Where is Your Company Among the Life Cycles

Where is Your Company Among the Life Cycleís?
(How Long will the PBX Life Cycle Be?)

Recently we did a detailed life cycle evaluation not only on some companies but the system or product used. This example, the PBX system or private branch exchange, would be considered ďburied in overheadĒ by some, but we broke down into detailed areas evaluating specifics that effect ever-changing technology factors. As PBX technology becomes more advanced, the life expectancy of PBX systems is shrinking. Enterprises must plan for shorter life cycles for newer, server-based PBX systems. I will show different criteria for several types of enterprises using the system yielding limited life expectancies or cycles.
My example here is different than the traditional product life cycle, but you can identify the events and actions taken in order to compensate for the unquantifiable metrics often found when trying to make a sound business decision. I understand the Stage of Production, Product/Service Life Cycle, and the Nolan Norton Technology Cost Life Cycle. You will read how I have immersed my discussion even deeper in the technology cost life cycle. Knowingly aware of this, a company most often will know where they are in the other cycles.

Key Issue
How will enterprises keep their voice- and call-processing equipment up to date through 2002 without facing major migrations?

Strategic Planning Assumptions
Through 2002, enterprises purchasing PBX systems should expect an average system life cycle of four to five years (0.8 probability).
The PCX will become the preferred technology for enterprise-wide voice switching in Type A (leading-edge) enterprises by 2001, while Type B (mainstream) and Type C (conservative) enterprises will delay adoption of PBX technology by up to five years (0.7 probability).

Enterprises planning to purchase PBX systems within the next five years face tactical decisions that will affect their business both operationally and financially. PBX systems are migrating from a purely proprietary software and hardware architecture to an open-server platform that will be differentiated by the software, service and support each vendor provides. In the transition to an open-server platform (see Figure 1), one certain change will be that manufacturers will be unable to offer life cycles as long as those offered by their proprietary predecessors. Enterprises planning PBX purchases through 2002 should expect an average PBX system life cycle of four to five years (0.8 probability).

Tactical Guidelines
Enterprises planning to purchase a PBX system within the next five years should expect an average system life cycle of four to five years. PBX life cycles have typically averaged eight to 10 years; however, changes in PBX architecture will significantly impact PBX longevity.
We classify PBX life cycles by Type A, Type B and Type C enterprises:

Type A enterprises should plan for PBX life cycles of three to four years.
Type B enterprises should plan for PBX life cycles of four to five years.
Type C enterprises should plan for maximum PBX life cycles of seven years.

In the past, the completely proprietary structure of PBX systems gave their manufacturers the ability to control product life cycles. If new features or technologies were needed, the manufacturer would evaluate the current platform, and implement a combination of hardware, software and "firmware" solutions to offer that feature or technology on the existing system architecture at an additional cost. This approach provided the enterprise with a reasonably reliable product with an average life cycle of eight to ten years. Product platforms did change, but only when the necessary technology or feature required drastic changes to the existing platform. Even then, manufacturers sought to integrate adjunct peripherals as an interim solution supporting their installed base while a new solution was being developed.
Now, as the PBX migrates toward a more data-centric LAN platform, PBX manufacturers will become more reliant on and tied to life expectancies of their server and hardware providers - resulting in the "Trojan horse principle." According to this principle, PBX manufacturers will increasingly develop and offer new applications and features that are only available on their server-based products - eventually forcing the transition to an entirely LAN-based architecture. In doing so, vendors may claim that they are only responding to the market request for open standards in telecommunication products.

A good example of where PBX systems are