Analyst firm Frost & Sullivan found some reasons to be optimistic about the current global enterprise telephony platform and endpoint market after a gloomy 2009. That recession-riddled year was a bit of a write-off for the space, even if vendors did ship 37.3 million enterprise telephony lines, 12.6 million IP desktop phones, and 12 million desktop communications clients. But 2009 will more likely be remembered for its deep, double-digit revenue drops for almost all the major enterprise telephony vendors, and the death knell of one of the former leaders in voice gear, Nortel Networks, at least as we knew it.
The fall of Nortel signaled the end of an era and set alarm bells ringing for telephony providers, said Frost & Sullivan industry analyst Alaa Saayed. It was clear that change was imminent, and that new entrants and more dynamic business models would question the viability of established paradigms.
But even with the frank admission that the recession will likely last another 12 to 18 months, Frost predicts better results for 2010, at least in North America, while Europe should see growth in 2011 and 2012. A similar pickup in sales should come to Asia Pacific and Central and Latin America over the coming years, but these regions will probably have smoother transitions.
That growth will come from VoIP gear, which is expected to resume its pre-recession growth rates, partially due to a slightly improved economy, the move to hosted services, and upgrade opportunities as legacy systems reach their end-of-life. Softswitch systems, virtualization and unified communications will all help drive this growth, but TDM solutions will continue to take a hit.
The 2009 downturn would probably have been worse had it not been for major shake-ups in the industry landscape, including the HP/3Com and Avaya/Nortel Networks acquisition, as well as the emergence of more flexible IP telephony services, more aggressive customer programs, and a greater focus on expanding sales through the channel.
To ensure business progression in this scenario, participants must gradually shift resources from hardware to software (for both systems and endpoints), target the underserved small and medium business market with appealing solutions, tap into new global markets, and strive for interoperability as well as openness, Saayed continued.