Microsoft and Cisco the big guns in battle-worn UC market

Analyst predicts vendor giants will be the silverbacks in the PBX jungle next year as pricing pressure continues

By Sam Trendall

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26 Feb 2013

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The telephony market endured a tough 2012 but is expected to bounce back this year, with growth fuelled by fierce competition between Microsoft and Cisco in the unified communications (UC) arena.

Figures from Infonetics Research reveal that the global worth of the business telephony market fell four per cent year on year to $8.1bn (£5.3bn) in 2012. Softness in Europe affected the EMEA market, where revenue declined 10 per cent, while North America and Asia-Pacific both posted modest gains.

The UC space was one of the market's bright spots, with this segment growing eight per cent in 2012. Sales of pure IP PBX licences were also on an upward trajectory, at 11 per cent. Diane Myers, principal analyst for VoIP, UC and IMS at Infonetics, claimed that the market had suffered from plummeting average selling prices last year.

"Following two years of modest growth, the PBX market had a tough 2012. While shipments grew, competitive pricing pressure persisted, driving down worldwide revenue, exacerbated by Europe's tough economic conditions," she said.

Cisco remained the world's leading telephony vendor for the sixth consecutive quarter in Q4 2012 and was one of only three players – alongside Mitel and ShoreTel – to post revenue growth. Avaya and Siemens placed second and third respectively. Infonetics expects the UC space to lift the comms market this year with the fight between Microsoft and Cisco being the most notable of a number of "fierce vendor battles".

"UC ended the year on a high note, led by Microsoft and its Lync platform," added Myers. "We expect the PBX market to move back into positive territory in 2013, with moderate growth in addition to continued strong adoption of UC applications by large and mid-market enterprises looking to improve flexibility and productivity."

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