Centrex: It's alive (for now)!

Old-school hosted telephony is still around for government organizations, universities

Centrex is a lot like the talking plague victim from Monty Python's "Holy Grail": It's not quite dead yet.


BACKGROUND: VoIP converts say good riddance to Centrex

Joan Moyer, president of the end user-run non-profit International Telecommunications Professionals Exchange (ITPX), says Verizon and AT&T combined have more than 10 million analog Centrex lines still active across North America. This is, of course, way down from the estimated 16.5 million analog Centrex lines that were active in the United States in 2002, but it's still a significant figure.

Centrex has been around since the 1960s when it was developed by New York Telephone as a substitute for PBX switchboards in large enterprises. Companies were initially drawn to Centrex because it meant they didn't have to dedicate in-house staff to running the telephone system and could instead rely upon the phone company to do it for them. But with the advent of hosted VoIP services in recent years, Centrex has largely fallen by the wayside for many enterprise users. In fact, the ITPX used to be known as the National Centrex Users Group before changing its focus to cover both Centrex and more modern technologies such as VoIP. Moyer says the group, which is holding its yearly conference and trade show in Las Vegas on April 23, now does a lot of work in helping members make the transition away from analog-based Centrex.

Even so, Moyer says many members of her organization, particularly government agencies, still use Centrex for their telephone exchange system even as they plan to eventually migrate over to a VoIP system.

"A lot of federal government agencies are big users of Centrex, as well as large enterprises with multiple locations," she says. "Because Centrex is hosted it's easy to put a seamless system across multiple locations."

Moyer does acknowledge that most ITPX members aren't planning on staying with analog Centrex forever and are likely to shift gradually over to a hosted IP-based service instead. However, she says Centrex is still meeting its hosted telephony needs at a low cost since "all the equipment" for Centrex "has been purchased and paid for" and agencies aren't spending money to hire people in-house to maintain it. And besides, she notes, "a lot of the time... government people don't want to be on the bleeding edge of technology because if the system goes down, you've got problems." All told, Moyer expects that Centrex will likely still be with us for the next 10 to 15 years.

Irwin Lazar, an analyst at Nemertes Research, acknowledges that he rarely sees Centrex being used by large corporate enterprises. However, he says Centrex still has a place at many large universities that just need a system to deliver basic voice services.

"You still use Centrex if all you care about is having a simple phone line and you don't have the network infrastructure to support IP phones," he says. "It's fine if all you really need is a dial tone and a voice box somewhere."

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Copyright © 2012 IDG Communications, Inc.

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