Enterprise VoIP's Y2K connection

A growing segment of the voice-over-IP market in the next few years may come from enterprises seeking to replace outdated TDM-based PBX systems installed or updated for the Y2K bug in the late 1990s.

Traditional PBX systems typically have a useful life of around eight to 10 years. Depending on when older systems were installed, the time may be right for companies looking at replacement solutions to invest in an IP PBX.

“The investments that [enterprises] did for their Y2K protection have now been amortized, so they now have more discretionary funds available to start exploring IP telephony, whereas before they were still paying off those debts,” said Nora Freedman, IDC analyst for the enterprise networks group.

Richard Zimmermann, vice president of network and security solutions for Forsythe Solutions Group, an IT consulting and solutions fulfillment company, said he sees Y2K-era replacement as a growing trend in the coming years as traditional analog PBX equipment reaches a natural decline.

“It's creating kind of a natural decision point for customers: ‘Do I renew that lease or do I replace the system?’” he said. “[Another] thing that's influencing purchasing decisions is the obsolescence of the underlying data infrastructure.”

In general, Zimmermann said, his customers are doing pilots before they go to a larger-scale deployment across the enterprise or they may deploy an IP PBX at their main office and then gradually add remote sites.

Many companies that are still depreciating their systems deploy a hybrid solution, combining the old system and new IP technology, said William Stofega, IDC research manager for VoIP services.

“It can get them to a place where they can at least get the best usage out of their current base of equipment and also be able to get the best of both worlds while not committing to anything new until they're ready,” he said.

However, despite the IP push, VoIP is a new technology, and it's not going to transform existing enterprise telephony overnight. Zeus Kerravala, Yankee Group vice president of enterprise infrastructure, said the Y2K replacement factor is likely to be a one factor, but it won't be the main source of any significant migration to enterprise IP in the coming years.

“A lot of the drivers have been around administrative cost savings, long-distance savings — more on total cost of ownership things,” Kerravala said. “I think we're starting to see the transition more into ROI type things — ways to improve productivity, collaboration suites, even things like unified messaging. It's always a factor, but it creates slow, steady adoption more than any kind of big hockey stick curve.”