Cisco Powers North American Business Communications Market Growth In Calendar Q3

Total Market Share Greater Than Expected Combination of Avaya And Nortel Enterprise Solutions

Parsippany, NJ 11/30/2009 01:00 PM GMT (TransWorldNews)

According to new research from industry analyst firm IntelliCom Analytics’ IntelliCom Market Performance Dashboard Third Quarter 2009 Report, a particularly strong performance by Cisco helped drive a 12% overall increase in North American Business Communications market spending in the third calendar quarter of 2009. While other top providers turned in mixed Q3 results, Cisco outpaced the overall market by more than a factor of 2, posting a nearly 27% increase over second quarter 2009 levels. These figures are based on total manufacturer product revenues associated with premise-based communication platform hardware, end user devices, and call control, messaging, contact center, converged conferencing, and packaged Unified Communications software applications.

“Considering Cisco’s broad networking and collaboration focus and overall stability, it is not surprising to see them benefit the most from any early signs of market recovery, particularly given the current uncertainty surrounding several of the legacy providers in this space”, stated Frank Stinson, Partner and Senior Analyst at IntelliCom Analytics.

According to the IntelliCom report, Cisco’s total revenue share of 28.7% was more than the combined value of its two closest rivals, Avaya and Nortel Enterprise Solutions, which accounted for 18.4% and 9.9% respectively of total Business Communications market revenues in Q3. This is particularly noteworthy given Avaya’s pending acquisition of the Nortel unit. In addition to leading the market in total manufacturer product revenue, Cisco’s revenue share was also greater than Avaya and Nortel combined in terms of communication platform hardware, end user device, call control software, and converged conferencing software revenues. From the standpoint of contact center software, however, a combined Avaya and Nortel would further bolster Avaya’s already dominant leadership position.

“While a successful integration of Nortel Enterprise Solutions would certainly help Avaya to close the gap with the market leader Cisco,” explains Stinson, “it appears that even in the best-case scenario in which all of Nortel’s existing revenue is maintained, the combined company would likely have come up just short of overall leadership in Q3. Additionally, because these two companies must officially remain competitors until the day the transaction closes and the combined company is able to articulate and begin executing its post-merger roadmap, the competition continues to take advantage of lingering uncertainty around which Nortel products and relationships are likely to carry forward.”

The report also showed that while Cisco and Avaya as a standalone entity were both up on a sequential quarter basis, they joined the remainder of the top 5 players in posting double-digit year-over-year declines, in an overall market that was down 23% compared to the same period last year. “While the sequential growth of this past quarter is a welcome sign, it is clear that the market is now stabilizing around a ‘new normal’ that is substantially below pre-recession levels,” added Stinson. “Although we are projecting modest year-over-year growth to resume as early as next quarter, it will likely be several years before we see volumes comparable to those before the downturn.”

The IntelliCom Market Performance Dashboard is a quarterly market tracking service that measures vendor performance across all layers of the Business Communications value stack. Key areas of focus include core telephony software, platform hardware, end user devices, and Unified Communications applications.

About IntelliCom Analytics

IntelliCom Analytics is a professional services and business research provider focused on the rapidly evolving intelligent communications market. With a broad set of competencies ranging from competitive assessments and benchmarking to highly targeted demand forecasts based on detailed embedded base analyses, IntelliCom Analytics brings a wealth of finely honed skills, expertise and market opportunity insights to client engagements. For further information, visit www.intellicom-analytics.com.