5 years ago, only 42% of American businesses used VoIP (Voice over Internet Protocol) for their telecom solutions. Still recently, that number has risen to 79%—and it’s only going to keep on increasing.
But why is this the case? Does that mean your business should migrate as well?
This article explains what a traditional telephone system is and why businesses are gradually leaning towards more efficient solutions.
Let’s get started.
What Is a Traditional Telephone System?
Before we get to the subject matter, let’s first define what traditional telephone systems are.
You see, these “traditional telephone systems” go by different names, but they are most commonly referred to as:
These three are the same, but PSTN is a telecom jargon used more often by experts. POTS and Landline are simpler terms.
To put it simply, POTS networks facilitate voice communication over copper cables (the ones you frequently see outside on utility poles).
Just a decade ago, opting for a traditional phone system was normal. Back then, (because most business operations were stationary) POTS networks were the most efficient means of communication.
Investing in mobile cellular phones was unnecessary for most businesses since it was a relatively new technology (which meant it was costly), so it was the perfect communication tool for businesses during that time.
But since payphones were reasonably common, there wasn’t much reason for businesses to invest in a more expensive option. As long as companies were stationary, traditional phone systems were the smartest choice.
However, when VoIP was introduced into the mix, POTS gradually fell out of the equation. Eventually, VoIP would overtake traditional office telephone systems.
In fact, the disruption of the telecom industry by IP Telephony was so extreme that some experts predict that traditional solutions will become obsolete as early as 2025. But with global circumstances being pushed to the edge because of challenges like COVID-19, we might see the end of the landline era much sooner.
So why are traditional communication systems becoming obsolete?
The Disadvantages of Traditional Telephone Communications
Back then, POTS was the only solution. But it was a good solution.
By keeping businesses always connected via copper networks, it helped businesses stay on top of tasks without compromising deadlines. It also made large-scale customer relationship management (CRM) possible.
It did what it was made for, and it did well.
But if traditional solutions were enough, why is the world shifting rapidly towards IP Telephony?
There’s a reason why 50% of IT leaders migrated to IP Telephony in 2018 and why, by the end of 2021, that number is expected to soar to an overwhelming 90%. The way traditional phone systems are set up is simply restrictive.
If you’re familiar with unified communications (UC), you know that it’s governed by cloud computing technology. Unlike traditional phone systems, UC products function without the need for on-premises software (i.e. software that requires a physical location, often the confines of an enterprise).
On-premises software (or premises-based systems) means that the software required to run the phone system is located within the enterprise, hence “premises”. With UC, everything is automatically managed on a cloud interface, but with traditional phone systems, it’s the complete opposite.
Now, traditional phone systems have what’s called a “brain box.” It’s a piece of hardware located on-premises that connects via wires to each individual phone. But because this brain box couldn’t be taken anywhere else, mobility was severely restricted. And for the longest time (until people started migrating to IP solutions), this was the standard.
Obviously, as with any piece of hardware, the risk of hardware failure due to physical damage always exists. Some hardware components are so delicate that even accidentally dropping them will result in malfunction. Premises-based phone systems are no exception. In the event of a disaster, the usability of premises-based systems is high-risk. The likes of a hurricane or earthquake will have no trouble shutting down a premises-based system.
However, this is not limited only to natural disasters. Even pandemics like COVID-19 threaten businesses that haven’t migrated to a cloud-based system. During a lockdown, on-premises communication facilities are rendered absolutely useless, while companies that have taken the leap and migrated to a cloud-based system can continue business as usual.
Due to the global crisis caused by the COVID-19 pandemic, talks of a “new norm” have been making the rounds. Remote working is now more viable than ever. Until an effective vaccine is eventually created and distributed (which will take a while), it seems traditional systems will remain unusable for most businesses.
One of the main reasons that traditional solutions are becoming less and less popular is because they aren’t financially feasible.
Sometimes, monthly service fees for a traditional phone system can be quite inexpensive, so the prospect of lower monthly payments can be desirable (especially for small and mid-size enterprises). However, somewhere down the line, the total cost of ownership becomes higher than expected.
Although the up-front cost is low, the infrastructure is expensive. Setting up the PSTN connections is costly, and regular maintenance is required so that the quality of the service doesn’t wane over time.
So, even though the up-front cost is inexpensive, businesses actually spend more in the long run.
Another problem with traditional telephone systems is that upgrading is extremely inconvenient.
Apart from the cost of having to pay a premium for each upgrade or add-on, upgrading your system cannot be done at all without the help of a technician. Even directly modifying the phone settings requires a site visit from your telephone company’s technician.
Each caller also needs to have their designated phone line, which means that technicians have to go through every single one of your machines manually. And when you decide to upgrade your system, the product features also have to be manually updated.
Back then, this wouldn’t have mattered as it would’ve just been part of the package. But now that more efficient UC solutions have popped up, there’s little reason for most businesses to opt for a traditional solution.
Why People Are Leaning Towards Unified Communications
Now that businesses far and wide are starting to see why traditional solutions aren’t going to cut it, you might be wondering why Unified Communications is the solution people are leaning towards. Here’s a couple of reasons why:
Unlike the very restrictive traditional phone systems, UC solutions provide its users with better communication by providing more features (such as instant messaging, video calls, and conference calls) and combining them into a single user interface. By allowing users to use a broader range of features than traditional systems can provide, users have more freedom in the ways they can communicate.
UC products are also available on multiple devices. This means a user can communicate with their colleagues on their chosen device regardless of distance. Whereas traditional business phone systems would not have allowed mobile communication, mobility is a crucial feature that is present in every UC product.
One of the most useful features of UC is that it utilises cloud computing instead of physical copper wire connections. By leveraging the connectivity and mobility that the internet provides, the need for a physical location is eliminated and the costs allocated towards maintenance is reduced to zero. By opting for UC solutions, businesses can save as much as 75% on communication.
The best thing about UC products is that you don’t have to call a technician to configure your phone system’s settings. Whereas a traditional phone system would have required you to contact your vendor for every single issue, UC products allow you to configure everything from a single “unified” web interface.
It isn’t surprising why the telecom industry is shifting rapidly towards UC, leaving traditional solutions in the dust. UC is literally a direct upgrade.
Apart from being more affordable, UC products allow businesses more freedom, mobility, and overall better user experience. But it’s not that traditional telecom solutions are bad—it’s just that UC is the smarter choice. It’s the next step. There’s much less risk involved, and it’s more rewarding.
And in 2020 moving forward, it’s the choice you want to make.
If you want to learn more about IP Telephony and UC for your business, give us a call now and our experts at VoIPTech will help you figure out what you need. Visit this link to check out our IP Telephony and UC packages.