Pennies From Heaven

Pennies From Heaven

Maren Bennette

If the weathermen have got their forecasts right, Britain will be experiencing its coldest winter in many years when you read this article. As I write it the first snows of the season are closing roads across the country. However, the outlook for IP communications looks much better, with many industry commentators quietly confident that this is the year that convergence business really starts to heat up. The statistics would seem to support this optimism: Stephanie Watson at analyst company MZA reckons the market for IP extensions is set to grow by 40% in 2006 to represent almost 30% of total extension sales. The strongest growth is expected in the area of systems with less than 100 extensions, where IP extension sales are expected to grow by over 70%. Good news all-round and enough to banish to winter blues for a while!

All the major communications manufacturers share her optimism and are putting in place programmes to capture their “fair market share”. Investment in the channel is one area for focus on which Paul Morgan, director of channel sales at Siemens Communications and Jonathan Smith, VP of Ericsson Enterprise both agree. These European vendors are currently reviewing their go to market strategy and both expect to implement their new channel programmes early in the New Year. The North American players will also be making renewed attempts to woo the channel – which means that the channel will be on the receiving end of plenty of “pennies from heaven” in 2006.

Along with new channel programmes there will be the usual raft of new products coming to market as the weather changes for the better. Expect a major CallManager announcement by Cisco Systems in the early spring, to follow on from the Linksys One hosted IP telephony solution from Cisco’s SMB division announced in the US last November. L1, as it is known, will be hitting these shores later this year. Other

manufacturers won’t be leaving the field clear for the Californians: Nortel will be launching a new range of SMB products and Siemens have a number new Hi-Path server systems coming out soon.


Boxing Clever

Some manufacturers think that this year will not only be one of the best in terms of IP telephony systems and extension growth, but also one in which applications take their rightful place at the forefront of the drive towards convergence. Peter Tebbutt, Director of Sales and Marketing at Alcatel, says that the company’s new Eye-box ICT server family will usher in a new era of business productivity for users of the OmniPCX Office IP communications platform. Owen Bridle, CTO at Avaya, concurs. The Guildford-based technologist says that customers are buying into IP not because it’s IP – “after all, who cares what protocol is being used in the network?” – but because of the business critical applications which are enabled by a networked based voice service.

Another trend that continued through 2005 and will keep going in 2006 is the consolidation happening both in the channel. 2005 saw BT acquiring Skynet and TNS in the UK, and Cara in Ireland. This year expect to see many more acquisitions of smaller resellers by larger companies. On the manufacturer side of the equation expect more deals like the joint venture between Philips and NEC announced late last year.

On the technology front, SIP will be the developments to watch during the year. Ian Sherring, IP Communications Business Development manager at Cisco Systems, spoke of the advent of SIP as a viable alternative to proprietary protocols such as SCCP (also know as “skinny”). But he warns that SIP may be caught up in the traditional technology life cycle, wherein there is first the “hill of hype” followed by the “valley of despair”, before reaching the “plain of productivity” at which point


Stormy Weather

But there may be a cloud on the horizon though. It is considered by some that Microsoft’s entry into the IP Communications business could have the same disruptive impact that Cisco and 3Com did in the late 90’s with their pure-play IP telephony systems. Of course every cloud has its silver lining and Mitel’s EMEA MD Graham Bevington thinks that the Redmond giant will be a welcome entrant into the market, validating all the work that has been done by Mitel to date. Others such as Paul Templeton, VP of Enterprise Solutions at Nortel, agree and are positioning themselves as allies with Microsoft. Not surprising perhaps when you consider that Mitel, Nortel and Siemens Communications already have well-written MS stories to tell. Some other manufacturers (who didn’t want to be identified) aren’t so sure that Bill Gates’ interest in their business is such a good thing. We shall see.

PS. In my December article I stated that Cisco took the number one position for enterprise telephony endpoint shipments in Q2 2005. I should have made it clear that their leadership position was in the 100 lines and above segment – i.e. that it did not include the SMB market. My apologies to MZA.

Maren Bennette:
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