Microsoft to upset enterprise telephony market

2007 will be an "interesting year" for enterprise telephony, according to market watchers who predict that developments including Microsoft's planned release of a unified communications offering will inject a "jolt or two " into the sector.

"A number of important developments are sure to inject excitement into the enterprise telephony market this year," said Matthias Machowinski, directing analyst at Infonetics Research.

"Microsoft is launching its OCS 2007 unified communications product, and the question on everybody's mind is what is the market impact?

"Will buyers abandon their PBXs in favour of a pure unified communications solution? We do not think so, at least for the short term.

"Also, vendor consolidation is heating up again. Inter-Tel and Mitel are planning to merge, and the industry is rife with speculation about a possible Avaya acquisition.

"And then there's ShoreTel's IPO, which is just around the corner. So this should be an interesting year for the PBX market."

Infonetics estimates that IP PBX system sales increased three per cent in the first quarter of 2007 compared to the previous quarter, and are up 76 per cent from the first quarter of 2006.

The analyst firm's latest Enterprise Telephony report said that traditional TDM PBX phone system sales posted a slight "bump up" in revenue in the first quarter of 2007 after five consecutive quarterly losses.

However, these devices are expected to continue their overall decline, racking up a five-year compound annual growth rate of minus 45 per cent from 2006 to 2010.

Infonetics predicts that overall enterprise telephony revenue is on track for another year of double-digit growth.

In the first quarter of 2007, worldwide total PBX/KTS system sales inched up one per cent sequentially, and are up eight per cent from a year ago. The overall market is expected to total $11.9bn in 2010.