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The Big Picture at Virtual VoiceCon

I am scheduled to presenting the keynote presentation at the start of the upcoming Virtual VoiceCon on December 2, 2009. I will be covering several topics of interest during my talk, but perhaps the most important will be how the competitive landscape of the enterprise communications market is evolving and who will be the key players that the majority of customers will look to for guidance and solutions during the next decade. Cisco Systems is currently looked upon as the alpha dog of the market, though the Avaya acquisition of Nortel's enterprise business unit will certainly give them a major boost in terms of market share (installed base and annual shipments), product offerings, and distribution network compared to the traditional telephony system suppliers. Both Cisco and Avaya, however, need to keep a close eye on Microsoft in the immediate future and Google farther down the road.When Cisco entered the telephony systems market more than ten years ago with its acquisition of Selsium Systems, it was not the first time that a leader in a major IT market segment, LAN/WAN infrastructure, braved the rough waters of the voice communications market segment. Fifteen years earlier IBM, the undisputed leader in computers, bought out the remaining stake in Rolm. When this went down AT&T's greatest fears were realized, because they had to face a competitor equal in size and resources. Fortunately for AT&T and its current descendant Avaya, IBM flopped in the PBX business, eventually selling out to Siemens. AT&T/Lucent Technologies withstood the challenge of Nortel during the 1990s, and entered the new century where they spent all of the preceding century, as the leading enterprise communications system supplier in North America by a number of measurable statistics. When Avaya started off on its own earlier this decade it took the different view of Cisco than AT&T took of IBM by underestimating its new competitor and not protecting its installed base from forthcoming attacks.

As we are about to begin the second decade of the century we are again at a crossroads in the enterprise communications market, with Microsoft readying itself for a frontal assault on both Avaya and Cisco, as well as the other leading and not-so-leading system suppliers. Based on conversations I have had with virtually all of the currently established competitors, none are taking the Microsoft threat lightly. All remember how Cisco came from nowhere to somewhere in a relatively short time period. As I have written before, Microsoft has the potential to totally upset the competitive equilibrium of the market. Can they do it? Yes. Will they do it? That remains to be seen. And looming on the horizon beyond Microsoft is a potential competitor so young that they barely remember digital PBXs. I talk, of course, about Google. Google must expand its current market reach to continue revenues growth (and justify its extraordinary market capitalization), and the world of enterprise communications is as good a market as any to enter, as are the worlds of mobile smartphones and personal computer operating systems. Somehow they all seem to tie together when looking at the Big Picture.

Who else is out there that may get into the game? The HP bid to acquire 3Com may be seen as either an offensive maneuver or a defensive measure vis-a-vis Cisco. Either way HP gains access to 3Com's telephony system offerings and this automatically makes them an enterprise communications market player, if only for their responsibility to the installed base of NBX customers. IBM is already a market competitor, but not for core telephony systems. Though its Sametime Unified Telephony (SUT) was initially similar to Microsoft OCS 2007, the product's evolution has appeared to have stagnated as a full-featured telephony system solution: IBM appears to be willing to be a significant player in many of the adjacent markets, such as System Integrator and desktop collaboration productivity tools, but not as a replacement supplier for digital or IP PBXs. I don't think Oracle will make a move, although it does have in its portfolio a hosted communications solution, and though Dell has been mentioned as a possible market entrant, this is looking more and more likely not to happen. The two dominant network Service Providers, AT&T and Verizon, can certainly jump in feet first with Communications as a Service (CaaS) offerings, though at the current time they appear content to repackage and resell third party solutions, such as Cisco Webex Connect.

I hope you will be joining me and the other presenters next week for Virtual VoiceCon. It will be informative and a worthwhile occupier of your time. Best of all it is free, and we all know that everyone loves free stuff. See you then.