Let me count the ways, IP phones, lines, systems sold and revenue. How you count makes a difference. There seems to be a small group of pundits that work on this question. The market share has not only changed due to competition, but by acquisitions, with the latest being Avaya buying Nortel.I'd like to investigate this question--"Who is the biggest in the market?"--as well. Doug Green of the Telecom Reseller publications and I have an annual discussion on this subject. He sent the following information:
After enduring a year of shrinking revenues and unit sales, the telecom market has returned to growth. In Q3 2009, the enterprise telecom market revenues for lines, phones and applications grew at a pace of 4.4% over Q2. In Q1, sales fell through the floor, shrinking the market by 22%. The market finally bottomed out in Q2 and began expanding in Q3. In simple terms, as the frozen credit markets of 2008 began their slow thaw, the enterprise market gradually began to recover. In the months between, technology and economics played their parts in rearranging the market's key players.
"As Q3 ended," Doug continued, "here are the OEM standings, worldwide:"
In the North American market, where Siemens and Alcatel have more limited shares, Avaya (soon to be fully combined with Nortel), Cisco, NEC, Aastra, Microsoft and Mitel hold the top shares. Also notable would Polycom, Vertical and Shoretel. You will note the rapid rise of Microsoft in market share.
Doug's numbers are based on research done by Dell'Oro and Yankee Group.
The relative positions of the vendors change over time. The percentage market share also changes depending on what you count. Doug's analysis has the broadest measure of market share. The table above adds sales of phones, lines, systems and applications. If you only counted IP phones for example then Cisco would be the leader. The table also provides some interesting observations:
* Avaya is the largest vendor worldwide before the Nortel acquisition, contrary to some other pundits' analysis.
* Cisco continues to gain market share.
* Nortel had a smaller market share than most expected, not much different than Siemens and Alcatel-Lucent.
* Although Siemens and Alcatel-Lucent are not major vendors in North America, they are still a presence to be considered in the international market.
* Aastra seems to be a forgotten vendor. But with the acquisitions of Intecom and Ericsson, they are definitely on the list of vendors.
* Mitel appears to be relatively small but it must be remembered that Mitel is not in the large scale VoIP/IPT market. They sell smaller systems. Mitel has a larger share of the North American market, maybe as high as 9%.
* The "Others" market share is slowing decreasing.
* The company names not seen on the list does not mean they are to be ignored. The smaller vendors are selling many systems but for small enterprises. Their market share based on revenue will look smaller than the big players.
The "Others" category includes Vertical, ShoreTel and 3Com. What may happen with 3Com will depend on HP, who just acquired 3Com. HP appears to want compete aggressively against Cisco. 3Com, one of the oldest companies in the market, has lost much of its market share. HP could decide to invest in the VoIP/IPT products or drop the entire product line.
The companies that have been traditional key systems vendors have embraced the VoIP/IPT model and are delivering mini IP PBX products. Toshiba has expanded their offering to support 1,000 lines, thereby competing with Mitel, Shoretel and the Nortel BCM products. Vertical Communications with its own products and those that were acquired (Vodavi, Comdial and TeleVantage), and also Panasonic are additional members of the "Others". There continues to be a lot of competitive movement in the "Others" category.
The hardest part of the market to describe is the open source community of products. Since at least part of this space is offered free, how do you measure the market share when using revenue as a calibrator? At least one pundit appears to evaluate the open source community as owning as much as 18% share of VoIP/IPT systems. So, with all these players, there will be focus on the top 8 to 10 players but the "Others" category is still large at 22% and can not be ignored. If one looks at only small systems, I believe the market numbers would change considerably with several vendor names added to the list.
