In today’s marketplace, there are several types of premise-based business telephone solution providers. While every phone system creator has a unique offering, it is easy to categorize the providers into groups. Suppliers neatly fall into one of five broad classifications, and this grouping allows the phone system buyer to narrow their choices by determining which category fits them best and then explore the providers in that group. It’s a classic approach to narrowing a buyer’s choices and saving valuable time for both the buyer and the reseller. Lastly, it can help avoid making the wrong choices on a long-lived asset and critical business application, the corporate phone system.
Legacy Business Phone Systems
Toshiba, Panasonic, and NEC comprise this category. These companies have been in the corporate phone system business for decades. They are all Japanese-based conglomerates and provide telephone systems as a small part of their broad business product lines. These companies are so tightly wedded to their legacy past that they do not lead, but rather follow the market. In fact, Toshiba publicly states that they purposefully incorporate new technologies slowly, arguing that new is less reliable than old technology. Their resellers typically adhere to this same strategy.
The result of their approach to technology is that Toshiba, Panasonic and NEC telephone systems are rock solid and reliable. Since they don’t change often, they don’t break often. The price of these systems is inexpensive to moderate. You’ll typically find that these systems are most popular in smaller markets.
Legacy VoIP Business Phone Systems
Mitel, Cisco, Avaya, and ShoreTel are in this camp. The reason for labeling them legacy is that although they work on IP networks, they each still utilize proprietary technologies. Their products are highly developed over many years with millions of development dollars spent on creating polished, elegant systems. These companies also have highly evolved reseller networks and support mechanisms. These are typically the phone system of choice for large enterprises.
On the downside, legacy IP phone systems have pricing models that rely heavily on complex licensing schemes. For larger and more complex situations, they will be delivering a server farm (although some of the servers are now virtualized). This is the high-cost route – expensive to purchase and maintain. Most of these providers also require that the customer has a support plan in place for the life of the system.
Mitel and ShoreTel are making efforts to be more open and both can work with SIP phones and SIP Trunking (additional licensing required), but under the hood, they are still proprietary old-style technologies. In 2013, Cisco effectively pulled out of the small business telephone system business. Read More.
It is widely believed that there will be a consolidation within this group. In the Fall of 2014, Mitel made an aborted bid for ShoreTel and most business analysts believe that more acquisitions may be attempted. Buyer’s should know that the acquired company will probably have its products discontinued over time, leaving the owner at a dead end.
SIP-Based Business Phone Systems
First, by way of explanation, SIP is the acronym for the VoIP technology standard of Session Initiated Protocol. Over the next few years, the entire telecommunications industry will have converted to this standard.
Digium Switchvox is the sole member of this category. Digium has taken their Asterisk open source PBX softwareand built a commercial PBX on top of it. They walled off command line software access and replaced it with a refined and easy-to-use graphical user interface (GUI). The system, being based on Asterisk, is native SIP technology so no expensive gateways or messy PSTN, proprietary technology, or SIP translations needed.
Switchvox is the pure player on VoIP phone systems. Digium will support any SIP phone on the market, but Digium does require a subscription for each user. Being based on open source, there are no other licenses involved. Switchvox straddles the comfortable middle, with a cost higher than the DIY and specialty providers, but much less money than the legacy PBX providers. Digium has an established reseller network and is financially sound.
Specialty Business Phone Systems
This is a category of providers with little brand recognition and very small market share. Cudatel, Fortivoice, Allworx, Altigen, and Zultys are the players in this group. The category can further be further divided into two sub-groups:
- Experimental offshoots by data product manufacturers testing the PBX waters (Cudatel and Fortivoice)
- Stand-alone small PBX makers who have little market share and questionable financial stability, but clever products (Allworx, Altigen and Zultys)
These providers are the low price leaders that come with a tenuous future. Will they be around for the long run? It’s a risky business decision, but then again every company started small, didn’t they? Much like the legacy phone system group, you see these brands more often in smaller markets and sold by smaller resellers.
Do It Yourself (DIY) Phone Systems
This is the category into which Elastix, Trixbox, and FreePBX fall. A buyer can download free open source Digium Asterisk software, buy a server, and build their own business phone system. There is no cheaper way to go than a DIY business phone system option.
Since Asterisk is based upon the common standard of SIP (Session Initiated Protocol), buyers can choose from any of several different SIP telephone manufacturers. It’s not like the old days where you had to purchase the same brand phone as the PBX you purchased. And the buyer can choose from any SIP Trunking provider to get their monthly phone service.
The caveat on DIY is that you need to know Linux and Asterisk, as well as you are going to become your own telephone company. You will need to purchase telephone support or rely on online forums and other knowledge sources. You’ll have no one to call for on-premise support as there is no such a thing as an Asterisk reseller (there is no money in supporting free software). However, DIY phone systems can work well for companies who have staff who know open source telephony and Asterisk. For others, it can be an ill-guided attempt to save money on a crucial business service. The buyer needs to know that they will become their own phone company.