Intermedia Exec Offers Insights into the Future of Business Communications
The recent announcement by Toshiba that it will be closing down its Telecommunications System Division (TSD) in North America took many of its customers and competitors by surprise. Toshiba has been a long time innovator and a stronghold in the telecommunications industry, offering document solutions, digital signage, printing systems, software solutions, and more. But recently, in a letter from Toshiba to its dealers and partners, the company said that the wind-down of its TSD business is part of its overall global restructuring, effective immediately.
For some industry experts and market watchers, Toshiba TSD’s demise is not surprising. Despite the brand’s solid and reliable reputation, Toshiba sales have been sluggish for quite some time. Industry experts believe that this is due to Toshiba’s inability to keep up with its more innovative competitors in the market, in addition to newer acquisitions like Westinghouse Electric that did not take hold.
In this article, Mark Sher, the Vice President of Product Marketing at Intermedia, offers insights into what may have brought Toshiba’s departure from the telecom industry, and why the best path forward for business communications is the cloud.
Toshiba TSD: From Founding to Decline
As a division of Toshiba America Information Systems Inc. (TAIS), TSD was founded in 1978 and offered IP business telephone systems for small to medium-sized businesses and larger enterprises with multiple locations. Toshiba’s solutions were known in the market for being incredibly reliable, feature-rich, and cost-effective. For SMBs looking for a good telephone system from a trusted brand, Toshiba was their go-to.
In the early 90s, IP-based systems gained popularity. Big players in the industry and newcomers alike recognized that software, not hardware, was driving the business communications revolution, and so they developed with their own IP-based offerings. Toshiba, however, did not launch their IP-based Toshiba IPEdge system until 2011 -- a full decade later. It was also the time in which so many technological changes had already taken place in the business voice communications market. For comparison, in 2011 Apple released the iPhone 4S; Facebook reached one trillion page views, and the global mobile VoIP market was already worth $16 billion.
According to Sher, “Toshiba has been a mainstay in the phone business for forever, and was a major dominant player for a long time...but they were late to the IT industry and arrived late to cloud solutions.” Arriving late to the cloud communications revolution, Sher believes, was what cost Toshiba their business phone sector.
“We see their departure as a moment where you can look back and say 'this is where things shifted to the cloud,'” Sher said. “They are a giant, and if the cloud can take down one company it can certainly take down others.”
Sher also emphasized that even though possessing good technology is important, how you deploy this technology matters most. “In regards to Toshiba (or any big players late to the cloud technology realm) their company needs to be nimble enough for them to change their business model from selling hardware/software to a model that focuses on recurring services business," said Sher. "This shift is happening all over the place...servers are now moving solely to the cloud, and people aren’t buying on-premise servers as much anymore, now choosing cloud-based storage systems instead.”
Sher considers Salesforce, a Customer Relationship Management (CRM) software and enterprise cloud computing provider, as a prime example of a big name that started cloud and adapted to the changing market. “Salesforce launched early on in cloud adoption when the cloud was called soft Software-as-a-Service (SaaS) pre-cloud; their continued success shows a shift in business and shows how you go to market, how you sell, and how you support the needs of your customer base,” shared Sher.
The Inevitable Rise of Cloud-Based Communications
Toshiba’s departure in the telecom industry also highlights how business communications have significantly evolved over the past number of years. “Phone systems used to be reserved for large enterprises, and both lines and long distance calling used to be crazy expensive," noted Sher. "But after deregulation, there has been a significant cost reduction in phone lines and long distance. VoIP and the internet brought about a move off of hardware and off premise and into the cloud.”
VoIP has made it possible for businesses of all sizes to get more from their phone systems and pay less in the process. Long distance calling, for example, was expensive for both business and residential customers with the old business model. “Not long ago customers were paying fifteen cents a minute for international calls, and now it’s down to three," said Sher. "This trend is now benefitting SMBs with a downward migration of features.”
Aside from lower costs, Sher also believes that another reason why more businesses are moving to the cloud is because enterprise features previously available to big enterprises with big budgets are now easily accessible to smaller businesses. Sher cites call hunting and call queueing as examples. “Five to eight years ago small businesses couldn’t have these features because of the expensive hardware associated with them...it wasn’t that they didn’t need these [features], they just couldn’t afford it," he explained. "But now, these are included for free through cloud PBX solutions like Intermedia.”
With enterprise phone features now available even to small offices, businesses can enjoy greater flexibility. There’s no need to hire a receptionist solely for managing calls and everyone can work from home using one main business number. “There is so much more flexibility in play now thanks to VoIP and cloud solutions,” said Sher.
What to Consider When Making the Switch
There are so many benefits businesses can enjoy when making the switch to cloud communications. These include cost savings and access to a wider set of phone features. But in order for businesses to reap the most benefits, Sher says it is crucial to choose the right provider. He offers the following advice to companies looking to deploy a cloud solution:
- Choose a provider that offers support from planning to implementation - According to Sher, customers should work with a provider that has good onboarding or good migration from an on-premise or POTS system to a cloud option. “It’s important to ask: 'how do I get transitioned over? Is there someone dedicated who can walk me through the process?' If you feel like you’re alone in the process, you should move on to [another provider],” advised Sher. For instance, Intermedia, a top provider of cloud-based business applications, makes sure that transitioning to the cloud will be as smooth as possible for their customers. They recognize that many small businesses and individuals are people and professionals, not telecom experts. And so they make sure to provide the right support and assistance to customers transitioning to cloud solutions. They even have a department of 12-15 people working full time solely on number porting.
- Aim for simplicity - Cloud phone systems are loaded with a range of features. However, just because they are feature-rich doesn’t mean they have to be complicated or involve a difficult setup process. Sher says customers should also consider the simplicity and flexibility of the solution they have chosen to ensure zero downtime. “Customers should be able to set their new phones next to their old phone, play around and adapt, configure features; and then once everything is set, be up and running with zero downtime port,” Sher said. “Intermedia aims for zero downtime and wants their customers to be able to get their new systems plugged in; deliver plug and play devices, so customers can just give their devices both power and internet, and then they should just turn on,” he added.
- Consider security - Another critical factor to consider is security. “A good provider keeps all of their equipment/gear in a hardened data center that is secure, has multiple levels of backup and power, with gear locked in a cage with biometrics all controlled,” noted Sher. In addition to working with a provider with robust security measures in place, businesses should also be aware of some things to ensure optimal security on a VoIP system. These include keeping all critical data behind a firewall. “Intermedia can simply enable secure SIP-encrypted individual phone calls if you want," said Sher. "But as a customer, you own part of this security...it’s like not letting someone simply walk into your office and use your equipment."
- You get what you pay for - Sher also commented on the rise in popularity of free cloud collaboration solutions such as Skype and Google Hangouts in most small businesses. While such platforms offer an easy and convenient way to communicate, Sher says these services are not able to deliver all the communication requirements that businesses need for success. “The basics are that you get what you pay for. Free services can be great, but its like same philosophy of getting new brakes on a car: you wouldn’t take free brake job because it is something that is mission critical for a car to function properly,” Sher said. “It makes better sense, in the long run, to pay a fair amount and thus expect good work and good quality from that investment. If you pay a fair market price, you expect reliability, the best customer service, and the features you need to be successful,” he added.
Where the Business Communications Industry is Headed
With so many technological changes occurring today, Sher believes that at the end of the day, what people look for most in a communications system remains the same: quality, support, service, security, and price. He also believes that any “trends” in business communications (such as mobility and mobile phone) are actually more like long-term industry movements, which will be fully adopted and become an active part of business communications. And at Intermedia, Sher says, they are focusing on combining these fundamental requirements along with the industry "trends" to deliver the best experience to its users. “Telecom has always been this way...a slow-moving evolution that adapts trends over time and embraces them,” Sher said.e
About Intermedia
Founded in 1995, Intermedia is a one-stop shop for cloud business applications. Their robust application suite, Office in the Cloud™, integrates all the essential IT services businesses need do business. These include email, voice, file syncing and sharing, conferencing, instant messaging, identity and access management, mobility, security and archiving. Intermedia was recently acquired by Madison Dearborn Partners.