Does the Software Evolution Spell Doom for Desk Phones?

James Anderson

**Editor’s Note: Read our list of 20 top UCaaS providers offering products and services via channel partners.**

Do businesses that sell desk phones need to rethink their practice?

Last year we asked the same question with mixed results. Analysts and vendors told us that office phones might have a future if they play friendly in a “mobile-first” world.

“Bottom line is, we came up with a thesis that in order for desk phones to be relevant in the future, they must be better integrated with mobile devices and software applications,” said David Plakosh, general manager and chief technology officer of Allworx.

Alcatel-Lucent’s David Zhou

But technology evolves rapidly – you can quote me on that – and 2018 is already seeing different faces and trends in the market from last year. A panel of vendors recently advised partners on how to handle the emergence of Slack in the UCaaS market.

So it’s time to revisit this topic. We spoke to a desk-phone provider, a VoIP provider and a consultant about how this conversation is evolving in 2018 and how it affects channel partners and their customers.

Alcatel-Lucent initially reached out to to me with a statistic from Wainhouse Research that says 85 percent of the workforce uses a desk phone. David Zhou, the company’s product line manager, told me that there is something of a mixed bag regarding the state of the market; it’s there to stay, but it might not grow much.

“We must agree that the global desk-phone market (or terminal market) is a highly developed market, so we’re unlikely to see dramatic growth in coming years,” Zhou said. “So far, we don’t see a timeline for desk phones phasing out; it will always be there.”

The slowed growth applies more to the U.S., as Zhou points to a growing market in countries like Brazil, Russia, India, China and South Africa because desk phones are cost-effective.

Vonage’s Omar Javaid

But there are some exceptions in the U.S., Zhou says, such as the health care, travel and call-center verticals.

Zhou and Vonage’s Omar Javaid agreed that demand is rising for conferencing phones and “huddle rooms.”

But for Javaid, who serves as chief product officer for Vonage, the prognosis for desk phones is declining.

“What we’ve seen is a year-over-year sequential decline. This industry – specifically UCaaS – has really become a software business,” Javaid told Channel Partners in an interview.

Kirk Armstrong, network design specialist for Eclipse Telecom, mainly agreed with the two vendors. While he doesn’t see desk phones becoming more prominent, he says the duration for them to phase out is “decades.”

“This is more along the lines of a long-term transition out. We’re not seeing a ton of people saying, ‘Hey, I’m moving from UCaaS provider to UCaaS provider,” and then they’re yanking all their phones out. If it’s a heavily mobile workforce or a heavily work-from-home workforce, we’re seeing some adoption in that. But for the most part, people are still working in the office from a desk phone,” he said.

Javaid concludes that it is a “declining business” with products that are very still existent in businesses, such as mainframe computers.

“It will always be there in some respects, but it’s all going to be taken over by software, whether that software is …

… a softphone on your computer or an app on your mobile phone,” he said.

It’s not the first evolution business-phone vendors and partners have seen. Javaid says providers already have made the shift from hardware to on-premises software.

He suggests that partners should lessen their reliance on hardware, and many are taking his advice. Plenty of partners have taken on characteristics of an independent software vendor (ISV) or systems integrator.

“I think just being a hardware type of VAR of course still exists,” Javaid said. “It’s also going to be a tough business.”

What About BYOD?

Will companies allowing their employees to use their own mobile devices sound the death knell for desk phones? The sources for this interview weren’t so sure.

“What I can say is BYOD is moving ahead, but many businesses are still providing devices to employees — at least at the enterprise level,” Zhou said. “How to manage those BYOD devices safely and easily is still a pain point for some corporate IT teams, and having a dedicated device-management strategy for dealing with BYOD is a must.”

Eclipse Telecom’s Kirk Armstrong

Armstrong says some startup companies have moved to a BYOD strategy, but that it’s a bad sign when an established enterprise adopts one. It can start as a company looking to save money but result in “1,000 different paper cuts” through various unchecked expenses.

“Bring-your-own-device is something that we heavily discourage [companies] from doing,” Armstrong said. “It’s not something you can contain, and once it’s out in the ethos, there’s no bringing it back in.”

Javaid says Vonage uses applications that quickly provision and deprovision employees joining or departing the organization.

“I’ve heard both sides of the argument on [BYOD]. I think BYOD, especially with smartphones, is not only a big deal, it’s here to stay; it’s growing. There are absolutely security issues and privacy issues. Many of them can be addressed and are addressed through software,” he said.

The overwhelming agreement is that the mobile phone is going to have an even greater impact on the business telephony market in the upcoming years. And partners need to take that into consideration.

“For some of these folks, they’d be looking at this with some apprehension, but I think it’s a great opportunity for them,” Javaid said. “It’s a great opportunity for the industry, because it’s underscoring how this is a software-as-a-service industry and how the the telecommunications industry and the computing/internet software industry have become almost the same now, whereas before these were two very different worlds. I think the humble desk phone is just a sign of that.”