Firms cautious in adopting IP

Deployment is still driven more by natural replacement cycles than cost savings or improvements in capability.

The need to replace out-of-date equipment remains the overriding force behind the takeup of IP telephony, according to a report from research house Frost & Sullivan.

The World Enterprise Telephony Markets report revealed that businesses’ natural replacement cycles are still the primary driver for adopting IP telephony. It also indicated that one of the largest challenges facing the channel is the staggered approach to adopting IP telephony favoured by many businesses.

The report also claimed that many hardware-focused vendors would increasingly move towards software models to safeguard margins.

Vendor ShoreTel’s EMEA managing director Mark Swendsen told CRN it is difficult to persuade businesses to take a leap of faith when it comes to IP PBXs. “It does not matter how great the total cost of ownership is or how cool the technology, if businesses have not outgrown their PBX it is nearly impossible to convince them.”

However, Justin Coombes, marketing manager for vendor Gamma Telecom, claimed hosted IP telephony could be sold on the merits of its cost and capabilities. “Cost is a prime driver for SMEs and hosted is a very attractive option for them. Also, many start-up businesses go straight into IP,” he said.

The report indicates that worldwide line shipments are set to pass the 50 million units mark this year and will top 62 million in 2013. Last year the global enterprise telephony systems market generated about US$8.37b and is expected to grow by 6.8 percent year on year.

EMEA was the largest market accounting for 44.7 percent of all shipments. Worldwide, Avaya was the top vendor by revenue while Nortel led in terms of shipments, but Alcatel-Lucent and Siemens were dominant in EMEA.

The report also claimed that continuing consolidation in the market could be a boon for consumers. Frost & Sullivan’s unified communications programme director, Elka Popova, said: “Vendor consolidation might affect market confidence. A weakening supplier position will boost buyers’ power.”

Coombes claimed smaller players could still differentiate themselves. “Customer choice will be based on services,” he said.

Swendsen added: “There will be accelerated consolidation. We will see substantial changes to the vendors. We will see fading stars, some supernovas burning up and the surface of this market will change.”