A few words regarding the above market results are in order to place the competitors’ shipment results and rankings in perspective. Although it appears that Cisco and Avaya during the past few years have significantly increased the distance between themselves and Nortel, it must be stated that line station shipments for the two former system suppliers include data for small system models that some industry analysts, including myself, would not have classified as PBX systems a few years ago. Cisco’s Unified Communications Manager Express (UCME) and Avaya’s IP Office models are mostly purchased and installed as key/hybrid system replacements. UCME and IP Office have more moderate feature/function sets than the larger flagship IP telephony system platforms of each supplier. Nortel’s reporting data breaks out system shipments for its Business Communications Manager (BCM) platform separate from its traditional Meridian 1 and current generation CS 1000E platforms. BCM is classified as a key/hybrid system, yet it directly competes against the aforementioned Cisco and Avaya small system offerings.
If estimated Cisco UCME and Avaya IP Office line station shipments are factored out of the PBX market share equation, or if Nortel’s BCM shipments are factored in, the rankings would not change, but the gap between the three would greatly diminish. Although Nortel has been losing ground in the large enterprise system market segment, it has retained its market share lead for small systems based on continuing very strong shipments of its traditional Norstar and newer generation BCM models (both typically classified as key/hybrids).
Looking at the total CPE market by combining key/hybrid and PBX totals shows that Cisco and Avaya still retain the number one and two positions (with Avaya gaining on Cisco due to shipments of its Partner hybrid system) with Nortel in a much stronger third place position (see Figure 2).
First half results indicate that the three system suppliers will be battling it out for global market share leadership, although the trend line appears to favor Cisco. If Cisco’s established growth rate continues or even slacks off a little, the dominant data networking player is likely to sit atop the voice system leader board (based on line station shipments, only) by year’s end. Avaya will easily retain its global market leadership position based on product revenues (owing to its strength in high-priced contact centers), but should be concerned that Cisco is aiming to take this title as well in a few years.
The chart for Total North American CPE shipments shows Mitel is still in fourth place, but farther behind Nortel as compared to the PBX-only market. NEC’s strength in the key/hybrid market boosts the system supplier into fifth place, with Toshiba just barely edging out Siemens for sixth place based exclusively on shipments of its key/hybrid system models. Toshiba does not perceive itself as a PBX system competitor, although more than a few of the supplier’s system models compare favorably to many competitive enterprise-level offerings in terms of features and functions. Siemens hopes that its relatively new HiPath OpenOffice solution will reduce the supplier’s dependency on large, complex system sales to enterprise-level customers and help establish it as a viable small system competitor.
A more detailed look at the enterprise communications market, including critical, subjective competitor evaluations, will be presented during my upcoming conference session at VoiceCon San Francisco on November 11, 2008. The presentation will also address product trends such as the evolving federated communications server (FCS) class of product, and Microsoft’s emergence as a competitive threat to Cisco, Avaya and the other usual suspects. For more information and to register for the conference, head to www.voicecon.com/sanfrancisco.
Allan Sulkin, founder and president of TEQConsult Group, is also known as the Guru of PBXs. He is celebrating 30 years working in the telecommunications industry, has been a longtime contributor to Business Communications Review/nojitter.com, and helped found PBX in the 90s, the ancient ancestor of VoiceCon.
