be equipped in advance to work-from-anywhere (WFA).
  2. Collaboration tools like video, messaging, presence, and contact center should be part of the perpetual rhythm of b2b and b2c communications.
  3. PBX replacement cycles need to be advanced from the current 8-9 years down to 5-6 years to assure fail-safe business operations and a rollout of the newest UC applications.

Final Thoughts

COVID-19 set the table for long-term UC benefits. In my opinion, it is a meaningful legacy. Now manufacturers and IT managers have a north star to guide unified communications and application development and deployment in anticipation of future tumultuous times.

For information about the Eastern Management Group report "Worldwide Hosted and Premises PBX Market 2021-2027 and Managed Services," contact John Malone (News - Alert) directly at 212-738-9402 Ext. 2201 or jmalone at easternmanagement.com.   

Edited by Erik Linask