Maybe Legacy Voice Is Not a Bad Solution for Many Businesses

Though I have to admit I do not follow the unified communications market anymore, one fact about the market that has puzzled me for two decades is why smaller businesses and organizations have not adopted at a far-higher rate.

I understand why the economics of switch and server ownership continue to make sense for larger enterprises. Any product sold as a subscription, by the unit, will tend to have tougher economics for buyers as the number of subscriptions purchased climbs, and when known “own your switch or server” alternatives exist.

Most of us can cite at least some reasons why an IP-based solution of any sort (premises switch or hosted service) has feature advantages over a legacy TDM (time division multiplex) phone system.


An annual survey of small and mid-sized businesses conducted for Edgewater Networks of North American organizations seems to suggest that a majority of SMBs of all sizes still rely on TDM solutions for voice.

There is no methodology information provided, so I cannot tell whether the sample was of entities believed not to buy hosted PBX (substitutes for a premises private branch exchange or phone system) services or a sample of entities with a potential mix of buying behaviors. We can easily conclude the survey was not of hosted IP service buyers, since the “IP” adoption rate would then be 100 percent.

The most-logical assumption is that the survey was aimed at firms believed not to be buying hosted IP PBX services (we can use the term “unified communications” interchangeably since all hosted IP solutions include UC features).

About two percent of respondents in the very-small business category (20 or fewer) report buying a hosted solution, while some 11 percent report using an IP PBX. But 40 percent report using key systems that always have been aimed at this market segment, while 22 percent report using TDM-based PBX systems.

After two decades of sales evangelism, that seems a bit of a shock. Most firms have not migrated to hosted or IP premises solutions over the last couple of decades. There are, of course, business reasons for those choices. Many small businesses have single-line phone service, where spending on a phone system of any type does not make sense.


The other noteworthy observation is that so many respondents in the very-small category (20 employees or fewer) seem to get by using mobile phones as the “primary” communications device.

In many ways, a smartphone now offers many attributes of “unified communications,” such as a single device that handles conferencing, voice mail, messaging and email. That is a new possibility not generally available two or three decades ago.

So in the very-small business segment of the market, mobile substitution for fixed line servcies seems to operate, as it has in the consumer market.

Larger organizations (100 employees or more) have higher rates of use of hosted PBX services and IP PBXes, as you might expect. But even there, just eight percent of survey respondents in the “100 or more employees” category report buying hosted PBX services.

That is far lower than I would have anticipated, especially after 20 years of sales activity.

If you ask me to explain what I would consider a painfully-slow rate of adoption, it would be that IP voice and unified communications are deemed to provide relatively-low business value, compared to legacy solutions, especially when mobility serves some of those same needs.

The analogy is the relative business upside of modern voice or UC, compared to websites, e-commerce or mobile communications (voice, text messaging, social media and app and web support and email). Businesses still need voice communications, of course.

It is just that the perceived business value for upgrading from legacy solutions arguably is not as high as spending money on other tools.

I cannot explain what I consider slow uptake in any other way.

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