Cisco Leads Enterprise Telephony Market: Report

While the enterprise telephony market is expected to face a difficult road in 2009, Cisco Systems is bucking the trend and has claimed the top spot in the enterprise telephony market for the first time, according to a recent study released by Infonetics Research.

According to Infonetics' report, Enterprise Telephony Worldwide Market Share and Forecasts, Cisco snagged the first-place spot for overall PBX-KTS equipment after growing its revenue 19 percent in the third quarter of 2008.

Avaya took a close second, posting strong quarterly growth and increasing overall PBX revenue 10 percent, the study said. Avaya now ranks second in worldwide PBX and IP PBX equipment markets. Nortel rounded out the top three.

Infonetics' report said Cisco's performance in the telephony market is better than the competition's.

"Cisco is the only vendor gaining significant market share in this market in 2008; most other vendors are holding steady or decreasing slightly," Infonetics said in a press release.

The overall enterprise telephony market grew 8 percent between the second and third quarters of 2008, reaching $2.6 billion, with pure IP PBX and hybrid PBX equipment sales up and TDM PBX equipment sales down, Infonetics found.

The report also revealed that the IP PBX segment grew 9 percent in revenue and 7 percent in phone lines between the second and third quarters; and year-over-year quarterly IP phone shipments rose 25 percent in the third quarter. Additionally, IP softphone shipments doubled, while the TDM segment will drop below the $1 billion mark for the first time.

"The enterprise telephony market more than likely will get squeezed during the recession, particularly in 2009, because one of the prime drivers of PBX sales is the creation of new businesses and the expansion of existing businesses, which are hampered during downturns," Matthias Machowinski, directing analyst for enterprise voice and data at Infonetics, said in a statement.

And while enterprise telephony could be hurt by the economic downturn, Machowinski predicted some segments will still thrive next year.

"There are a few bright spots, though, like the pure IP PBX segment, which is benefiting from new product launches, and IP softphones, of which we've seen a tremendous uptake in recent quarters, and which should weather the economic storm fairly well, with continued annual growth expected," he said.

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