Hybrid telephony leads the way in voice and data

The recent CRN Comms Channel Expo Foundation revealed which solution is holding sway in the market.

Hybrid PBXs are currently leading the voice and data market, according to distribution research specialist Canalys. The firm has been examining the dynamics of product development and routes to market for voice and data solutions.

At CRN's Comms Channel Expo Foundation debate, senior analyst Sandy Fitzpatrick explained the company's market analysis. She identified three basic categories of products in the voice and data market: voice PBXs, hybrid PBXs and pure IP. At the moment the hybrid solution is holding sway.

It is the telephony vendors that are really gaining ground in this space, Fitzpatrick said. With a hybrid solution, customers can benefit from full PBX functionality at their office and then eliminate call costs between different branches through a voice over IP gateway, Fitzpatrick told the Foundation.

Using a hybrid, customers can protect their existing PBX investments while benefiting from lower call costs - the essential argument for IP telephony in the first place. A key cost in phone systems is that of handsets. Customers can see the cost benefit of hanging onto at least some of their existing handsets.

According to Canalys, hybrid solutions have about 54 per cent of the market today, voice PBX 42 per cent and pure IP just four per cent, with Nortel and Avaya dominating both the larger, more traditional areas of the market and Cisco and 3Com leading the way in pure IP at present.

Fitzpatrick said it has proved to be very difficult to convert the traditional installed base to IP. PBX life cycles can be up to 10 years, so new technologies have to wait their turn. On top of this, telephony solutions tend to be proprietary, tying customers in to the vendor.

These factors are inhibiting the move towards pure IP-based solutions, as are the continuing concerns over the reliability required for telephony solutions. Buyers of voice technology are much more conservative, said Fitzpatrick.

Also, all businesses, whatever their size, need a telephone system, and many of these businesses don't have a local area network (Lan), or if they do it is of a low specification. Yet smaller businesses make decisions faster and Canalys thinks the SME market may hold bigger potential for pure IP sales.

This theory is backed up by the relative success enjoyed by pure IP telephony vendors such as 3Com and Mitel, which both target SMEs. Ericsson has also seen a degree of success with its BusinessPhone range, a pure IP system sold through resellers and targeted at the SME market.

However, some resellers have complained that BusinessPhone is becoming commoditised, Canalys found.

"We found it quite surprising that the pure IP solutions were being targeted at the corporate market first and not at the sub-100 [employee] and sub-50 type businesses, which is where most of the market is today," Fitzpatrick said.

The keys to success for IP telephony:

• The voice channel is almost completely separated from the data channels.
• The growth of broadband will boost IP telephony uptake as corporate companies recognise the value of using IP-based telephony for remote connectivity through virtual private network connections.
• The industry needs to avoid over-hyping IP telephony. The transition will happen over a decade, not 12 months.
• Voice channels lack data skills but they are becoming experts at selling against IP telephony.
• IP telephony solutions still need to prove they are robust and scalable.
• IP handsets are still considered too expensive and too ugly.

The largest barrier is probably the high bandwidth requirements of voice applications. They require at least 100MB switched networks with in-line power, which means that for most companies IP telephony would require a complete Lan upgrade.

This is great news for networking vendors and resellers but it does put a brake on the adoption of IP telephony.