John Malone- Eastern Management Group

John Malone- Eastern Management Group | July 19, 2011 |


Small PBX Market Lifted Cisco and Avaya Sales in 2010

Small PBX Market Lifted Cisco and Avaya Sales in 2010 With an expanded focus down market, the top two vendors grabbed share from most of the rest of the pack.

With an expanded focus down market, the top two vendors grabbed share from most of the rest of the pack.

When Avaya, the second largest PBX company, grew its market share by 46 percent in 2010 (due in part but not completely to the absorption of Nortel), one might not have expected the largest PBX manufacturer, Cisco, to grow its share by 18 percent at the same time. But they did, meaning neither Cisco nor Avaya, both known to dominate the enterprise market for PBX sales, gave up market share to the other.

Instead, according to research conducted by The Eastern Management Group, these two arch rivals turned their attention on the small customer market and then took PBX sales and market share from other notable PBX manufacturers.

In North America, small PBX sales account for about half of all lines sold annually, according to Eastern Management. Avaya and Cisco, by introducing new small IP PBX systems and telephone sets with very low list and street prices, were each able to capitalize on their brands, respected product portfolios, and strong two-tier distribution channels, to offer an alternative PBX solution to small businesses. This strategy enabled both Avaya and Cisco, already dominant in the over-100 seat PBX market, to turn attention to smaller customers desiring affordable IP PBX systems. Prior to 2010, neither Avaya nor Cisco offered inexpensive PBXs needed by small businesses.

In addition to introducing new PBX products at inexpensive prices, Avaya led all other PBX manufacturers in 2010 in the number of reseller and customer promotions offered, averaging far more than the industry average of 11 programs at all times. Avaya also ran numerous competitive financing offers in 2010.

ShoreTel, perennially a strong player in the small PBX market, with an average system size of 50 lines, grew its North America market share 14 percent in 2010. Boasting a PBX product family renowned for low total cost of ownership (TCO), and high customer satisfaction ratings (based on Eastern Management research), ShoreTel proved too tough for others to neutralize.

Eastern Management expects the SMB market to be rich in opportunity for the next few years, as large manufacturers develop increasingly inexpensive IP PBX systems and phones. In addition, open source PBX appliances will continue to evolve; and hosted PBXs and cloud PBXs promise to penetrate deep into the small business market.

About Eastern Management:
The Eastern Management Group is one of the world's premier strategic research companies, operating at the center of the global technology industry. By delivering product research, market research and analytical tools to clients, Eastern Management facilitates decision making by IT Professionals and IT Vendors.


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