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Cisco, Avaya Vie for Enterprise Voice

In a surprising result, Avaya and its recently acquired Nortel Networks voice assets did not deliver a clear knock-out punch to prime enterprise telephony rival Cisco. Instead, it appears the two are settling into a far more evenly matched competition for market leadership, according to a new Infonetics Research report on Q1 2010 Enterprise Unified Communication, VoIP and TDM Equipment. Most notably, the report found that Cisco enjoys only a slight lead in the overall enterprise telephony market for the quarter, due to a 25 percent bump in Avayas quarterly revenue after taking on Nortels enterprise solution business. Both companies posted their highest PBX revenue figures since the end of 2008.

We expected the acquisition of Nortels enterprise assets to put Avaya in the clear lead for overall PBX equipment market share leadership, and while Avaya did receive a nice bump this quarter, softness in the acquired Nortel business combined with strong results by Cisco meant that Cisco and Avaya essentially tied for revenue market share, although Avaya is ahead in terms of line shipments, said Matthias Machowinksi, directing analyst for enterprise voice and data at Infonetics Research. This unfolding battle will be interesting to watch over the coming quarter, as both companies bring certain strengths and weaknesses to the table.

Other report highlights include a 7 percent year-over-year gain from Q1 2009 for the enterprise telephony market after a disappointing first half of the year, with the greatest growth in PBX equipment coming from North America; and sales of unified communications solutions are temporarily down because of expired promotional efforts, though Infonetics predicts Cisco and Avaya will lead the market back to growth this year.


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