Small PBX and IP PBX Market Lifted Cisco and Avaya Sales in 2010

When Avaya, the second largest PBX company, grew its North America market share by 46% in 2010, who would have expected the largest PBX manufacturer, Cisco, to grow its share by 18%?  Except they did, meaning, neither Cisco nor Avaya, both known to dominate the enterprise market for PBX sales, gave up market share to the other.  Instead, according to research conducted by The Eastern Management Group, these two arch rivals turned their attention on the small customer market and then took PBX sales and market share from other notable PBX manufacturers.

 

In North America small PBX sales account for about half of all lines sold annually according to Eastern Management.  Avaya and Cisco, by introducing new small IP PBX systems and telephone sets with very low list and street prices, were each able to capitalize on their brand, respected product portfolio, and strong two-tier distribution channel, to offer an alternative PBX solution to small businesses.  This strategy enabled both Avaya and Cisco, already dominant in the over 100 seat PBX market, to turn attention to smaller customers desiring affordable IP PBX systems.  Prior to 2010 neither Avaya nor Cisco offered inexpensive IP PBXs needed by small businesses.

In addition to introducing new PBX products at low street prices, Avaya led all PBX manufacturers in 2010 in the number of reseller and customer promotions offered, averaging far more than the industry average of 11 programs at all times according to Eastern Management research.  Avaya also ran numerous financing offers in 2010, which helped boost PBX line sales.  

ShoreTel, perennially a strong player in the small PBX market, with an average system size of 50 lines, grew its North America market share 14% in 2010.  Boasting a PBX product family renowned for low total cost of ownership (TCO), and high customer satisfaction ratings based on recent Eastern Management research, ShoreTel proved too tough for others to neutralize. 

Eastern Management expects the SMB market to be rich in opportunity for the next few years, with manufacturers developing increasingly inexpensive IP PBX systems and phones.  In addition, open source PBX appliances will continues to evolve, and hosted PBXs and cloud PBXs will likely penetrate deep into the small business market. 

About Eastern Management
The Eastern Management Group is one of the world’s premier strategic research companies.  We operate at the center of the global technology industry.  By delivering product research, market research and analytical tools to clients, Eastern Management facilitates decision making by IT Professionals and IT Vendors. Visit us at www.easternmanagement.com