ENTERPRISE PBX: From Circuit to Packet Switch

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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


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




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


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

call forwarding.


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


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.





general manager, marketing, Siemens

Mathew Varghese, principal consultant, enterprise voice technologies, Cisco Systems India


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.


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


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


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



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.