In addition to the tremendous publicity surrounding the entry of Microsoft and IBM into the Unified Communications market, the past three years has also seen significant changes in the financing of the enterprise telephony industry (in no particular order):
- Avaya goes private
- Mitel (a private company) acquires InterTel (a public company) and stays private
- Shoretel goes public
- Siemens Enterprise goes private (since Siemens (public) holds only 49%, it'll be treated as an investment, not as a subsidiary)
- Digium, the home of Asterisk, acquires
These all signal that despite the new entrants, the enterprise voice solutions market is quite mature, and facing significant churn as Siemens puts it - in the transition from hardware to software competencies.
Nevertheless, don't count on this happening quickly. This kind of industry restructuring will take years and years to execute. For example, although VoIP has been around for a decade (Cisco bought Selsius in 1998) as an IP PBX service, hybrid digital-IP systems have been shipping strongly only recently. And large SIP PBX enterprise systems such as Nortel MCS 5100, 3Com VCX and Avaya's new distributed IP PBX haven't really taken off. They offer such great advantages over the classic site-specific systems.
New architectures take time.
Even more painful is to recognize the investment that USERS have made in learning how their enterprise voice service works. What '76' means to voicemail users and how to forward a call to a coworker are all indicators of the scope of energy / inertia that have to be overcome. That's why I don't think that industry consolidation has begun yet. Sure, industry refinancing. Consolidation? not yet.
I expect to see consolidation of assets and brands. Imagine a super brand like Oracle has become with its gobbling up of PeopleSoft, Edwards, Siebel and others. This company could offer lots of choices for ERP and CRM customers, and assure a solid businesses around each of them. It's not a consolidate and we'll save money by spending less on marketing between the two. It's about acquiring the CUSTOMERS. This is the new tactic required to survive in this stage of the industry lifecycle.
It's cheaper to acquire the competitor than to fight for their customers the old fashioned way.
That'll be the next wave of the market. Business cases that model Larry Elison and Oracle as a rollup. Question is: who wants to grow?
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