Cisco, Avaya Battle For Enterprise Voice Market - InformationWeek

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Cisco, Avaya Battle For Enterprise Voice Market

PBX equipment sales during the first quarter of 2010 surged for both providers, but neither took a decisive lead according to a Infonetics report.

Avaya and Cisco enjoyed surges in their PBX equipment sales during the first quarter of 2010, but neither firm managed to pull ahead from the other decisively, according to a report issued Tuesday by Infonetics.

Avaya enjoyed a big forward bump from its acquisition of Nortel Networks, but the acquisition still wan't enough for the firm to take over the lead from Cisco. Infonetics, which released the figures in its quarterly enterprise unified communications, VoIP and TDM equipment report, noted that each company posted its strongest PBX revenues since the end of 2008.

"We expected the acquisition of Nortel's enterprise assets to put Avaya in the clear lead for overall PBX equipment market share leadership," said Infonetics directing analyst Matthias Machowinski in a statement. "While Avaya did receive a nice bump this quarter, softness in the acquired Nortel business combined with strong results by Cisco meant that Cisco and Avaya essentially tied for revenue market share."

The overall manufacturer revenue for PBX and key telephone systems (KTS) reached $2 billion in the first quarter. The market segment, according to Infonetics, has been growing in recent months and is up 7% year-over-year from the year-earlier quarter.

Machowinski said IP phone shipments continue to recover from their low point set in the first quarter of 2009 as shipments jumped 32% to 3.9 million phones shipped in the latest quarter. In spite of those gains, recent sales are temporarily down due to promotions that have expired.

"This unfolding battle (between Avaya and Cisco) will be interesting to watch over the coming quarter as both companies bring certain strengths and weaknesses to the table," Machowinski added.

Avaya purchased Nortel's Enterprise Solutions in bankruptcy proceedings for $900 million in 2008. The Nortel unit had recorded annual revenues of $2.4 billion earlier.

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