TDM Still Exists—Here’s Why IP Should Replace IT Now

TDM Still Exists—Here’s Why IP Should Replace IT Now

With all the talk of advanced collaboration apps, such as virtual whiteboards and team chat, shifting the UC conversation to migrating from TDM to IP may seem like you’re living in a time warp.

The year is, in fact, 2017, and the reality is that 72% of companies still have TDM infrastructure in place—and they’re not rushing to replace it.

But they should.

Operating a full TDM environment, or one that is mixed IP/TDM, is more costly than running all IP. Those with a mix of IP and TDM spend $735 per end unit (ie, phone, audio bridge, etc.) on average, compared to only $677 for those with an all-IP environment, according to Nemertes 2016 Unified Communications Total Cost of Operations research.

Overall, organizations of all sizes saved 8% per year on operational costs moving to all IP. But larger organizations—those with more than 1,000 locations—saved 26% per year as they completed their IP deployments, according to the study of 299 IT leaders. Those are some significant and compelling savings, leaving me to question why IT leaders aren’t rushing to get this done.

What’s the Holdup?

One reason is simply priorities. The business units aren’t saying: “Get me off this TDM stuff,” at least, not unless there are significant reliability or feature-functionality issues. As a result, other projects such as those relating to digital transformation, take priority. The irony, though, is that digital transformation initiatives require a cohesive, reliable infrastructure that enables employees to collaborate.

Another reason is budget. Even though most companies will save money in the short- or long-term with all IP, they sometimes must upgrade their infrastructure (cabling, Power Over Ethernet switches, etc.) to support IP telephony. Those upgrades can be extremely expensive—and in some cases, impossible because of the type of location.

That’s when Power Over Long-Range Ethernet (PoLRE) solutions, which reduce the overall capital costs of a migration to IP, provide the benefits of IP without the underlying infrastructure costs. Typically, 17% to 43% of capital costs go toward network upgrades.

For example, an acute care hospital did not have Power-Over-Ethernet (POE) switches or Cat5 cabling needed for IP telephony. Most organizations simply perform upgrades, typically costing anywhere from $150 to $300 per drop. However, for this facility, infection control is the biggest barrier to facility changes. If they were to upgrade the LAN, workers would have to seal off the area, address air control if they had to pull ceiling tiles, and other requirements—all off hours. That would have increased the per-drop cost to $1,000, vs. only $200 by using a PoLRE solution from NVT Phybridge.

I recently participated in a webcast with New Mexico State University, which also installed NVT Phybridge to enable IP without upgrading all infrastructure. This was crucial to the university because running Cat5 cabling in old buildings was cost-prohibitive—and in some cases, impossible.

Benefits Abound With Full IP

In a 2016 research project, Nemertes interviewed 10 companies about the financial impact of moving from TDM to IP. For example, those with full IP deployment were able to reduce Mean Time To Repair (MTTR) by 71%. Why? They have a cohesive telecom system or service vs. islands of different brands of TDM PBXs. And they’re able to use the network to centrally manage outages.

Other benefits include a 34% reduction in equipment maintenance. Some organizations had resorted to finding spare parts on Ebay for their aging TDM PBXs. Others simply had no choice but to pay (extremely expensive) maintenance charges for long-since end-of-life equipment.

Bottom line: IT budgets are increasing in 61% of companies this year. It’s up to IT leaders to assign some of this budget increase to address this aging infrastructure to improve collaboration capabilities and to save money. Be able to articulate why improved foundational infrastructure will facilitate employee productivity and digital transformation initiatives. And in doing so, evaluate technology options, including full IP migration with infrastructure upgrades or through PoLRE.

You can read more about the shift from TDM to IP in two papers Nemertes has written, based on original research:

Share this post