Phones connected to corporate IP networks, known as hard phones, faced demise long before COVID-19; mobile phones, desktops and tablets jeopardized the technology's existence.
Before the pandemic placed most knowledge workers at home, armed with PC- or USB-based softphones, hard phones defined an employee's workstation and corporate identity. Every worker, every desk, had a corresponding phone number. Now employees use internet-based virtual meetings sent via links.
The traditional desk phone isn't an artifact yet, even as employees untether from desktop hardware.
"I've had some enterprises with phones on desks just for 911 purposes," said John Lamarque, VP & GM of Poly's voice collaboration business unit. Turning on the PC would take too long in an emergency.
Reliability is why hard phones and traditional telephony remain in the enterprise.
There has always been discussion about whether or not classic private branch exchange (PBX) is dead because of all the capabilities unified communications as a service (UCaaS) offers, said Ken Presti, VP of research and analytics at AVANT Communications. PBX is not dead yet, even if some say the private telephone network at least has a "fork in it."
"Once one vendor comes up with something new and cool, competitors are going to jump in and be able to replicate that within the next one or two quarters."
Ken Presti
VP of research and analytics at AVANT Communications
But companies are introducing upgrades from PBX. "Once one vendor comes up with something new and cool, competitors are going to jump in and be able to replicate that within the next one or two quarters," said Presti.
With the pandemic, vendors are exploring how they can change a phone's interface for their customers. The question has become, what kind of devices "deserve a spot" on someone's desk at home, said Lamarque.
UC of today
In the 1990s, Voice over Internet Protocol's (VoIP) main goal of running voice over network lines was to save money on telephony charges. The evolution of VoIP brought other means of communication into a unified platform, including email.
"The old adage was that voice would run free across the network, like any other application. The issue with that, even back then, is that telephony adheres to an objective of five nines of uptime," said Presti. "So in other words, your telephone system needs to be up 99.999% of the time."
But enterprise networks weren't five nines reliable, so there was still a need for corporate enterprise phone systems.
Today UC includes calling, video meeting and messaging, and can support application-integrations. On-premise UC investments have subsided in favor of UCaaS. UCaaS allows "per-user-per-month pricing, and elasticity to dynamically add and subtract users," according to Gartner.
"The lines have always been blurry between discrete services" for UC and meeting solutions.
Mike Fasciani
Senior research director at Gartner
Hard phones are purchased separately from the software that drives them. By 2023, Gartner expects 40% of new enterprise telephony purchases will be Microsoft Office 365 or Google G Suite.
But with UC stretching across messaging and calling, "the lines have always been blurry between discrete services" for UC and meeting solutions, said Mike Fasciani, senior research director at Gartner.
Enterprises can choose from:
- Cisco Call Manager paired with Jabber or Webex
- Microsoft Teams
- Avaya's UC stack, "which brought all of this together traditionally," said Fasciani.
Microsoft, RingCentral, Cisco and 8x8 are leaders in Garnter's UCaaS Magic Quadrant, while Google, Mitel and LogMeIn are challengers. Smaller businesses tend to lean on RingCentral and 8x8, whereas enterprise users rely on Microsoft for messaging, Cisco for calling, and Zoom for video, according to Fasciani.
What's in a persona
Microsoft and Cisco overlap in today's meeting solutions, but the market also includes Zoom and BlueJeans, but they stop short of personal phone numbers.
When Art Schoeller, VP and principal analyst at Forrester, worked for Microsoft as a UC specialist in 2006, developers were already considering corporate life without phones or phone numbers, much to his surprise. But enterprises were moving toward PCs, dialing into conferences on on-net calls, instead of off-net calls.
On-net allows for calls inside the corporate network, remaining within the public switched telephone network (PSTN). Platforms such as Google Meet provide PSTN access for outside meeting participants, so PSTN (and phone numbers) are still needed.
As the world moves toward complete VoIP, email addresses will become pseudo phone numbers, though that runs into issues with places still reliant on landlines.
Mobile service providers are eyeing the work-from-home market where users can forgo wire tethers and "drop a 4G dongle onto the back of a USB stick" in a phone to enable mobile connectivity on the desktop, said Lamarque. USB phones don't rely on VoIP, they just provide the interface for computer running the VoIP.
Customers want the capabilities of these SaaS platforms without having to acquire new hardware, though considering what interface is best for employees matters too.
"Pre-pandemic, [UC vendors] were still selling a lot of hard phones," because there's a certain set of users that like them as is, said Schoeller. Poly is the "usual vendor of choice for a UC" for selling hard phones.
Most UCaaS vendors, with the exception of Cisco, don't make their own phones. Right now, "Poly is just taking it in the shorts in terms of selling room systems and hard phones, but they can't make headsets fast enough," said Schoeller.
Poly stated Q1 2021, ending June 27, 2020, had "continued strong demand" for remote working solutions, "primarily" in headsets. The company brought in $104 million in non-GAAP revenue for voice solutions in Q1 2020, compared to $51 million in Q1 2021. Enterprise headsets led non-GAAP revenue in Q1 2021 compared to Poly's other solutions.
Softphones and beyond
The everyday employee likes the familiarity and reliability of hard phones, but they use all the app integrations they get in softphones, said Schoeller. The USB phone provides users familiarity with its traditional phone interface, "but it's not actually a full-fledged phone."
Until a full transition from on-premise PBX to UCaaS is complete, vendors will support customers' PBX needs. There are UCaaS providers that give "you your carrier connections and your phone numbers and all that happy stuff," said Schoeller.
"We have not killed the systems."
Art Schoeller
VP and principal analyst at Forrester
Though meeting solutions providers are offering updated hardware to supplement their services, they have to maintain a lifeline to customers relying on classic telephony networks.
"Microsoft has finally acquired a base of customers, some above 10,000 users, deploying Teams as their PBX," according to Gartner. Of those larger corporations, 80%-90% of their users rely on Teams for telephony capabilities, while the rest use a PBX because the platform lacks APIs for contact center, CRM and attendant console integration.
Companies are starting to rely on Teams "across all three pillars" of UC, said Fasciani. Businesses are re-evaluating enterprise voice options, and "prioritizing collaboration applications over dial-tone services."
But companies cannot entirely rid themselves of the PSTN, used for widespread wired or wireless phone calls. Remote just means companies have extended the endpoints of these systems.
"We have not killed the systems," said Schoeller.
