I was too busy yesterday to blog this news, but thought it was still important enough to mention. Yesterday, I received an email stating that Avaya, a traditional PBX manufacturer had "widened its lead in worldwide enterprise Internet protocol (IP) telephony revenues." The report showed Avaya as the #1 vendor in IP telephony revenue. This caught my eye for a couple reasons. One, I thought that Cisco, a traditional networking company that became a IP-PBX manufacturer, was the #1 vendor. Second, hearing how Avaya had increased its revenue lead made me wonder how much impact open-source IP-PBX solutions such as Asterisk are truly having on the VoIP market.After all, I would have thought by now that Avaya, Nortel, Toshiba, and other traditional PBX manufacturers would have "dips" in their revenue numbers due to inexpensive solutions from Digium, Fonality, Switchvox, and a ton of other low-cost Asterisk-based IP-PBXs, which rival the feature-set of more expensive traditional PBX solutions. As I mentioned in my Top 10 Reasons Why I love Asterisk, I'm a huge fan of Asterisk, which was founded by Digium's Mark Spencer. Although, I'm supposed to be an objective reporter, I can't help but root for open source solutions, including Asterisk.
Unfortunately, no Asterisk-based solution is a publicly-traded company, so that makes it difficult to track revenue from Asterisk deployments, which I have no doubt are growing. Now, this isn't to say I don't like Avaya, Nortel, Toshiba, etc. They have some great products that I've tested over the years. It's just fun to root for the underdog - the David over Goliath, ya know?
In any event, here's an excerpt of the release that went out yesterday showing Avaya continuing their dominance in VoIP. Any thoughts on this? Post a comment.
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Avaya Inc. (NYSE:AV) widened its lead in worldwide enterprise Internet protocol (IP) telephony revenues, according to Synergy Research Group's 2Q 2007 Enterprise Voice Market Shares Report. With this report, Avaya marks another quarter of leadership in this market, as more businesses around the globe evolve their voice networks to IP telephony. Avaya is a global provider of business communications applications, systems and services.
The report shows Avaya as the #1 vendor in IP telephony revenues (as defined by Synergy), with 25.4 percent of the global market for the second quarter of 2007. In addition, the report shows that Avaya retained its leadership position in the worldwide overall enterprise telephony market in revenue, with nearly 19 percent of the market in 2Q, more than 2 percentage points over its nearest competitor.
"IP Telephony continues to show strong global growth, with the overall market growing 22.5% in revenues year over year," said Jeremy Duke, president and CEO, Synergy Research Group. "Businesses see IP as an essential part of their strategy to operate more efficiently and productively. Our report shows Avaya continuing to extend its leadership position in terms of market share growth."
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Both Avaya and Cisco's value proposition is quietly eroding once you get below the "enterprise" classification.
They have had very little success penetrating the small to midsized business market, whereas Asterisk based solutions are thriving.
Also notable that both Avaya and Cisco have had to retrofit their products for SIP. Their claims of being "standards based" are misleading, as their product lines are still proprietary.
Where Avaya and Cisco are strong is in their incumbent installed base and healthy VAR channel.
For the open source equivalents, building a strong, well supported channel and spending $$$ on brand building is going to be critical.
Digium seems to be prepping for this.
I think the reason you're not seeing Asterisk-based solutions like Switchvox eat into Avaya and Cisco's revenues (yet) is most likely because we don't share the same customer base.
Most Switchvox installs are in the 30-100 seat range, below the range that Avaya typically operates in. They've made some stabs at the market with their peer-to-peer phones, but in general those are just so they appear to have a solution for the remote offices of their larger installs.
I really view our business as bringing enterprise level features to the businesses that are typically just ignored by companies like Cisco and Avaya and their resellers.
I agree with Josh. Change at the enterprise level occurs at a snail's pace, due to the process driven nature of large organizations.
The Tier 1's will continue to own this space, but they desperately want to break into the mid-small business sector, so they can achieve the incremental growth that comes with a successful foray into a non-traditional market.
The Tier 1 offerings I have seen from these companies, to date, are overpriced, difficult to administer, and do not address the needs of smaller companies.
Josh and Cory are both right on the mark re: the "enterprise" focus of Avaya, Cisco and their respective channels.
Both companies are ramping up SMB strategies, however, with product and channel initiatives. Cisco's UC500 and the Linksys One solution are a focus for them and Avaya is putting more effort behind IP Office and Quick Edition.
As for Avaya's claim to be #1, it's likely that ranking reflects enterprise customers and includes a wide variety of solutions (contact centers, messaging, conferencing, etc.) that go well beyond the IP-PBX segment. All the recent PBX data I've seen says Cisco is #1 in terms of new sales.
VoIP makes easy to call and talk to anyone. VoIP provides facilities to make calls over the internet. VoIP offers best call termination services,Internet VoIP phone service, reseller programs, VoIP PBX and Business VoIP Solutions.Through the VoIP we can make Free Calls easily.
Just because they have the most revenue does not necessarily mean they are the best vendor. There are a wide variety of options available now, and some of the new vendors are starting to improve their offerings and will soon be able to compete with Avaya.