Cisco Grabs No. 2 Spot in Enterprise Telephony

 
 
By Paula Musich  |  Posted 2008-02-29 Email Print this article Print
 
 
 
 
 
 
 

Cisco is taking market share from Alcatel-Lucent, Avaya, Nortel and Siemens.

Cisco Systems has jumped from fifth to second place in market share in the worldwide enterprise telephony market, according to Infonetics Research's latest survey.

In its "Enterprise Telephony" report, released Feb. 28, Infonetics found that Cisco had climbed over Alcatel-Lucent, Nortel and Siemens to grab the second-largest market share behind leader Avaya.

"Cisco took a little bit [of market share] from everyone else," explained Matthias Machowinski, directing analyst of Enterprise Voice & Data at Infonetics. The others either "went down by a half a percent" or were "flat," he added. Alcatel-Lucent had the second spot for 2006.

The overall enterprise telephony market topped $9.6 billion for 2007, up 6 percent over 2006, despite the fact that the market for traditional TDM (time division multiplex)-based PBXes was down 20 percent to just over $1 billion.

For the fourth quarter of 2007, the overall market generated $2.4 billion, which was down by 7 percent sequentially. That is typical, Machowinski said.

Notably, the market for IP softphones hit a growth hockey stick in 2007, when it saw a 55 percent jump to 385,000 units. That suggests that users are beginning to see the real benefits of IP telephony, Machowinski said.

"While an IP phone may be cool, how different is it really? A softphone enables a whole host of other things. It allows you be more productive. I think we'll see [unified communications] with presence indication all wrapped up with e-mail and IM become more prevalent," he said.

Click here to read an interview with Cisco CEO John Chambers about the company's next-generation data center initiative. 

Worldwide shipments of both IP phones and soft phones were up 29 percent from 2006 to 2007.

Infonetics in its forecast for enterprise telephony expects double-digit growth for the next couple of years, slowing down to single-digit growth by 2011. "Hybrid and pure [IP PBXes] will very likely stay in the double digits throughout this forecast period. I think later on we'll see a new transition from hybrid to pure IP switching. Most legacy vendors will have pure IP systems in place," Machowinski predicted.

In 2007, hybrid IP PBXes accounted for two-thirds of all lines shipped, while pure IP PBXes accounted for 18 percent. Furthermore, last year is the last time TDM PBX shipments will reach $1 billion, he said. "That'll shrink to under $100 million by 2011. It's declining 50 percent a year on average. IP switching is taking up the slack," he said.
 
 
 
 
 
 
 
 
 
 
 

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