Is Microsoft a Threat to SMB Phone System Vendors?

April 6, 2007 by Garrett Smith

Microsoft’s Response Point Platform Has Many Shaking In Their Boots…But Should They Be?

Iotum CEO and blogger Alec Saunders has an excellent post about the impact that Microsoft will have on smaller players in the small medium business phone system marketplace with their release of their Office Communications Server, Office Communicator, and the Embedded Microsoft Response Point PBX. Alec makes some solid points in regards to Microsoft’s moves into this space and why small medium phone system vendors should be worried. The two most important points to consider?

Voice as just another application, and Microsoft is the KING of software.

I could not agree more with Alec’s points, but if I was a small business phone system provider, I would not as worried about Microsoft, as would with hosted service providers. Think about this for a second. If voice is just another application, and the current trend with applications is to have them hosted in “the cloud”, it makes sense that eventually there will be no need for a premise based phone system. Furthermore, as unified communications transitions to become unified business, the hosted service providers become hosted solution providers, delivering every business application; voice, erp, crm, etc. over an IP pipe. That is true unification within your business.

With the aggressive decline in the cost of bandwith, and the aggressive increase in bandwith pipe size, the reality of this scenario is very real, and is very scary for premise based phone system providers.

Why is the Hosted Model So Scary?

Because business and the way we work, is changing. The idea of a nine to five day is no longer. We work when we can. We need to utilize the “working moments” wherever they may be (home, hotel, car, plane, etc.) and premise based equipment DOES NOT allow you enough flexibility to truly leverage these moments. However, when your business tools are all hosted in the cloud, your office, your desk, becomes wherever it is that you happen to be. The hosted model is one that better suits our emerging work culture. In many respects the premise based is already dead – I use Skype more than my desk phones.

So yes, Microsoft is a threat to phone system vendors, but the even bigger threat to phone systems vendors is our emerging work culture, which revolves around working moments, that are only truly leveraged with flexible, accessible, on-demand, solutions which are only truly usable when hosted in the cloud. If I was a phone system vendor, my strategy would be to fight off Microsoft Response Point, and hosted solutions, by offering hosted-hybrid solutions that leverage both the benefits of a premise base solution and that of a hosted solution.

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