Future of the Phone? Future of the PBX...Future of the Phone? Future of the PBX...

Things are changing at both ends of the line.

I bumped into Brent Kelly of Wainhouse Research in the press/blogger/analyst room here at Lotusphere (between us, we have all those job descriptions covered). So I asked him about the pretty remarkable report that Wainhouse just released, in which they predict strong gains for the Unified Communications market, despite Wainhouse's projection of an actual decrease in CPE revenues.We didn't have time for a lengthy discussion of the report, but Brent made one point that I think is irrefutable: Revenues from sales of desktop hard phones are likely to decline from here on out, and if this is at all a substantial trend in the next few years, that would represent a serious hit to CPE revenues. Depending on who you talk to, phones are 1/3 to 1/2 of the cost of a new procurement.

Many of us in the industry have been saying this over and over about phones, and I think most of us believe it, but the fact that this is becoming accepted wisdom almost makes us underestimate the impact this is going to have, which is why Wainhouse's projections seemed jarring at first.

Here at Lotusphere, I was talking to a representative of a company that makes phones and call control systems, and he recalled being at an industry event a couple of years ago where the phone prediction was made in the context of the types of endpoints that younger workers use. He said he didn't believe it when the speaker said you've probably bought your last generation of hard phones--but now he does believe it.

And this is only really half of the story. Frankly, I don't envy Brent and his ilk in the analyst world, trying to figure out what's going to happen in this market over the next couple of years. But they've got it easy compared to the vendors, who are seriously getting disrupted (a cliche word, but it fits here). It's really both ends of the connection that are up for grabs. Not only can they not rely on the same level of phone sales, but call control itself as the revenue driver for enterprise communications is imperiled.

That's a point that came up in conversations I had with several analysts here at Lotusphere, and one that today's Avaya announcement only reinforces. Avaya's big bet isn't on those products that we used to call PBXs, or any PBX peripheral, or any product they acquired with Nortel. It's on Aura, which layers above the PBX--anybody's PBX. It's on the idea of session control, not call control.

How does Avaya--or Cisco, or anyone else that's in the business--win in this new environment? I think I might have heard the answer from Jim Burton of UCStrategies.com, though he was responding to a somewhat different point.

I was chatting with Jim about the kinds of click-to-call demos we were seeing at Lotusphere. I was picking on Sametime/SUT, but it's really no different with most any other vendor in this space. I was talking about the wonder with which enterprise voice guys describe the way you can do stuff that my 10-year-old daughter does routinely on Skype. Why, I asked Jim, will people like my daughter even bother with these heavy-duty enterprise communications interfaces in a world where people are used to downloading Skype and being set to go?

Jim ticked off a few words that I admit I'd been giving short shrift to: Reliability. Security. Scalability. Quality.

That's what Avaya, Siemens and the like bring to the table. It's what Cisco had to bring before they could be accepted, and it's what Microsoft will have to bring if they're going to succeed. It's not a leap to think that enterprises will give up their hard phones and will move from a PBX-centric environment, but it is a leap--at least it seems to be--to think those business imperatives will go away.

Presumably, that's where the voice vendors will have to look to find their new revenues to replace the phones and such.Things are changing at both ends of the line.