A new Dell' (News - Alert)Oro Group study recently emerged that had bad news for some parts of the telecommunications market in the second quarter of 2013. While the news wasn't universally bad, it was certainly a blow for enterprise telephony PBX, which saw a drop in its own revenues. But what was behind this drop, and what sector of the telecom market made gains instead?
The Dell'Oro Group study not only showed that the enterprise telephony PBX market took a hit, but also that the unified communications (UC) market made modest gains in that same quarter. Immediately, the losses in enterprise telephony PBX could be traced back to a combination of issues of seasons as well as a drop in spending in emerging markets, like those of Latin America and large parts of Asia.
That drop in spending, however—at least, according to the Dell'Oro Group—isn't all just about issues of the seasons. Indeed, according to the Dell'Oro Group's vice president of enterprise telephony research, Alan Weckel, the issue is much more systemic than cyclical. Weckel noted that the company believes that “the PBX market is under attack from a premises-based point of view, that hosted or cloud offerings are an area of growth when looking at enterprise voice from a holistic point of view.”
What's more, Weckel went on to note that customers in the industry seemed to be moving toward an operational expense (OPEX (News - Alert)) model in terms of spending, and are taking advantage of improved network infrastructure with concomitant increases in bandwidth. This is fueling expansion in both broadband data and SIP trunking, and these advances are making customers feel better about the idea of a UC approach. Weckel further noted the advances seen at 8x8 and RingCentral (News - Alert), as well as Shoretel acquiring M5, where combined the three companies saw over 15 percent growth compared to the same time in 2012.
The Dell'Oro Group also noted that installed bases were continuing a move to IP lines, and though there was likely still more time to come—another decade at the outside—major vendors in the field like Alcatel-Lucent, Shoretel, Siemens (News - Alert) and Cisco were seeing substantial gains. The top eight firms in the field alone represented 80 percent of IP line shipments in the second quarter of 2013.
There certainly have been plenty of gains in terms of IP lines and UC; broadband is available in more places and destabilizing elements in the market like Google (News - Alert) Fiber are likely encouraging more than a little development. In emerging markets, where this effect is most felt, the impact of expansion is likely even more pronounced. There have been those in the past who project that the landline phone is likely to be completely overthrown at some point, a victim of rapidly advancing technology, and with news like this emerging it's not hard to think that may be possible. But in the short term, the direction of communications seems clear enough: less PBX, more UC.