Vendors cling on to customers

Sluggish market means tough times ahead, warns analyst

Voice vendors are facing up to the tough task of retaining their customers, according to Sandy Fitzpatrick, senior analyst at market research firm Canalys.

"The telecoms market is not really a high-growth market. It can be sluggish, so vendors have to hang onto their customers for dear life and provide an upgrade path for future technologies, as well as good service," she said.

Fitzpatrick added that VARs need to acquire converged skill sets to survive as the market moves away from traditional PBXs. Meanwhile, vendors are becoming more predatory.

"Cisco has been particularly aggressive in the UK," Fitzpatrick said. "Avaya is strong in the UK, as is Nortel. Mitel is still small in Europe, but has been aggressive in the UK."

Enda Keneally, Mitel's director of channels, said the market was improving, with resellers being more enthusiastic about IP telephony (IPT).

"Resellers are proposing IPT installations to us more than we are proposing sales to them," she said.

But she added that the market was still tight. "We are coming up against Cisco more than we were six months ago," she said.

Other vendors, such as Nortel, have been responding well to the increased competition, Fitzpatrick said.

She cited its Global Customer Partner Initiative. "Nortel is trying to find new channels and firming up its existing customer base," she said.

Adrian Marsh, Nortel's director of business and channel strategy in EMEA, said spinning off direct sales arms, such as Damovo and NexteiraOne, into reseller businesses was beneficial.

"These firms can deal on a worldwide basis with multinational customers," he said.