Call Recording Featured Article

It's seldom good news to lead off with “the enterprise telephony market is set to shrink 20 percent,” but a few important caveats turn that from a disaster into a significant opportunity. The good news here, though, is that while the market is set for a decline, it's not going to be everywhere, and those who see it coming may well end up missing the worst of it.

Indeed, the enterprise telephony market is poised for that big drop, according to Dell (News - Alert)'Oro analyst Alan Weckel, but it's largely because enterprises are moving toward cloud-based solutions in larger numbers, away from the full-on premise solution. But even here, it won't be a total loss; companies like Avaya (News - Alert) and Cisco are still seeing growth, and may well continue to for some time as the companies sticking with premise solutions perform a degree of consolidation.

But the market will indeed fall, dropping from its 2007 peak of $16 billion to reach an estimated $10 billion this year before hitting $8 billion in 2019. Yet despite this, over the next five years, growth is likely in the IP phone field, as vendors ranging from the private branch exchange (PBX) like Avaya and Cisco (News - Alert) to the third-party firms like Grandstream and Polycom (News - Alert) carry on in this front.

Enterprises, meanwhile, will likely be looking at some cloud pieces, and keeping call control largely premise-based. Companies with employee counts measuring in the thousands, Weckel noted, aren't likely to go completely cloud-based. Though Weckel does look for plenty of cloud-based options coming into play for small and medium-sized businesses (SMBs) as well as the larger middle-sized companies.

Even analysts like ZK Research's Zeus Kerravala (News - Alert) are pointing this out, noting “If you're a vendor and you don't have a cloud strategy today, it will be too late. Now it comes down to how aggressively a vendor would be willing to cannibalize its premises-based business in favor of the cloud, how they compensate the channel and how they transition partners.”

It might not be too late already, but it likely will be soon. This is actually good news for much of the enterprise telephony market. It may not sound it, but it was bad news arrived so early that it's come back around to good news. It's providing the perfect opportunity to get in on a major market in the making: the cloud-based market. While it will be smaller, it will likely be so because the comparative costs against the premise market will be much less; which market would be preferable to enter, the one where 10 items are sold annually at $1 billion each, or the one where a billion items are sold for $8 each? The second market is smaller, but which has the best chance for success for a firm entering the market?

Naturally, every day that passes where a firm doesn't have a cloud strategy increases the likelihood that that firm will end up on the bad end of this trend, reduced to obsolescence and trying to compete with the likes of Avaya and Cisco. But knowing that can mean all the difference, and now companies have the necessary time and warning to get a cloud plan in place to take advantage of a whole new market.