Clouds gather over PBX sector

Channel must find new ways to make money out of telephony as economic slowdown threatens to hit sales

Stormy times: VARs are being urged to find other revenue streams as credit slowdown takes effect.

Resellers have been urged to push unified communications (UC) and telephony applications amid signs the credit crunch will stunt PBX growth over the coming months.

According to analyst MZA, the UK PBX showed a four per cent year-on-year rise in total extensions deployed during the second quarter of 2008. All segments in the 2-30 extension market suffered double digit declines. This was offset, however, by modest growth across the 30-100 extensions market and rapid growth in the higher end of the market.

Duncan Clark, research analyst at MZA, said: “This was a solid quarter. Despite gloomy news about the general UK economy, the budgets for telecoms and IT spending have largely been set during a more optimistic economic period, which means that the impact of any economic slowdown could actually hit the PBX market either later this year or early next year.”

Nortel emerged as the UK’s top PBX vendor during Q2 with a market share of 16 per cent. Mitel, which was bolstered by additional revenue from recent acquisitions of Inter-Tel and Lake Communications, was in second place and led the sub-100 extensions market. Cisco was top in the more than 100 extensions arena.

“Marketing and sales efforts will continue to push the area of unified communications and PBX applications, as both manufacturers and voice and data resellers look for ways of holding up profits in a market where value continues to shrink year on year,” added Clark.

Forty seven per cent of extensions deployed during the quarter were IP, up 10 per cent on Q2 last year. Clark claimed that figure could reach 50 per cent this year, but cautioned that softness in the below-100 extension market could hamper IP’s rise.

“A quicker sales cycle in the below-30 extensions markets means that these price-conscious market segments can be more sensitive to the general economic mood,” he said.

John Combs, chief executive of vendor ShoreTel, said: “Some of the legacy players are struggling and we see the transition from TDM to IP will be one of the most significant battlegrounds for the UC market.”

Ian Komor, EMEA portfolio leader for enterprise and voice, was confident the firm would maintain its place as the UK’s top
PBX vendor as 2008 progressed. “In this economic climate, our aim is to grow faster than the overall market. This will be more difficult than in previous quarters, but expectations are high that we will sustain our market share,” he said.