Surrendering the Phones to NT

The San Jose, Calif., office of Techmar Communications Inc. took the new telephony plunge, scrapping its private branch exchange (PBX) and associated computer telephony integration equipment for a LAN-based system that runs on a Windows NT server.

The San Jose, Calif., office of Techmar Communications Inc. took the new telephony plunge, scrapping its private branch exchange (PBX) and associated computer telephony integration equipment for a LAN-based system that runs on a Windows NT server.

It was a risky decision for a call-center office that requires reliability from its 60-plus telephones. A move from Palo Alto, Calif., prompted the office to install Enterprise Interaction Center (EIC), a computer telephony product from Interactive Intelligence (Indianapolis,, in the new San Jose location without the company's old system in place as a fallback, and without having tested the new product a department at a time.

"We got lucky," says Ryan Nowacki, IT manager for the San Jose Techmar office, of the out-of-the-box installation in May. "We’ve taken 100 percent of our calls. It’s never been down during business hours."

Techmar’s experience shows that the era of replacing proprietary PBX equipment with far more flexible NT-based systems that offer such features as universal inboxes, toll bypassing or "one wire to the desktop" has arrived for smaller companies and divisions of larger enterprises.

Analysts say the availability of the technologies that begin to demonstrate what kind of options are possible and practical for office telephones is pushing traditional PBX providers to open their architectures to leverage legacy systems.

"The architectural changes that [vendors] are describing are very clearly something that will happen" across the PBX industry, says Art Schoeller, research director for voice communications equipment, with the Gartner Group (Stamford, Conn.).

Gartner sizes the PBX market at $6.7 billion by 2000, and Schoeller predicts that 50 percent of systems shipped in 2002 will exhibit the kind of flexibility available in the Windows NT-based telephony systems.

For the new products to storm the market, the vendors must overcome concerns about reliability. Vendors are promising that even in a system crash, phones will have dial tones.

Some of the highest-profile companies among the 30 to 40 startups aim for that PBX market. Others say the market for their products is broader. Either approach is ambitious for a group of mostly $1 million to $10 million companies.

"This is the biggest market I’ve ever seen," says Joe Adams, vice president for market communications at Interactive Intelligence, and a computer-industry veteran who has founded and sold three companies. "You can back it down and say who is the market for this? The simplest answer is everybody with a phone."

The company markets its product to call centers already using a hodgepodge of systems from different vendors: PBX, ACD, voice mail, auto attendant, CTI software and middle hardware. Combining all those services in one server means less spending on installation and maintenance for the user. And it means Interactive Intelligence can claim to be competing for the combined business of all the products it replaces.

Sphere Communications Inc. (Lake Bluff, Ill., concentrates on another stumbling block to the market, proving that voice quality can be as good as the polished PBX and PSTN. Sphere relies on ATM networking, at a time when most LANs use Ethernet, to provide network-based-PBX capability across a global WAN in its Sphericall 2.0 product, which started shipping in July. The ATM network also allows "one wire to the desktop," instead of one line to hook each computer to the network and another line from the telephone to the PBX.

Another vender, AltiGen Communications (Fremont, Calif., has targeted regular business users, claiming since 1996 to offer users more flexibility than traditional PBX. More recently with AltiWare OE, the system accommodates third-party software through TAPI that allows customers to add more powerful call-center functions should the basic tools provided by AltiGen prove insufficient.

Gary Andresen, vice president of marketing at AltiGen, expects the products will be able to handle steadily larger enterprises by combining telephony servers on a network, multiplying the capacity for users. Some of the products are already theoretically capable of scaling to thousands of users, although none of the vendors contacted by ENT had customers with more than 450 users on the equipment.

"You cannot start up at the high end, because a telecom manager is not going to buy a 400-user system from a startup," Andresen says.

Gartner’s Schoeller says these vendors should be jockeying to be acquired by large PBX providers such as Lucent Technologies (Murray Hill, N.J., and Nortel Telecom (Santa Clara, Calif.,

While the large players in PBX haven’t acknowledged the market, they’re getting ready to enter it with their highly developed distribution channels, Schoeller says. "I think that within the next 18 months, at a minimum," Schoeller says, "one of those players, more than likely two, will come out with products that look like this."