The Technology Report March 2013

8 Mar

This report provides a glimpse of the market dynamics, trends, what’s new and some insight into areas of opportunity in the IP PBX / Enterprise Telephony sector. The following is from analyst firms including Dell’Oro Group, Infonetics Research, IDC, Ovum, and CollabTel / CXO Reports.

The following is from the Dell’Oro Group based on Q2 & Q3 2012 from approximately 40 OEM’s:

IP   PBX Large

Sequential   Growth

Quarter   2 2012 / Quarter 3 2012

Revenue ($M)



Lines (000’s)



Units (000’s)



IP   PBX Small

Revenue ($M)



Lines (000’s)



Units (000’s)



During 3Q12, total PBX revenues increased 3% sequentially to $1.2B, along with Enterprise Telephony which also increased 3% sequentially to $3.0B. Enterprise voice application revenues grew 5% sequentially to $745M.

As always, I want to thank the folks at The Dell’Oro Group for their terrific support in furnishing the primary source of information above (and below).


IP Multimedia Subsystem Core Revenues Grew Over 80% Year-Over-Year, According to Dell’Oro Group

Beneficiaries Include Alcatel-Lucent, Ericsson, Huawei, Mavenir and Nokia Siemens

REDWOOD CITY, Calif. – March 7, 2013 – Dell’Oro Group, the trusted source for market information about the networking and telecommunications industries, announced today that while the overall Carrier IP Telephony market revenues declined 5% versus the year-ago period, sales of IP Multimedia Subsystem (IMS) Core systems were through-the-roof.  IMS sales were driven by operator capital spending on current as well as planned launches of the new Voice Over Long Term Evolution (VoLTE) service.

“VoLTE is creating both opportunities and disruption in equipment spending patterns. We expect a significant increase in VoLTE services in 2013, with as many as twenty operators carrying native Internet Protocol voice from handsets by year-end,” said analyst Chris DePuy.  “While IMS and Wireless Application Server spending accelerated in 2012, we expect further spending will be stimulated by the availability of VoLTE-capable handsets in the next several months.  Spending on certain wireline voice projects has been postponed as operators prioritize on wireless voice systems upgrades.”

The overall Carrier IP Telephony market, which includes devices used to serve both circuit switched subscribers and Voice Over IP (VoIP) subscribers, reached revenues of just under $2 billion.


Infonetics: PBX Revenue Falls Despite Demand; Unified Communications Vendor Battle Looming

Market research firm Infonetics Research released vendor market share and preliminary analysis from its 4th quarter 2012 (4Q12) and year-end Enterprise Unified Communications and Voice Equipment report: (Full report published March 4).

“Following two years of modest growth, the PBX market had a tough 2012. While shipments grew, competitive pricing pressure persisted, driving down worldwide revenues, exacerbated by Europe’s tough economic conditions,” notes Diane Myers, principal analyst for VoIP, UC, and IMS at Infonetics Research.

“On a brighter note, unified communications ended the year on a high note, led by Microsoft and its Lync platform,” Myers continues. “We expect the PBX market to move back into positive territory in 2013, with moderate growth in addition to continued strong adoption of UC applications by large and mid-market enterprises looking to improve flexibility and productivity.”


  • The global PBX/KTS market totaled $8.1 billion in 2012, down 4% from 2011; the EMEA region alone declined 10%
  • In 2012, the unified communications segment grew 8% year-over-year
  • North America and APAC were the regions to net positive revenue gains in the PBX market in 2012, growing a modest 2% and      1%, respectively over the previous year
  • Pure IP PBX licenses grew 11% in 2012
  • Cisco maintains its lead in global PBX/KTS revenue for the 6th consecutive quarter; Avaya and Siemens round out the top 3
  • Only 3 vendors in the enterprise telephony market posted year-over-year revenue gains in 2012: Cisco, Mitel, and ShoreTel
  • Infonetics expects fierce vendor battles to continue in 2013, particularly between Microsoft and Cisco in the unified communications segment


Cisco, Avaya, Siemens and NEC are the top PBX and unified communications equipment vendors for the full year 2012, reports Infonetics Research


EMEA Unified Communications and Collaboration Market Expected to Reach $11.7 Billion by 2016, Says IDC

MADRID, December 17, 2012 — According to a new study from International Data Corporation (IDC), the unified communications and collaboration (UC&C) market in EMEA will be worth around $6.9 billion in 2011 and $11.7 billion by 2016.

“IDC predicts a compound annual growth rate of around 10.9% in the next five years and believes that though we have seen moderate growth in the EMEA region, the recession will continue to have a knock-on effect on new shipments of UC&C technologies throughout the forecast period,” said Isabel Montero, senior research analyst, IDC EMEA Unified Communications and Collaboration. “We don’t anticipate an immediate recovery, especially if the eurozone were to dissolve. The current state of the economy is diverting businesses from making investment decisions in new IT technologies and as a result the cost versus ROI of such investments will be a top priority.”

The study also reveals that:

  • Of the major economies in the region, only Germany achieved double-digit growth in UC&C deployments      in 2012 compared with 2011. Germany grew 10.3%, and was followed by France (9.6%) and the U.K. (7.7%).
  • Russia, the Czech Republic, and Poland are expected to have the strongest CAGRs in the Central and Eastern Europe (CEE) region throughout the forecast period. This will be primarily driven by the replacement of traditional equipment with next-generation enterprise voice connections.
  • South Africa and Turkey will continue to be the leading countries in the Middle East and Africa (MEA) region in terms of higher deployment levels of UC&C technologies. Companies in these countries are starting to invest heavily in the replacement of existing infrastructure in order to be able to integrate UC&C technologies, with a special focus on videoconferencing equipment and collaborative applications.
  • Although we have seen moderate growth in the EMEA region, the ongoing recession will have a knock-on effect on new shipments of UC&C technologies throughout the forecast      period. The need for businesses to reduce operational costs (such as travel) will drive demand for collaborative applications such as conferencing applications, enterprise social software platforms, and      videoconferencing / Telepresence equipment.

One of the key challenges for organizations looking to adopt UC&C is identifying the right mix of UC&C technologies, features, and applications that are the most appropriate for their business needs and, more importantly, are the sources they would consider for UC&C deployments and expertise. “An equally important consideration, especially among larger organizations, is whether or not to develop a UC center of excellence [COE] within the organization,” added Montero. “This would be a designated group that brings together individuals from various areas of the organization — such as IT, business applications, lines of business, and customer services — to provide guidance and direction for UC&C deployment plans, project development, and ongoing usage. This group could be formed early on, ideally to gain experience and feedback from initial projects.”


Snippet from a recent 24-question vendor survey on Cloud Migration[1]

Question: What is the impact on channels for marketing, integration and customer support?

Interactive Intelligence’s Response:

Consistent with our premise business, our go-to-market strategy is to sell through a strategic mix of direct and indirect channels. We have two options for indirect partners to sell our cloud offering:

1. Referral partner – the partner identifies an opportunity, does the initial presentation, and turns the opportunity over to Interactive Intelligence for a referral fee.

2. Integration partner – as above, the partner handles the initial steps in the sales process. They then engage Interactive Intelligence in a joint selling effort and work collaboratively with us to ensure a successful implementation and customer experience.



IDC Worldwide and U.S. Enterprise Mobility Network Consulting and Integration Services 2012–2016 Forecast


“Services firms provide the essential guidance that allows enterprises to extract maximum business value out of their infrastructure investments while positioning them for future growth, agility, and competitiveness. Demand for enterprise mobility network consulting and integration services will grow at a pace of 18.4% over the next five years, driven by the enterprise’s desire for increased productivity and collaboration along with the ability to access data anytime anywhere in a secure fashion,” said Leslie Rosenberg, research manager for IDC’s Network Life-Cycle Services program.


What’s New:

Ovum finds Networking Start-ups Overdue for VC Rebound

London, 26 September 2012 – Since the financial crisis, venture capital (VC) firms have been giving much of their tech cash to mobile, social, and OTT start-ups, showing little interest in telecom. VC support for telecom infrastructure start-ups has dropped from US$796m in 2009 to just US$270m in the 3Q11–2Q12 period. In a new report, though, global analyst firm Ovum finds reason for optimism, concluding that “recent IPO and M&A transactions point to a rebound in VC interest in network infrastructure.”

While VC support for network infrastructure has declined, overall VC investments have recovered, growing from US$20.1bn in 2009 to US$27.8bn in the four quarters ended 2Q12. Some of the beneficiaries of this modest surge include Facebook, Groupon, Twitter, LivingSocial, Square, Lashou, Kabam, WhatsApp, and Spotify.

Matt Walker, Ovum Principal Analyst and author of the report, explains:  “A funding disconnect has thereby emerged between network builders and network users. Lots of innovation and venture capital is targeting the network users, such as mobile apps and OTT platforms. However, little of it is directly helping the network builders. With a weak start-up pipeline, the industry relies more on incumbent vendors to generate new ideas and products. Their budgets are bigger, but VCs are often better at funding ‘game changing’ ideas ignored by established vendors.

“Incumbent vendors’ internal R&D budgets are now nearly 90 times larger than VC investments in the sector, up from 30 times two years ago. This narrows options for service providers, who rely on both large and small vendors for innovation. The big vendors also need access to the start-up pipeline, to fill in gaps in their own portfolios through partnership and M&A.”

In response, service providers are getting more actively involved in funding and working with start-ups. Telefonica, Vodafone, Verizon, AT&T, KDDI, China Mobile and many others are now funding start-ups directly, often deploying products in the network or lab ahead of commercial availability. Earlier this month, Deutsche Telekom (DT) was the latest carrier to announce a new push on the venture side, revamping its T-Venture unit to foster purchase of majority stakes and accelerated disbursement of funds.

Walker adds: “Carriers really need help from suppliers, yet what they face is a vendor market in confusion. Most large vendors are now shrinking and reorganizing, even the Chinese suppliers. Several vendors are modifying business plans and selling assets in order to stay solvent. With the recent VC drought in networking, it’s not surprising that big telcos have become more directly involved in funding start-ups.”

Walker points out that, based on data from the PWC/NVCA MoneyTree Report, the “Networking & Equipment” share of total VC investments shrank to just 1.0 percent for the past four quarters (3Q11–2Q12), down from about 10 percent in 2003.

The good news is recent IPO and M&A deals do suggest that VCs are looking favourably on the telecom sector again, when telecom is defined broadly. For instance, VC-funded start-up Nicira Networks was recently acquired by VMware for US$1.26bn. “The tide seems to be shifting. With heightened investor interest and carrier need for solutions in such areas as small cells, network virtualization, and network optimization, telecom network infrastructure VC seems ripe for a rebound,” concludes Walker.




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