Consolidation at the Top

UC

Given Avaya’s acquisition of Nortel and Cisco’s growing VOIP market share, it’s no wonder the UC market is dominated by a small number of large vendors. Among our participants, 62% identified Cisco or Avaya as their strategic partner for IP telephony, up from 55% in 2009. Much of the change is attributable to the collapse of Nortel. Cisco benefited slightly, gaining 3%, while Avaya picked up 4%. Smaller vendors benefited as well; ShoreTel saw their share more than double.

The news isn’t all that different for UC where just three vendors, Cisco, Microsoft and IBM Lotus account for 74% of those whom participants identify as their strategic UC partner. The big difference between VOIP and UC is the dominance of Microsoft. Thanks to the success of its Office Communications Server product (recently renamed “Lync”), nearly 38% of companies now view Microsoft as their primary UC vendor, up from 26% in 2009.

But the majority of Microsoft’s customers still look at OCS (and the Office Communicator desktop application) as an IM application that integrates at the front-end interface to existing phone and video systems, rather than as a full-scale replacement for the IP-PBX. Participants often cite Microsoft’s inexperience as a telephony vendor, its lack until OCS2010/Lync of a branch survivability capability, call admission control, or a broad set of end-point options other than softphones and USB-phones. While softphone use continues to grow (A whopping 70% of companies are increasing their deployment of softphones, while only 18% of firms have no plans to deploy softphones of any kind), most telecom architects aren’t quite ready to pull the plug on desktop phones for their users.

Nonetheless, an increasing number of IT leaders are planning to evaluate OCS/Lync down the road as a possible telephony system replacement. To fend off the Microsoft challenge, IP telephony vendors need to offer a compelling alternative to Lync, one that offers some combination of greater functionality, lower costs, or easier integration. Otherwise, IP telephony vendors run the risk of simply being the voice service accessed via Microsoft applications.

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