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Cisco takes enterprise telephony lead, riding an IP PBX wave

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After years of steady gains, Cisco's IP PBX solutions captured the enterprise telephony market lead over rivals Avaya and Nortel, according to a recent report by Infonetics.

Infonetics found that Cisco grew its IP telephony revenues by 19% in Q3 2008, riding a wave of IP PBX adoption even as traditional TDM equipment sales were projected to drop below the $1 billion mark for the year.

"It would have been surprising if you had looked at the market five years ago, but [Cisco] has been doing well for a few years now, slow and steady, and it's finally paid off, at least in this one quarter," Matthias Machowinski, Infonetics' directing analyst, said of the networking giant's telephony success.

He said that Cisco was unlikely to have the sales lead for the year, however, leaving that title to Avaya or Nortel, which ranked second and third, respectively, in quarterly sales. But in a year or two, barring unforeseen changes, Cisco will probably take the overall lead: It was the only company to make significant gains in the market this last quarter, while its competition either held steady or dropped a few points. After years of steady gains, Cisco's IP PBX solutions captured the enterprise telephony market lead over rivals Avaya and Nortel, according to a recent report by Infonetics.

Infonetics found that Cisco grew its IP telephony revenues by 19% in Q3 2008, riding a wave of IP PBX adoption even as traditional TDM equipment sales were projected to drop below the $1 billion mark for the year.

"It would have been surprising if you had looked at the market five years ago, but [Cisco] has been doing well for a few years now, slow and steady, and it's finally paid off, at least in this one quarter," Matthias Machowinski, Infonetics' directing analyst, said of the networking giant's telephony success.

He said that Cisco was unlikely to have the sales lead for the year, however, leaving that title to Avaya or Nortel, which ranked second and third, respectively, in quarterly sales. But in a year or two, barring unforeseen changes, Cisco will probably take the overall lead: It was the only company to make significant gains in the market this last quarter, while its competition either held steady or dropped a few points.

The enterprise telephony market experienced strong growth of 8% over the previous quarter, but Machowinski predicts that spending will drop and the competition will get fierce as the recession wears on.

"So far, the market has been growing fast enough that even though Cisco is taking share, the other guys haven't been declining," he said. "We do expect the markets to decline, so somebody's going to see their revenues decrease. I wouldn't call the market in disarray, but there's going to be some pressure."

Even then, Cisco will remain in an enviable position, Machowinski said, particularly as the TDM-to-IP PBX transition continues and networking professionals -- the people who know Cisco best -- continue to be given more authority on communications deployments.

"I think Cisco's going to be well positioned," he said, "just because they have such a huge position on the networking side."



Source: www.searchunifiedcommunications.techtarget.com



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