Toshiba Telecom Shutdown: What Happened?

Toshiba this month will shut down sales of new systems in its business phone division as part of its continuing global restructuring.

In March, Brian Metherell, vice president and general manager of Toshiba America Information Systems’ (TAIS) Telecommunication Systems Division (TSD), notified dealers of the pending closure. Toshiba has “deemed it necessary to wind down our Telecommunication Systems Division (TSD) business starting immediately,” he said.

TSD is a manufacturer of IP business telephone systems designed for small-to medium-size businesses and larger enterprises with multiple locations.

Our coverage of the pending closure drew a lot of chatter from readers. Read through our gallery to get the latest information and find out what your peers had to say.

Follow contributing editor @EdwardGately on Twitter.

Ben Stiegler, Snaptech IT’s vice president of business development for Northern California, said his company is one of about 250 authorized TSD dealers in the United States. Dealers in the U.S., Canada and Latin America were all “blindsided” by the news of the closure, he said.

Stiegler said while sales of new systems (processors, licenses) will cease on May 22, a core staff will remain in place, along with inventory, to support: expansions of existing systems (hardware, licensing); warranty replacement/repair of systems under their current extended warranty terms, to 2021 for those sold recently with five-year assurance; and technical support for dealer engineering staff.

Dealers still don’t have clarity on existing inventory levels, which Toshiba says will not be replenished, “so prudent customers are stocking up now on spare and expansion components to support their short-to mid-range business plans,” Stiegler said.

“To me, this is a careful, measured and ethical approach — very different than when other main players have exited the marketplace,” he said. “While this is still a huge loss for Toshiba clients around the globe who have come to depend on Toshiba reliability and innovation, it at least provides a transition opportunity to plan and pre-buy. I’m curious to see if any existing platform manufacturers will either come out with a software flash update for Toshiba IP sets, or a media converter for digital sets that might allow retrofitting Toshiba endpoints into Brand X core functionality. Industry veterans will recall products like MCK extenders which ‘understood’ to a limited degree the digital set protocols for Toshiba NEC, Avaya, Mitel and many others.”

Toshiba is just one of many leading equipment manufacturers shifting focus, noted Jeff Newton, master agent TBI’s vice president of enterprise sales and IT.

“With technology evolving and changing so rapidly, hardware companies must adapt or perish,” he said. “Examples of adaptation include Microsoft pushing its way into enterprise voice with cloud PBX capability, and Cisco doubling down with networking and cloud by investing in Velocloud and now purchasing Viptela.”

Ongoing opportunities with Toshiba PBX can be transitioned to TBI Gartner’s Magic Quadrant providers for both on-and off-premises offerings, or partners can work with TBI to identify hybrid offerings that ensure on-premises redundancy, Newton said. Options include 8×8, ShoreTel, Arkadin, AT&T, Fuze, Mitel, Microsoft, RingCentral, Verizon, Vonage and West, he said.

“In the meantime, as hardware providers shift their focus to cloud, it’s important for partners to clearly communicate to their customers the benefits of cloud solutions,” he said. “And (it’s) equally important for companies like TBI to explain to selling partners how their business can grow by presenting stickier solutions, where they can further ingratiate themselves into end-user networking and infrastructure, and become instrumental in other technology decisions.”

Among reader comments, Jordan Marchand said the closure is “just one more reason why traditional phone systems are a thing of the past.” He works for Iristel, a Canada-based communications services company.

Iristel is one of a number of companies encouraging Toshiba customers to make a switch.

“Replace your outdated phone system with Iristel’s cloud-based system and never worry about it again,” Marchand said.

Also looking for new opportunities is TPx.

Karl Heiman of TPx, formerly TelePacific, said as a result of Toshiba’s TSD shutdown, business owners “will look to the cloud for communication solutions with a low CapEx and an immunity to obsolescence. This can be a complex process with seemingly endless options and confusing new terminology.”

“We are ready to work with you to determine how our UCx solution to VoIP can make the transition to cloud-based communications affordable and painless,” he said.

Philip Ingram says he’s a long-time technician working for Toshiba dealers and used to be “very gung-ho about their products, but they started dropping the ball back in the early 2000s and left us dealers to pick up the service calls and return trips due to failures and hardware glitches never completely patched — even to this day.”

“I even worked for a dealer that Toshiba revoked due to their own oversight of policy because another dealer was too close geographically and complained about it, but what about the fact that the dealer had already been selling Toshiba products to its client base for over five years already and been paying for techs to get certified?” he asked. “Not cool, Toshiba.”

Jeffrey Pearl, another reader, commented “they are certainly shutting it all down for a reason! And it’s not because things are going well.”

“The PSTN (public switched telephone network) is in the process of being turned down as well,” he said. “All POTS and PRI will be a thing of the past! This has been a 10-year process! Anyone thinking these prem-based systems survive, just are not watching the industry.”

Another reader who goes by Shpilkus says support for the Toshiba product from dealers will go on “well through the life expectancy.”

“Toshiba will also maintain their tech support and licensing. Toshiba products are rock solid and the tens of thousands of systems in place can be maintained for as many years as the customers require (20 years or more).”