The PBX is Dead! Long Live the Communications System!
After declining sales in 2008 and 2009, mainly due to the economic crisis, 2010 witnessed recovery of the communication systems and endpoints market.
Unified communications and advanced collaboration may be all the rage, but many companies are still just trying to upgrade their telephony systems. Which helps explain why the world enterprise telephony systems market shipped 43.2 million lines in 2010--a growth rate of 14.4 percent from 2009 to 2010--according to Frost & Sullivan's latest research, conducted by my colleague Alaa Saayed.
After declining sales in 2008 and 2009, mainly due to the negative effect of the economic crisis, 2010 witnessed the recovery of the communication systems and endpoints market, with total sales rebounding due to improvements in general macroeconomic conditions and an overall uptick in enterprise IT spending.
Somewhat surprisingly, traditional systems made up 25.6 percent of total line shipments in 2010, growing from 9.7 million to 11.1 million line licenses year over year. IP systems (including converged and native IP) accounted for 74.4 percent of total line shipments, growing from 28 million to 32.1 million line licenses. But while TDM line license shipments grew in 2010, we do expect to see a decline in the coming years, as customers recognize the value of IP communications and vendors gradually phase out legacy TDM/KTSPBX systems.
The world enterprise telephony systems market generated $5.95 billion in revenue in 2010, 3.3 percent over 2009. The market is projected to grow modestly at a compound annual growth rate (CAGR) of 1.9 percent over the seven-year forecast period, mainly thanks to software-based solutions, cost-effective technologies like virtualization, UC and telephony bundles, advanced UC platforms like Microsoft Lync, and middleware architectures. That said, the continued focus on the implementation of cost-effective technologies is expected to slow the growth rate of total enterprise telephony platform revenues by the end of the forecast period.
Traditional systems made up 20.5 percent of market revenues, declining at a rate of 0.7 percent year-on-year. IP systems (converged and native IP) grew at a rate of 4.4 percent from previous year.
Finally, in terms of the TDM/IP mix, Frost & Sullivan believes that both IP line shipments and revenues will continue to considerably outpace TDM line shipments and revenues, with the share of TDM revenue shrinking to less than 7 percent at the end of 2017.