• December 15, 2004
  • By Coreen Bailor, (former) Associate Editor, CRM Magazine

Cisco and IBM Lead the IP Telephony Market

Cisco and IBM are cited as the top two choices for IP telephony solutions to be deployed in the next two years, according to a recent study by The Yankee Group. The study bases its findings on 567 respondents who decide or influence what IP telephony solutions their companies purchase. Survey respondents were from U.S. companies ranging from organizations with under 500 employees to companies with more than 10,000 employees. The study analyzes 10 vendors in total: four hardware vendors (Cisco Systems, Avaya, Nortel Networks, and Siemens Information and Communication Networks); four service providers (AT&T, MCI, Verizon, and SBC Communications); and two systems integrators (IBM and Accenture). On a 7-point scale, with 1 denoting that the respondent definitely will not implement and 7 indicating that the respondent definitely will implement, Cisco earned the top slot with a score of 5.4, just slightly ahead of IBM, which scored a 5.1. A score of 4.7 tied Avaya, Siemens, and SBC for third, while Accenture and Nortel tied for sixth place with 4.5. Rounding out the list was AT&T with a score of 4.4 and MCI receiving a 4.0. According to The Yankee Group's Zeus Kerravala, enterprise infrastructure vice president and primary author of the study, Cisco is considered by most companies the "de facto standard" for networking equipment. The industry is seeing the person who makes the decision on what networking equipment to buy also making the decisions on voice technology purchases. "Cisco is taking its leadership and what it's done on the network side, [and] now that voice is becoming a network application it's extended that over to voice--so to me it wasn't that big of a surprise that it scored where it did," Kerravala says. What he did find surprising, however, was AT&T's ranking: "The brand was very well known...AT&T scored second, so everybody was well aware it had the solution," he says. "[But] it was second-to-last on deployment preference." Kerravala says that financial issues surrounding AT&T, and also MCI, may account for their lower showing. "I think that some of the macro issues around them led to their scoring somewhat poor in this," he says. "IBM actually scored eighth [in awareness], but when the chips came down--who would you actually deploy--IBM scored second and AT&T scored ninth, so I think what this indicates is brand awareness isn't going to lead to brand preference." Still, the variability between the companies landing in slots three through 10 isn't overwhelming. A mere seven tenths separate the third place vendor from that of the tenth place provider regarding deployment preference for the next two years. "It's a market that's in transition now and it's really open for anyone to take," Kerravala says. "Cisco and IBM showed up as leaders, but even their leadership wasn't insurmountable. The door is open for someone else to step up." Kerravala suggests that IP telephony solution providers concentrate more on making solutions work and less on what he refers to as the futuristic benefits of IP telephony. "A lot of the vendors have gone off on tangents and talked...[about] how it's going to revolutionize communication. The things that the buyers thought were most important were things like reliability, responsiveness, stability, quality, [and] security." He does think it's important to discuss future benefits, but, "in some sense the [vendors have] forgotten about the current industry." Related articles: 40 Contact Centers, One Platform
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