There have been several distinct enterprise communications eras since the first digital switching systems arrived on the scene more than three decades ago. For a quarter-century digital PBXs dominated the market for enterprise communications systems. Digital PBXs were available with a choice of applications options throughout the years, including: voice messaging and IVR systems (beginning in the early 1980s); fully integrated enhanced contact centers (beginning in the late 1980s); and wireless handsets and CTI (beginning in the early 1990s).
The IP telephony era dates from the beginning of this century and has seen several more application options added to the list, including mobile cellular extensions and Unified Communications (UC). UC has since become a catch-all shorthand term for virtually all communications solutions, and now includes core telephony functions such as dial tone, according to a growing number of system suppliers. At the close of this decade, the distinct line between a standalone IP telephony system and the optional peripheral UC server is beginning to fade as we enter yet another enterprise communications era.
The key questions currently confronting customers, suppliers and dealers alike are: how will the new era be defined, what communications product/technology trends are reshaping the market, and who will be the market leaders (and market losers)? Unfortunately, there are no clear cut answers to any of these important questions, but it is advantageous to speculate about how enterprise communications will continue to evolve and what possible scenarios are likely to play out. The only sure thing is that market dynamics will change, not stay static, during the next 10 years.
The Next Era: Federated Communications
The IP telephony era matured rather quickly during the past few years as peripheral UC options became a more integral, almost standard, component of the customer enterprise communications system. The first full-featured converged telephony/UC offering was the Siemens OpenScape UC Server that integrated two Siemens standalone products, HiPath8000 and OpenScape, into a single, seamless solution running on the same control server. Mitel also introduced its Mitel Communications Suite (MCS), a pre-integrated unified communications (UC) solution that allows Mitel’s flagship 3300 IP Communications Platform (ICP) software to reside on a virtualized Sun Microsystems server along with other Mitel voice and API applications. Microsoft OCS is yet another example of an integrated telephony/UC solution.
A key element of unified communications is federated presence management. Federated presence management allows system users to control all aspects of their communications with other users, regardless of the make or platform of the devices. The initial application has been Instant Messaging (IM), but the concept can also apply to the seamless flow of bearer and control signaling transmission between: competing supplier systems; customer premises products and network-based services; and business and consumer solutions.
Federated Communications is true interdomain communications without boundaries and restrictive firewalls: It is the act of unifying discrete communications components and solutions into a single seamless solution, with each participating component/solution maintaining control of its unique operations, though there are centralized unifying elements governing transmission. A few prominent examples help illustrate the Federated Communications concept:
* Multi-supplier: The recently announced Avaya Aura Session Manager uses SIP services to network Avaya IP telephony systems with offerings from Cisco Systems, Nortel, and Siemens;
* Premises-to-Network: Cisco Systems’ hosted Webex Connect service is designed to work seamlessly with the company’s enterprise Unified Communications solutions;
* Business-Consumer: The ubiquitous Apple iPhone can operate as either a mobile telephone extension behind a customer premises IP telephony system, as well as a consumer wireless communications device.
Federated Communications expands enterprise communications across individual corporate domains and carrier service networks. It is not limited to voice communications, but includes data, text, graphics, and video. Intelligent communications will be available to station users regardless of location or network access device. This is certainly not a new concept, but it’s one that is actually doable.
Key Product/Technology Trends
Several important product/technology trends will influence the look and feel of enterprise communications during the next few years. They include, in no particular order of importance:
* Cloud-based Services
* Commercial Off-the-Shelf (COTS) Hardware
* Free Software
* Alternative Communications Terminals
* Telepresence
Cloud-based Services
The continuing movement towards cloud-based services is not limited to enterprise communications, but also applies to the most basic of computing applications. Leading players include Google (of course), Cisco Systems, Amazon, Oracle (Sun), and IBM. Microsoft, the company that dominates desktop-centric software, is also planning on being a major presence in the Cloud, having announced several initiatives based on its Windows Azure platform.
Hosted network-centric services are not new to the enterprise communications market. Many of us old-timers still remember the time when the most advanced communications offering for enterprise customers was Centrex service from the local telephone operating company. Centrex, supported by the local Class 5 central office switching system, was the AT&T flagship solution for enterprises until the company’s first stored program controlled PBX system, Dimension, gradually replaced it beginning in the latter half of the 1970s. Time-shared network computing services, such as Tymeshare, also offered an alternative to premises-based mainframe computers several decades ago, supplanted by the rapid growth of personal desktop computers and LANs in the 1980s.
Cloud-based communications, often referred to as hosted IP telephony services, has until recently lacked a major advocate behind it. Most customers who have signed up for hosted IP telephony services have been small businesses, and the service providers offering it have also been relatively small concerns compared to the brand name premises communications system suppliers. A few years ago Avaya made a splash when it announced plans to host IP telephony, messaging, and customer contact center services, but the initiative petered out quietly.
The Cisco acquisition of Webex likely marked the change in the market dynamic, and the company’s announcement last Fall of Webex Connect was a major step forward for Cloud communications. A few months ago at VoiceCon Orlando 2009, Siemens Enterprise Communications announced its plans to partner with Amazon to test the on-line retailer’s EC2 Web service for bringing OpenScape Voice and UC solutions to enterprise customers.
Although Google has been a peripheral presence in the enterprise communications market, the leading on-line search engine company appears to be ramping up for a future market entry. Google has been expanding distribution of its Google Talk service and recently announced development of Google Wave for unified communications services. Google's new Chrome Operating System is yet another strategic initiative to shift computing and communications from the customer premises to The Cloud: Google is projected as a potential major player in communications by a number of industry analysts, including myself (see below). There is no doubt Microsoft is closely tracking Google's plans and objectives and will likely offer its own OCS solution as a Cloud-based communications service sometime down the road.
Cloud-based communications services could potentially obliterate traditional enterprise communications solutions in the not-too-distant future. Just as the evolution of the Internet and the worldwide Web changed the complexion of the computing market, it can as easily do the same for communications services.
COTS Hardware
Commercial Off-the-Shelf (COTS) hardware was slowly creeping into select suppliers’ enterprise communications system design for several years, but is now almost ubiquitous across the industry. COTS hardware would include: servers for generic software, i.e. telephony features/functions; control/media signaling functions; Applications Programming Interface (API) requirements and optional applications packages; media gateways for analog, digital and SIP endpoint connectivity; SIP desktop telephone instruments; and PC terminals for soft clients. We will soon reach a point where the only proprietary deliverable from a system supplier will be software on a CD or downloaded from a password-protected website.
Traditional PBX systems were based on all-proprietary hardware equipment that was costly, expensive to maintain, and often cumbersome. IP telephony design eliminated the requirement for embedded switching functionality, relying instead on third party LAN switches for connections among stations and/or trunks. Standard analog communications devices, e.g., 2500-type telephone instruments, and trunk service interface requirements, e.g., PRI and SIP, allow for third party media gateway equipment at significantly lower prices than traditional integrated port circuit boards. Common control functions have also shifted from integrated circuit boards to proprietary call/media servers to third party servers from a variety of sources (IBM, HP, and Dell the most prominent). The number of physical servers required to run different software programs is also shrinking thanks to virtualization, a major product design trend in the computing industry that is highly beneficial for communications systems.
The combination of COTS and virtual processing offers customers several advantages, including: lower upfront capital costs and ongoing maintenance expenses; a far more flexible system hardware design option; greater choice of hardware equipment solutions from more system component suppliers; and faster implementation of new, improved system design. Reliance on proprietary hardware from a single source supplier will be left in the past. Customer options, such as the ability to replace power-intensive equipment with new, more efficient COTS equipment at a reasonable cost, will ease the burden on the pocketbook and also comply with Green initiatives. Companies will also be able to standardize on data center equipment for both computing and communications applications.
Free Software
Free software is the counterpart to COTS hardware to reduce overall system costs. The most prominent type of free software is open source, and the most popular is Linux. It has become the most widely used operating system platform for IP telephony system communications servers, not because of cost because of its suitability for real time applications.
The most widely disseminated open source software for enterprise communications features/functions is Digium's Asterisk. Although an advantage of open source software product is to lower costs to customers, the primary advantage is the ability for its users to develop and enhance the software to better satisfy individual customer communications requirements. Users have a strong stake in the evolution of open source software code and collectively have the potential to accelerate the creation of new features and functions, including management and monitoring operations.
Free software is not necessarily open source software. Free software may be proprietary and once have had a price tag, but is now available to customers at no cost. The term free software can also apply to individual features that were once optionally priced, but are now included as part of the standard generic software package. There are many examples of long-ago high-priced software options that are now provided at no additional cost with the standard enterprise communications system offer, dating back to Least Cost Routing (LCR) and Call Detail Recording (CDR). Automatic Call Distribution (ACD) was once a high ticket item, but more than a few currently available IP telephony systems include ACD with basic reporting as a standard feature. More recently, individual user licenses for cellular extensions originally priced at $150 or higher are now bundled into the standard generic software for several IP telephony systems, such as Avaya's Aura Communications Manager Enterprise edition and Siemens’ OpenScape UC Server. Avaya, in fact, has bundled several UC software license fees that collectively once cost customers hundreds of dollars per user as standard capabilities with its Enterprise edition solution; Aura Session Manager for enhanced SIP trunk services is also available at no cost to Enterprise edition customers.
The current Avaya pricing strategy was developed as a response to the Cisco Unified Workspace Licensing (CUWL) plan that bundled several once-optional license fees for a variety of enhanced features and functions with basic call control. Cisco Unified Communication Manager (CUCM) Standard edition includes call control, voice messaging, unified clients, mobility, and presence; Professional edition includes all Standard capabilities plus mobile communicator client, audio, video and web conferencing, contact center capabilities and other advanced features, in an attractively priced package. Cisco also provided its dealers with major discount incentives to market CUWL instead of its earlier a la carte pricing schedule. It must be noted that neither Avaya nor Cisco includes the multiple servers necessary to run some of the features and functions included in the software bundles.
Google, of course, has shown that its approach to free software can be highly profitable. Google leverages its free software strategy in the Cloud to sell advertising for its search engine and make an attractive profit. IP telephony system suppliers have lowered prices for enhanced UC-type licenses as a means to sell the core system. Avaya and Siemens each hope to retain large installed bases through their software giveaways; Cisco hopes to expand its base at the expense of the older market competitors.
An excellent new book by Chris Anderson is called Free: The Future of a Radical Price, making an argument that in the digital marketplace the most effective price is no price at all: Free-priced items are typically cross-subsidized by highly profitably priced items--like Gillette giving away free razors to sell blades, wireless service carriers subsidizing smartphones to sell enhanced communications features and functions, and cable operators enticing new subscribers by giving away wireless routers and waiving installation fees.
Enterprise communications system suppliers have come to realize that customers hesitate paying a high cost for UC software options and that the name of game is to sell the core telephony system as a means to create a future revenue stream through upgrades (hardware and software) and services (maintenance and professional). Free software is an enticement to retain or gain customers. Most of the supplier cost for the free software is tied up in R&D expenses that may now be viewed as a marketing/sales expense.
Alternative Communications Terminals
The days of the expensive, high function desktop telephone instrument have peaked and alternative communications terminals will soon be the primary interface to the enterprise communications system for a majority of station users. Mobile communications devices (that are just as much computing devices as telephony handsets) and PC soft phones are coming on strong. Using these terminals as alternatives to the desktop telephone instrument can lower enterprise communications system costs (capital and ongoing expenses) and increase user productivity. With the increased use of UC features and functions dependent on a computing-type terminal for an optimal applications experience, it makes sense to reduce dependence on the vestigial desktop telephone.
Almost every white collar worker has a mobile communications device and PC terminal of some kind. With today’s user friendly GUIs it makes sense to lessen reliance on IP telephone instruments and leverage the alternative endpoints. The younger generation of workers who have grown up with cellular telephones and PCs will certainly prefer this market dynamic. If a desktop telephone will be deemed necessary as backup for emergency situations when cellular coverage is not available and there is a PC/LAN failure, then access to a basic, low cost instrument, such as an analog telephone, will suffice. The analog telephone that outlasted digital instruments may also outlast desktop IP/SIP telephones in the workplace. It may prove to be invulnerable to the changing dynamics of the times due to its low cost, ease of use, and large installed base.
Many salaried white collar workers and professionals in most vertical markets find themselves away from their personal desktop work area more often that they are there. For example, salespersons are infrequently in the office workplace, and a variety of station users, such as those in the health care and hospitality markets, are not usually tethered to a desk. Teleworking, whether at home or on the road, is also on the increase and a desktop telephone instrument may not be an acceptable or reasonable solution. Smartphones and PC soft clients (especially using the new mini netbooks) are the smarter solutions as mobile communications devices.
There will remain a strong market for desktop telephone instruments for many more years, but shipments will gradually decline until a plateau is eventually reached far below today’s shipment levels. Station users from the older generation may still be partial to the traditional communications method and some customers will be wary of using the newer alternatives for many of their station users for a variety of reasons, such as security, quality, or ergonomics. Station users who work primarily at desktops may also prefer the old fashioned desktop telephone option for their voice communications needs. But mobile communications devices and PC soft phones have arrived and will proliferate at an accelerating rate at the expense of the traditional desktop telephone instrument. Notice that there are no traditional telephone instruments in the world of Star Trek.
Telepresence
The general idea of today’s video communications solutions can be traced back to 1930s movies, such as Charlie Chaplin's Modern Times or the Buck Rogers in the 25th Century serials. Those who attended the New York City World Fair in 1964/1965 likely remember the infamous AT&T videophone that required a high speed 6 Mbps service circuit (beyond the price range of even millionaires at the time). High quality videoconferencing systems in the 1970s required use of satellite transponder service, and offerings in the 1980s were generally of such low quality (jerky picture transmission out-of-sync with the voice transmission) that executives were turned off to the application for many years. Only during the past few years has video communications re-emerged as an acceptable alternative to in-person face-to-face meetings, with the arrival of current-day telepresence systems that rely on high definition screens/monitors and in-place broadband networks.
No company has done more to promote telepresence than Cisco Systems. Cisco has the product, market presence, and most importantly, the money to promote the application. There are other telepresence suppliers, such as Polycom and HP, but none have run a series of television commercials or employed product placement in entertainment shows to the extent Cisco has during the past year or two. The benefits of telepresence are best summarized on Cisco's website, where it says that the relatively new communications offering “allows for immersive, in person communication and collaboration over the network with colleagues, prospects, and partners, even if they're in opposite hemispheres.” Cisco cites the following potential scenarios for leveraging telepresence:
* Corporate level: executive meetings
* Human resources: job interviews
* Customer service: troubleshooting of technically complex products and access to remote experts
* Sales: presentations and demonstrations of products and services
* Design: collaboration between teams with expert involvement as needed
* Consulting: interaction between outside vendors and clients
* Staff meetings: regularly scheduled updates of projects between personnel at remote sites
The benefits the Cisco website lists that can be derived from telepresence include:
* Reduction of travel costs by connecting at a moment's notice with customers, partners, and co-workers
* Maximizing expertise by making the right resource available at the right time in the right location
* Building trust, understanding, and relationships across distances and cultures
* Fostering of innovative collaboration by having stakeholders sit at one virtual table
* Speeding up time to market by making decisions faster and smarter
* Improving the quality of life and morale by gaining leisure time
* Making the organization "greener" by using technology more effectively and traveling less
Earlier generation videoconferencing solutions were too often unreliable, of low quality, difficult to use and manage. Today’s telepresence solutions, including those from Cisco and Mitel Networks, are more fully integrated with the IP telephony system and controlled from a desktop telephone instrument or PC soft phone. The IP network provides acceptable service quality, reliability and security for every video call. The initial price for multi-seat telepresence solutions was beyond the range of many customers, but has been declining as the technology matures and smaller, more personal models are added to the product lines. Cisco envisions the day when telepresence will be ubiquitous in homes; long before that occurs, telepresence will be a standard element of the enterprise communications ecosystem.
Tomorrow's Competitive Landscape
We have learned from business history that more than a few of today’s market leaders will likely drop down a few rungs of the market share ladder, fall to the back of the pack or disappear from the scene entirely (see General Motors for evidence of this phenomenon). Yesterday’s market leaders in the enterprise communications sector have been usurped by Cisco less than a decade after the data communications network supplier turned its attention to voice communications. The next competitor to watch out for is Microsoft, because the dominant supplier of desktop software intends to make OCS as ubiquitous among enterprise customers as Windows, Exchange and Office are today. And coming in behind Microsoft appears to be Google. We are in the midst of a dramatic paradigm shift in the competitive landscape of the enterprise communications market, as the traditional suppliers of telecommunications systems dating back to the beginnings of the 20th century and earlier are in danger of extinction.
The current competitive landscape for enterprise communications systems is multi-tiered. Excluding suppliers, such as Toshiba and Panasonic, who primarily target small business system customers (less than 100 line stations) and including those who primarily focus on larger customer installations, the top tier suppliers based on revenues include several of the world's best-known companies: Avaya (augmented with its recently-announced acquisition of Nortel Enterprise Solutions), Siemens Enterprises Communications, NEC Unified, Cisco Systems and Alcatel-Lucent. The former two focus exclusively on enterprise communications customers; the other four have significant corporate revenue streams from the carrier market and in the case of Cisco and NEC, other high technology market sectors. Each of these firms last year had an estimated market share of at least 10% of global CPE line station shipments. Each also had annual enterprise communications market revenues exceeding $1 billion. Avaya is currently at the top of the group (tracking this year at an estimated $5 billion not including Nortel's $1.5 billion).
The second group of companies has corporate revenues approaching the billion-dollar level--Mitel Networks and Aastra Technologies. Each has an estimated market share hovering around the 5% mark based on global CPE line station shipments.
A third tier, companies with revenues of at least $100 million, includes ShoreTel, Aspect and Interactive Intelligence (ININ), among others. ShoreTel has made a name for itself in North America, but its global CPE line station shipment market share is under 1%; Aspect and ININ are both focused in the contact center market, although the latter also has IP telephony system products in its portfolio. Digium, the undisputed leader in open source communications software, does not disclose revenue data, but is most certainly under the $100 million level.
Microsoft has been labeled the next Big Threat to upset enterprise communications market equilibrium ever since it announced its first release of OCS. It took Cisco less than a decade, from the date it acquired Selsius Systems, to climb to the top of the market; Microsoft is expected by many to climb the competitive ladder at an even faster rate in the next few years, and do battle with Cisco for market leadership. Google’s entry into the market, following in Microsoft’s footsteps, is not guaranteed, but remains a scenario that must be considered in the long run. Google would take the Cloud approach as its strategic initiative just as Cisco leveraged its datacom dominance and Microsoft its desktop software dominance. Lead with your strength is always wise advice to follow.
Cisco currently remains the competitor to beat in any major sales case today. Its generic software features have come a long way the past few years and many of the architectural problems associated with the CallManager solution in the early part of the decade have been cleaned up. Cisco's marketing and sales efforts easily stand above those from the traditional PBX suppliers and its corporate vision for the enterprise communications market is to provide a complete solution to customers regardless of requirements. Leveraging its position in the LAN/WAN market, taking an early lead in Cloud-based offerings, and backed by a well-run organization with significant human and financial resources provides Cisco with a sufficient list of corporate competitive advantages for years to come.
With Cisco continuing to gain market share, Microsoft getting its feet wet as we speak, and Google looming around the corner, what does this all mean for the traditional competitors? Among the top tier traditional PBX competitors Avaya appears to be in the best shape to hang around the longest, particularly with its Nortel acquisition, which could, in the best case scenario, double its installed customer base, while significantly increasing market revenues and coverage; growth through acquisition may be its only option at this time. Avaya's product portfolio, considered by many to be the best in the industry, remains its primary selling point, but must be marketed better to optimize sales opportunities. The company has also been pricing its offerings more competitively of late, trying to shed its former image as a high-priced supplier.
Siemens, which was reportedly also in the running for Nortel, will have a difficult time recapturing market share in North America without several major deals to secure new, strong distributors (a Herculean task at the present time, because of the competition for prime "shelf space." The supplier’s long time Euro-centric approach to the market must show signs of change to compete in North America. Late arriving products for the North American market, always a step or two ahead of Europe in adapting new technology and applications, has been a Siemens staple for many years. With a current North America enterprise system market share equivalent to Rolm circa 1978, Siemens must better promote the relatively unique attributes of its OpenScape UC Server system--such as carrier-class design standards (capacity, redundancy, resiliency, reliability, security) and the only currently available fully-featured, converged telephony/UC software platform. Perception of the company has improved since Gores Group took majority ownership last year, creating a more acceptable market environment for Siemens products and services.
NEC has been a strong player in the North American market for many years, but its position at the high end has tumbled in recent years due to late product delivery and less-than-exciting marketing efforts. Although it has claimed global market leadership based on Gartner reporting data, I personally do not rank them that high and its North American numbers are stronger for small/medium systems than large systems. NEC's position in the market is relatively secure, but with a declining market share if Microsoft succeeds in its plans. NEC needs to ramp up its marketing efforts to leverage a strong product portfolio: If no one knows about your capabilities and solutions, do they really exist?
Alcatel-Lucent, though, is another story, because it has not been able to gain a strong foothold in North America since market re-entry almost 10 years ago. This is ironic, because if one excludes the North American market, the French-based supplier is the market shipment leader (with Siemens a close second). I believe there is a strong possibility that Alcatel-Lucent will sell-off its enterprise communications business and concentrate on the carrier market, especially for wireless systems; after all, Lucent has experience divesting enterprise operations. Who would be the buyer for the enterprise business? One company that comes to mind is Hewlett-Packard (HP), especially following the recently announced strategic relationship between the two companies for HP to market, sell, and service Alcatel-Lucent enterprise communications solutions through its distribution channels. HP has been ramping up its ProCurve networking business to compete head-on with Cisco, but lacks any enterprise communications offering or application solution to compete as an end-to-end system supplier. Cisco's plan to enter the virtual server market takes strong aim at a significant HP revenue generator, and HP may need to expand into communications to remain competitive in the overall IT market.
Mitel is the only leading enterprise communications system supplier in the North American market not to lose market share to Cisco during the past few years, even putting aside Mitel’s acquisition of Inter-Tel. Mitel, though, can no longer fly under the radar as it has done in years past, as it attempts to make further in-roads into the large systems market. Mitel must sell into competitive supplier installed customer bases, and that is not an easy task. It must also be careful to defend its own installed base against the likes of Microsoft during the next few years. On a global scale Mitel is smaller than the companies above it, but that can be a positive, because it can more easily change strategies and tactics as the situation demands. A strategic strength of the supplier is an industry-experienced executive management team that has been in place much longer than most, if not all, of its competitors; this is something I highly value when evaluating the competition. It's also the only competitor currently owned by its original founder, Sir Terence (Terry) Matthews. He has seen his company evolve from selling electric lawn mowers to UC applications, something no other industry leader can claim.
Aastra is a much stronger competitor in Europe, owing to its Matra and Ericsson operations, than it is in North America. With an annual North American market share less than 1% and a much lower profile than any of the other market leaders, Aastra may find it difficult keeping what it has in terms of installed customer base. The supplier has multiple product lines, which is expensive to support and develop, and has weaker distribution channels than many of its competitors, especially in North America. The company needs to greatly expand marketing operations, winnow down its product portfolio while providing migration paths to current generation solutions for existing customers, and carefully select its targeted vertical markets. Competitors are targeting many of the very large Intecom and Ericsson system installations currently in place, a situation that forces Aastra to migrate customers to current generation platforms at all costs. Aastra is a profitable company owing more to other products in its corporate portfolio, but will likely struggle to maintain its place in the enterprise communications market against the likes of Cisco and Avaya, not to mention the imminent threat of Microsoft.
Companies like ShoreTel, Aspect, and ININ have found success through niche products and market segments. ShoreTel customers typically have several small or medium sized locations that need to be networked together, an ideal configuration for the supplier’s IP telephony system offering. ShoreTel, though, is not as strong a competitor in the very large systems market or for customers who are looking at one or more enhanced application options, such as contact center and UC. The company’s revenues have been growing, but profits have not kept pace. Aspect and ININ are both strong competitors in the market for contact centers, but lack strong presence in the administrative telephony system market. Aspect's strategic relationship with Microsoft may lead to an acquisition down the road, because the current and near-future OCS solution lacks any semblance of enhanced contact center capabilities to compete against Avaya or Alcatel-Lucent's Genesys solutions in that highly profitable market segment. ININ has strong contact center and UC solutions according my annual consultant survey, but will likely remain a small, profitable niche competitor; there is no indication ININ wants to be acquired by a larger system supplier.
Fast-forwarding to the year 2015--how will the competition shape up? Cisco will battle Avaya for market leadership, assuming Avaya successfully completes its announced acquisition of Nortel ES; otherwise Cisco will stand alone at the top with Avaya in second place with a lower market share than today. Siemens will remain a strong global competitor (thanks to the continued minority ownership of Siemens AG), but with a lower market share than it has today. The Alcatel-Lucent enterprise unit will be sold and can possibly retain or increase its market share especially if HP is the buyer; if it remains with the parent company its market share will decline. HP’s entry into the market would be a major market milestone, but its future success is not guaranteed if it does.
Mitel will not be going anywhere as it continues to compete against its larger competitors and wards off Microsoft attacks. Mitel will again become a public company after an IPO if it maintains its market share, something that may prove difficult with an increased level of competition (Microsoft, HP, Google, et al) Microsoft will gradually pick up market share during the next few years and by 2015 be on the edge of the global top tier; it will have a more difficult time catching up to Cisco and Avaya in the North American market. Annual releases of OCS will significantly enhance the offering and position the company to catch up to Cisco before the end of the next decade if everything falls into place. Both Cisco and Microsoft will be offering both premises and Cloud-based solutions during the next few years and they will dominate the latter market segment; Google, if it enters the market with a full featured communications offering, may be able to join them by end of the next decade. Google is playing catch-up to Microsoft as Microsoft is playing catch up to Cisco.
Changes in market dynamics will continue to accelerate at a faster rate as we go forward. New competitors will come, and old competitors may go. Premises systems may be replaced by hosted solutions from the Cloud. Desktop telephones will disappear here and there. Mobile communications will play a more important role for the enterprise and video communications will become more widely used for two-party conversations and small group meetings.
Be sure to come back in about five years to see how much of what I wrote becomes reality.
