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HP partners say that is not the case. They say that since the 3Com acquisition and other big deals including the acquisitions of Electronic Data Systems and Palm, HP has been touting its ability to be the single end-to-end IT provider for customers and partners and even promote itself as the elite networking alternative to Cisco.
The HP VCX shift may simply be a matter of economics for a company comparing its meager market share position in the voice market beside the heavy costs of developing major adds on and upgrades for a small but loyal group of partners. 3Com first began offering VCX products through North American channel partners in January 2004, along with a then-new channel program for its IP products.
There are only about 50 solution providers actively carrying VCX products, and 400 who carried the former 3Com NBX IP networking lineup through its end-of-life announcement last year, according to a source with knowledge of the 3Com community. Partners tell CRN that average VCX deal size varies given the VCX product line's versatility, but deals in the $100,000 to $250,000 range for midmarket deployments (250 to 1,000 users) aren't unusual.
HP’s share of the voice market, based on the assets it acquired with 3Com, is quite small, and continuing to decline, according to market researcher the Dell’Oro Group, based in Redwood City, Calif. Alan Weckel, Dell'Oro's director, enterprise telephony and Ethernet switch market research, said the 3Com voice/IP networking portfolio was responsible for about $69 million in revenue in 2007, and will likely show about $32 million for 2010 – not exactly insignificant, but miniscule in the context of the $126 billion in sales HP reported for its fiscal 2010.
“This is not a large chunk of revenue to HP," Weckel said.
Weckel did not provide exact figures, and cautioned that metrics aren't the fairest way to judge market performance, but said that if the total PBX market is taken into account, HP’s market share is probably south of 1 percent, and in IP-PBX specifically, including vendors that are hybrid, it’s about 1.1 to 1.2 percent. By contrast, Avaya's acquisition of Nortel's enterprise unit in 2009 boosted its share to about 25 percent, and Cisco, in second place, commands about 16 percent, according to Dell'Oro.
It's a crowded market, with little-to-no wiggle room, Weckel noted.
"There are over 40 vendors in the the voice space and the top seven now account for about 80 percent of the revenue," Weckel said. "So there are more than 30 vendors trying to fight it out for 20 percent of the revenue. We're going to see a lot of consolidation and a lot of exits."
Weckel declined to speculate on whether HP would exit the voice market altogether – either by an end-of-life for VCX or sale of the portfolio – but admitted that the move wouldn’t surprise him.
“The voice piece has been in decline for years,” Weckel said. “I feel bad for the VARs, because they’re the ones who are getting squeezed. But the writing was on the wall before HP bought 3Com. The investment just wasn’t there. Remember that Cisco and 3Com got into VoIP right about the same time. Really, there’s just a different execution between where Cisco is now in VoIP and where 3Com is.”