Enterprise telephony systems are aging fast but renewals and replacements are not a priority option in the current economic environment. Enterprise telephony systems usually have a life cycle of six to seven years, and by that logic, the last six to seven years (with 2,000 as the base year) should have been marked by active telecommunication renewals, but the market points in another direction. Diane Myers, principal analyst for VoIP at Infonetics Research, notes: "In the first quarter of 2013, enterprise PBX spending dropped to its lowest point since mid-2009. The big squeeze is coming from depressed average revenue per line and misfiring economies are only exacerbating the issue."

With the slowing down of worldwide PBX renewals, one might infer that the telecommunications industry is going into a terminal decline, but it is anything but that: the communications industry is, in fact, riding a second IP wave.

The new wave is feeding on network convergence. The buzzword is average revenue per line - the Waterloo of Plain Old Telephony Systems. It is not enough for telephony lines to carry voice. They must also carry data and video (converging networks) to offer value proposition to the cost-conscious enterprise business segment. Network convergence is an easier pill to swallow because it offers lower bandwidth and maintenance costs.

Cloud telephony is an integral part of next generational communications for enterprises. It is more sophisticated than the desk phone and is the key enabler of business collaboration and mobility environments. It has profound implication for chief information officers (CIOs) and businesses today.

In today's competitive market, businesses are looking for cost as well as operational efficiency, refocusing their employee productiveness towards core business activities. There is no reason for enterprise status quo when cloud has so much more to offer - business & telephony - modern enterprises.

In a cloud telephony system, the day-to-day management and operation vests with the service provider with the enterprise becoming the consumer of IT system rather than its users. Long considered the buzzword in the SME/SMB segment, cloud telephony is winning installations in bigger companies because of the flexibility and mobility it offers in an increasingly connected world.

Cloud telephony fulfills emerging business and telephony needs of enterprises today by providing a broad based spectrum of business and operational efficiency needed by enterprises in a hyper competitive market. Some of them are as follows:

Business non-stop: Cloud telephony systems are hard to take down because they are part of an amorphous cloud system. While downtime in wide area network (WAN) or local area network (LAN)-based system cuts connectivity for hours, cloud-based system remains operational, allowing businesses to route calls and faxes to employee smartphones. With smartphones fast outselling desktops, the enterprise move towards cloud-based systems is a step forward towards a dynamic and mobile workforce.

Refocus on core business activities: With the day-to-day running of the applications and systems vested with the service provider enterprises can refocus their staff dedicated to managing hardware and systems.

Flexibility: Cloud telephony provides multi-branch support and scalability. Enterprises can scale up operations quickly by opening branches at new locations and adding new branch communications to its single cloud-based PBX system through extensions. A single cloud based PBX system, provides a unified front to the customers by standardising call handling protocols. A single unified call management system is more professional than a disparate system of multiple call-handling systems existing in multiple branches offering diverse customer service experiences.

With cloud telephony, enterprises gain real-time voice capabilities across enterprise networks. Since it is easily integrated into SMS, email and desktop and mobile environments, conversations are seamless across analog, digital, fixed and mobile devices, empowering enterprises with high-powered business mobility and productivity tools and solutions. In such a seamless environment, businesses and CIOs are ensured lower cost to business, as well as higher operational return on investments (ROIs).

Cost is always part of the conversation in any deployment and so is security and resiliency. Cost savings in hosted environment comes from capex savings, opex savings, administration savings, operational efficiency, and sharing of networks.

Capex and up-front costs savings: On-premise telephony systems is inherently more expensive than cloud-based telephony systems due to various investments made on telephony systems, PBX, routers, training, cost of implementation. The user of cloud-based telephony is able to bypass CAPEX purchases and cost to implementations as it is only consuming IT resources provided by the company hosting the services.

Opex: Hardware maintenance and software upgrades impose a heavy cost burden on the enterprise, impacting its bottom-line. Generally, total cost of running on-premise operations will exceed the initial investment in the operations. Further, cost of servicing old legacy systems is prohibitively high once license expires. On the other end of the spectrum is hosted PBX with its pay-as-you-go and pay-as-much-as-you-use business model. Enterprise pay for services used and capacity built up for use in the future.