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Replacement Sales Drive Enterprise Telephony Market
09/07/08
Natural
replacement is the driving force for new deployment in the current
installed base of the world enterprise telephony market. Greenfield
sites are leapfrogging to IP systems.
New analysis
from Frost & Sullivan called ‘World Enterprise Telephony Markets’,
finds that the market shipped more than 48.4 million lines in 2007
and estimates this to reach 62.1 million in 2013.
"Replacement
continues to be the main driver for market growth and, more
specifically, IP telephony adoption," says Frost & Sullivan Unified
Communications Program Director Elka Popova. "Around 71.7% of all
lines shipped worldwide in 2007 were IP-capable."
Central
America/Latin America is the fastest growing region followed by Asia
Pacific. Both these markets have strong replacement activity in
addition to greenfield deployments arising out of broad-based
economic growth.
North America
had the slowest growth, signifying high penetration levels of IP.
For the first time, IP telephony revenues exceeded TDM telephony
revenues in APAC in 2007. EMEA remained the largest region in the
world enterprise telephony market. Amongst tier-1 vendors, Cisco
experienced the fastest growth.
However, IP
penetration to the desktop remains low overall with North America
boasting a relatively higher penetration than the other regions. A
major challenge for IP telephony vendors is the fact that buying
organisations prefer phased migration to forklift upgrades.
"Vendor
consolidation might affect market confidence," cautions Popova. "A
weakening supplier position will boost buyers' power, even as strong
indications emerge of a price decline."
Vendors are
migrating from hardware to software models to preserve margins and
improve competitive positions. They are increasingly relying on
off-the-shelf hardware components in order to lower the cost of
their solutions and to be able to focus their efforts and resources
on advanced application development.
Nick Gibson, editor
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