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John F. Malone

President and CEO

The Eastern Management Group, Inc.

jmalone@easternmanagement.com

+1 212 738 9402  Ext. 2201

 



PBX Market Unaffected by COVID


Enterprises scarfed up mobile, presence, video, and other UC applications to improve work-from-home (WFH) employee productivity during COVID.



COVID vanquished entire industries in 2020-2021 while handicapping others. However, what contributed to far lower unemployment than a worst-case scenario was unified communications. UC systems and applications turned work-from-home (WFH) and work-from-anywhere (WFA) into productive time - very valuable time. All in all, 2021 wasn’t a bad year for unified communications sales.
 
The Eastern Management Group report Unified Communications Market 2022-2027 examines where we stand today in terms of UC shipments and applications and what lies ahead. 
 
In any prior decade, the PBX (UC) industry would not have fared well against COVID. Yet more than 50 million employees benefited from a new phone system in 2021 for many reasons, including: 
1. A dozen productivity improvement features on new UC systems like mobility and video kept vendors selling and customers humming as employees could now work-from-anywhere 
2. For as little as $20 a month, an employee could benefit from a new unified communications cloud phone system capable of driving a 50% increase in productivity, according to Eastern Management Group research
3. Premises PBX street prices fell, helping to bolster sales


The Bottom Line
 
2021 wasn’t a bad year for unified communications sales.
 
The PBX industry slowed but performed well overall 
Cloud (UCaaS) systems were a third of all new PBX sales 
Premises PBX system sales declined less than expected and accounted for 40% of all shipments 
Hybrid PBX and virtualized PBX platforms showed resiliency with a combined 25% PBX market share
 
 
Manufacturers and dealers selling cloud and premises PBXs found a ready market for their UC throughout COVID. RingCentral, for instance, reported 36% revenue growth in the company's recent 10Q. 8x8 fiscal 2021 revenue jumped 19%. Eastern Management Group wasas also been impressed by some stalwart premises PBX providers like ALE and Cisco.
 
 
Don't Forget Replacement Cycle 
 
There are eight-to-nine-year PBX replacement cycles. Systems break, companies move, things like that. So, while COVID drove many PBX replacements, additional thrust came from replacement cycles.  
 
 
Where to from Here 
 
Employees are returning to the office. The U.S. Bureau of Labor Statistics reports 13% teleworked or worked from home in August 2021, reducing from 35% in May 2020. 
 
UC tools available to employees are well suited to work-from-anywhere.
 
Here's where I'd place my bets for the future:
 
Video - We would be mired in unemployment without user-friendly video from Zoom and others. Hybrid work assures a future. 
 
Contact center - This UC application works wonders. Agents can remain home. Back at the office, they continue to perform. Strong demand will continue.
 
Mobile - Research in our new report shows 93% of IT managers say mobile is important to their business.
 
SIP - This connective tissue is growing by leaps and bounds. SIP trunking is the explanation behind successful UC and work-from-anywhere.   
 
Presence - Post COVID, IT managers must expect employees to work-from-home. Presence does away with telephone tag and other inconveniences. Our research shows 88% of IT managers want presence in their company. 
 
 
One may expect continued PBX growth throughout the decade, according to Eastern Management Group analysts. New PBX sales should well surpass 50 million seat/line licenses every year. No matter the phone system platform, there's not a bad PBX market to be in today.
 
Research is based on Eastern Management Group's report "Unified Communications Market 2022-2027."
 
This article appeared in No Jitter.
 



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