IP-PBX Market: Microsoft's Doing Well...Cisco's Doing Better
Some market share numbers that will be presented at Enterprise Connect show a market that could be reaching a critical point.
Microsoft Lync--and specifically its very high-profile move into the enterprise voice market--is one of the hot stories in the industry as we head into Enterprise Connect Orlando 2013. But you know who's even hotter in the IP-PBX space than Microsoft?
It's arch-rival Cisco.
That's what I gleaned from one of the presentations that will be delivered at Enterprise Connect. Once again this year, our IP Telephony Market Update session is in the capable hands of a pair of market analysts, Peter Hale of MZA Associates and Jerry Caron of Current Analysis. Peter will present the market data, and Jerry will provide Current's deeper dive into each vendor's prospects.
This was the chart of Peter's that caught my eye:
This chart shows Cisco seriously racheting up its dominance of the PBX market, gaining 7 points of market share, at the expense of...everyone else. Nobody besides Cisco gained share in the North American market last year, according to MZA. Now, nobody lost much share, and some even held steady. But Cisco's gain is remarkable.
That's especially true when you look at Microsoft. On the one hand, Microsoft has accomplished the impressive feat of vaulting to a tie for third-place in the market in just a few short years of having a viable IP-PBX product. And as the recent Lync Conference in San Diego showed, this is a very dedicated, enthusiastic base; and few would deny that Microsoft is better-positioned with the enterprise buyer than almost any of the other players (maybe even better than Cisco), thanks to its dominance of the email/IM market.
When I checked with Peter Hale of MZA about these figures, he confirmed what I'd suspected: Microsoft did increase its raw number of shipments of IP-PBX stations in 2012 versus 2011. It's just that Cisco outpaced them, capturing a large market share gain off of a significantly larger base.
All in all, an impressive achievement for Cisco. Sort of.
In a way, saying that a company is the dominant player in the PBX market today is damning with faint praise, like IBM boasting about being the dominant player in mainframes in the early 1980s. You're capturing a market whose future is uncertain at best.
So how about the future of the PBX market? Take a look at this MZA chart that Peter Hale will be presenting, showing the above-100-stations market in North America:
There's one word for that market: Flat. Flat as far as the eye can see, like the road from Kankakee to Cairo in my beloved Illinois. Now, there's some minor growth coming in the IP share as the TDM base gets retired. But this is not a booming market.
So a really interesting question is--are we seeing the prelude to a Cisco-Microsoft duopoly? In a market that isn't growing to make room for everyone, are we finally at the inflection point where some vendors just can't make it? We saw it this past year--every point that Cisco took, it took from some other vendor. If Microsoft is better-positioned with the enterprise buyer than Avaya, NEC, Mitel, etc., then these vendors have good reason to be concerned. (Jim Burton posed this question recently: "Is It a Two-Horse Race?"
I should remind you that my quick analysis here is limited to the North American market, and focuses especially on the large (100+) segment. Peter's presentation has a bit more hopeful news for the global market--slight growth, some market share gain for vendors other than Cisco. But there's not much that radically departs from the picture I see here for North America.
I expect Peter and Jerry are going to have a lively session this year, and they'll get some very interesting questions and reactions to their presentation. If you're joining us in Orlando (and I hope you are), you should consider checking it out.