Is Microsoft out to kill the dedicated PBX?

In the wake of the official release of Microsoft's Office Communications Server (OCS) 2007, people are asking whether stand-alone PBX systems are doomed to go the way of the dinosaur as businesses rush to move their PBX functionality to Microsoft servers. Is there perhaps just a bit of overreaction going on?

In the wake of the official release of Microsoft's Office Communications Server (OCS) 2007, the cornerstone of its Unified Communications (UC) Launch earlier this month, I've seen the "Death of the PBX" headline several times. People are asking whether stand-alone PBX systems are doomed to go the way of the dinosaur as businesses rush to move their PBX functionality to Microsoft servers. Is there perhaps just a bit of overreaction going on?Let's look at how OCS 2007 and its related UC products work. Are they really poised to replace the venerable PBX for routing and managing calls within every organization?

What will it take to kill the PBX?

Now, there seems to be little doubt that Microsoft hopes OCS 2007 will take the place of the PBX in many businesses; quotes from Bill Gates make it pretty clear. It's also true that Microsoft has been able to take over a number of markets; after all, the company came from behind to make Word the most popular word processing program, Internet Explorer the most popular browser -- you know the drill by now.

However, it's also worth nothing that, in most cases, Microsoft didn't "kill" the former frontrunner as much as greatly reduce its market share. WordPerfect, once the top word processing program, is still around although it's gone through a number of ownership changes. Netscape still exists, even though you'd never know it based on most browser surveys.

I'm guessing the stand-alone PBX isn't going to go away completely, either -- at least not anytime soon. Here's why:

  • Cost/licensing factors: Licensed under a Client Access License (CAL) model, OCS 2007 requires a CAL for every user or device that accesses the OCS server. Not only does that get expensive, it's also more difficult to manage.
  • Ease of use: Dedicated PBX systems are generally turn-key systems that are relatively easy to deploy and use. IP PBX systems that run on regular server operating systems (such as Asterisk) require more of a learning curve.

In order to kill the dedicated PBX, it's likely that a product will need to provide a big cost advantage and/or offer superior ease of deployment and use. Just one of these factors alone may not be enough. Despite being free, open source software Asterisk hasn't "killed" the dedicated PBX.

Microsoft Unified Communications with OCS: The SuperPBX?

By design, OCS provides SIP-based VoIP call management like an IP PBX, but it goes way beyond that. It also provides audio and video conferencing that can, for many businesses, take the place of the uber-expensive solutions from Cisco, HP, Teliris, and Polycom.

But that's not all. OCS integrates with Microsoft Office applications so you can, for instance, make a phone call by clicking one of your Contacts in Outlook. There's also a Mobile client so you can access your communications options from your PDA phone, and there's a browser client so you can do so from public computers that don't have Office installed.

For users, it all sounds great. Perhaps the question is: Will OCS/UC simplify your (the IT administrator's) life or make it more complicated? Microsoft boasts that it provides a single point of administration and configuration, which can be both a good thing and a bad thing.

Does all this convergence remove workers from their core competencies (once upon a time, the "phone people" managed the PBX and the "IT people" managed the computer network and never the twain shall meet)? Will it force already overburdened IT personnel to take on even more responsibilities?

And what about the effect on reliability, security, and other important issues? A single point of administration also translates to a single point of failure. If your network goes down, now you won't just lose some forms of communications -- you could lose them all.

This is a main drawback of VoIP in general; a network outage takes out phone service along with e-mail and instant messaging. Of course, the ubiquity of mobile phones in today's society provides some backup to ameliorate this problem, but companies can't expect workers to use their own personal cell phones to conduct business in prolonged outages.

Why the PBX will survive -- in some form

These concerns are one reason the dedicated PBX is likely to survive for a while, but there's little question that OCS 2007 and similar solutions will gradually eat away at its market share. Large businesses can afford the overt and hidden costs, including personnel costs, failover, etc. Midsize businesses -- particularly those at the low end of "midsize" -- might be more apt to stick with their dedicated PBX equipment and continue to compartmentalize phone and IT services separately.

This is not to say that PBX service itself will remain as it is today. Just as it has evolved from plug-in switchboards to more sophisticated operator-controlled systems to automated systems to IP systems, the services will continue to evolve. Many companies today have done away with the necessity of managing their PBX systems entirely and are using hosted IP PBX systems such as those offered by AT&T, Verizon, and many others.

In fact, it may be the off-site hosting services, rather than a software product such as OCS 2007, that finally hastens the end of the on-premises PBX. And with Microsoft's push toward Software As A Service (SAAS), its own Unified Communications products may end up as the foundation of hosted services rather than in-house solutions for all but the largest companies.

Deb Shinder is a technology consultant, trainer, and writer who has authored a number of books on computer operating systems, networking, and security. She currently specializes in security issues and Microsoft products, and she has received Microsoft's Most Valuable Professional (MVP) status in Windows Server Security.

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