As Your PBX Reaches End-of-Life, Your Future is in the Clouds
In 2004, more than 90% of U.S. households had landlines; by 2024, that number had dwindled to less than 28%. The tipping point from wired to wireless can be traced back to the introduction of the Apple® iPhone® in 2007. By 2015, according to reporting from CNET, the writing was on the wall as smartphones were replacing clunky wireline telephones en masse. History is now repeating itself, this time in the enterprise space.
The Decline of the On-Premises PBX
Earlier this year, NEC announced it is exiting the on-premises phone business; no new orders will be accepted after December 31, 2024. NEC is not alone. Toshiba and Panasonic have also announced that they will be getting out of the enterprise PBX (Public Branch Exchange) business.
This is not to suggest that on-premises PBX systems will completely disappear anytime soon. According to research firm Metrigy, the on-premises PBX market is expected to grow in the coming years, with a 49.9% market share projected by 2033. However, the global market for PBXs has been declining since 2012, and is expected to continue to decline at an 8.8% compound annual growth rate (CAGR) from 2022 to 2027. As a result, many enterprise CIOs, CTOs and CEOs are actively looking for an alternative communications platform that can support their digital transformation and drive greater workplace collaboration and productivity. Many are turning to cloud-based phone systems.
Cloud-Based Phone Systems
A cloud-based phone system, sometimes referred to as a virtual PBX or hosted PBX, combines multiple communication tools into a single platform that is managed by a third-party provider. Highly efficient, flexible and cost-effective, a cloud phone system is a good alternative for a variety of business types and sizes, whether you have a handful of users in a single location or thousands of users across multiple locations.
With a cloud phone system, users make and receive calls over the internet using Voice over Internet Protocol (VoIP) technology instead of a landline network. Voice and even video traffic is carried over the internet to data centers in the cloud, then routed to the intended destination.
As a native digital technology, VoIP provides more communications and management options than traditional analog landlines. In addition to the typical functions of a PBX-based phone system, cloud phone systems enable users to make and receive calls from any internet-connected device, such as a computer, mobile device, or IP phone. Some offer advanced features like voice and keyword analysis, call center capabilities, and interactive voice response.
Sometimes marketed as Unified Communications-as-a-Service (UCaaS), cloud phone systems typically support integration with various business applications like Microsoft Outlook and Google Contacts. This enables employees to access and respond to emails, schedule appointments and add contact information over the phone. So, for example, a company could host and manage its various communication systems, customer relationship management (CRM) software and productivity software on one platform. This capability gives enterprise owners and managers a valuable tool as they continue to navigate the trend toward remote and hybrid work models.
As with many cloud services, one of the biggest benefits of cloud-based phone systems is the cost, which is comparatively lower than a traditional enterprise system. The cloud system’s all-digital framework replaces expensive and bulky hardware requiring regular maintenance with software and APIs that take up no space and can be automatically managed, configured, scaled and updated remotely. This also means that companies looking to add more locations do not have to pay for telephone line drops or equipment installation and provisioning, as cloud systems are relatively easy to set up and scale.
Unlike a traditional phone system that can involve multiple vendors, FCC taxes and charges for extra features, a cloud phone system consolidates all costs into one monthly fee, making it less expensive overall and easier to manage.
The cloud telephony services market is expected to grow at a CAGR of 9.7%, 2023 – 2033. During that time, global revenues are anticipated to more than double, increasing from 22.8 billion (US$) to 57.6 billion (US$). Source: Future Market Insights
Glo Fiber Business Hosted Voice
An example of a robust cloud phone system is the Hosted Voice solution from Glo Fiber Business. The easy-to-scale service, available in all Glo Fiber Business markets except Ohio, uses a secure, reliable cloud-based network on Glo Fiber Business’s infrastructure.
Hosted Voice works like a traditional PBX system, providing internal extension dialing as well as dial “9” access to the world. In addition, businesses can select from dozens of customizable features including remote worker mobility. The system supports number portability or Glo Fiber Business can provide new numbers as needed.
As a managed service, Glo Fiber Business provides the initial setup and configuration, data connection and IP phones. Customers pay a set monthly fee which improves cash flow and eliminates the high upfront costs of an on-premises PBX installation. Businesses can easily self-manage changes with an intuitive web portal.
The End of Your PBX, the Beginning of Your Cloud Future
The business case for a cloud system is strong and getting stronger. Research firm, Future Markets Insights, expects the sector to grow 9.7% (CAGR) from 2023 to 2033. During that time, global revenues are anticipated to more than double, increasing from 22.8 billion (US$) to 57.6 billion (US$).
Many C-level leaders, however, are taking a more cautious wait-and-see attitude. The hesitancy may be due to a number of factors including cost concerns, fear of change or lack of internal bandwidth. Perhaps the greatest underlying factor may be a lack of awareness. It is quite possible that, until the recent announcements from NEC, Panasonic and Toshiba, many were simply unaware of the accelerating trend toward cloud-based telephony.
As time goes by and more on-premises PBX systems are taken offline, CEOs, CTOs and CIOs will need to select a new, more future-ready communications platform. The answer may just be waiting in the clouds.
Learn more about the benefits of switching to Hosted Voice from Glo Fiber Business.