December 4, 2015
At a recent tech insider conference I attended, a Microsoft leader announced the company’s plans to make a major move into phone services for business. It sounded significant – but possible, given that the company already owns 90 percent of the desktop market and Skype.
This big news was confirmed this week when Microsoft made news headlines with its plans for new cloud-based services as a part of Office 365. Microsoft will soon offer a cloud PBX (public branch exchange), allowing connection of calls between the public switched telephone network (PSTN) and Skype clients on desktops and mobile devices.
Microsoft will offer “managed calling plans and phone numbers,” taking conventional telephone companies out of the loop. The PBX and calling plans are U.S.-only to start, but Microsoft's promising to bring this to other countries real soon now.
This is definitely a game changer. It stands to totally disrupt the way businesses look at phone systems. This reflects a major shift of communications to a digital format and is among the biggest breakthroughs in the Unified Communications as a Service (UCaaS). This transition is complex. Questions remain about how Microsoft will support being a phone company, the primary operating system and back office application provider.
While this will take some getting used to for some, shifts like these are not new to phone systems. Bell Phone Company went from being the key player and serving much of the United States from 1877 to 1984. The company then went bankrupt and was taken over by digital giants like Cisco, Mitel and now possibly Microsoft.
Here’s a look at the major shifts we’ve seen and how they all are at play today:
- Plain Old Telephone System
TDM, formerly known as time domain multiplexing, was developed in the late 19th century and was first used to route multiple transmissions simultaneously over a single transmission line through telegraph machines. Essentially, it carved time out into chunks. Bell further advanced the technology in 1962 and it remained a mainstay in phone technology for decades. This “plain old telephone system,” called POTS for short, has been quite stable. You could lose power – and not your phone line. It also came with a dial tone and sound, sometimes even static. - The Internet Phone – VoIP
We lost the dial tone and any noise with the advent of VoIP, formerly called Voice over Internet Protocol, in 1995. We eventually introduced noise back into the service to make it more comfortable for users. VoIP signaled the first major shift of communications services to the online world. It’s also been known as Internet Telephony, IP Telephony and broadband phone. In this technology, voice and data are transmitted from one IP address to another over the Internet. It initially functioned more as a work around for long distance calling and later evolved into a commonly used phone service. Businesses soon started using it to establish call centers around the world and it took center stage when Skype first launched its video calling platform or “soft phone” in 2003. Now FaceTime is built into Apple devices and is becoming almost as common as the traditional voice call. - Hosted Voice and Unified Communications as a Service
Unified communications further solidified with the introduction of hosted voice and the newest buzzword UCaaS, formerly called Unified Communications as a Service. UCaaS is when communication and collaboration applications and services are outsourced to a third-party provider and delivered over an IP network, usually the public Internet. This enterprise level service includes phone and messaging and video conferencing. It appeals to organizations with its scalability. - Manufacturer-Originated
This is a significant shift that brings us almost full circle to where phones started a century ago. Widespread telecommunications started with a telegraph company and users renting the service from players like Bell and AT&T. Now, with the introduction of the new Office 365 phone services, Microsoft becomes a phone company. That’s who you call when your service is down. Similar to hosted options, this raises concerns about interoperability and the ability for an organization’s phone system to “talk” to its other systems.
For most organizations, an on-premise solution, rather than hosted voice or a cloud option, is the first choice since it is now possible to turn this once capital expenditure into a monthly cost through leases. Will that change?
Like with many current technology trends, we are moving back to the centralized service that it all originated from. Unified communications has become the expectation and we are moving away from phone wires more and more. The Internet is becoming the vehicle and more manufacturers are likely to follow the lead of Microsoft, Mitel and Cisco.
We’ve made more advancements and shifts in phone technology in the past 15 years than we made in the previous century. The next five years could completely change how we see phone services at an enterprise level.
