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SMB market starting to drive growth in global communications systems

Demand from small to medium-sized businesses is beginning to drive global enterprise telecom system shipments, acco...


February 8, 2006  


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Demand from small to medium-sized businesses is beginning to drive global enterprise telecom system shipments, according to new research from InfoTech, the market research arm of The Telecom Intelligence Group.

The findings mark a significant departure from previous years when large enterprises proved the sweet spot for telecom equipment manufacturers and distributors.

Shipments of systems in the 2-40 lines category represented the highest percent of shipments globally in Q3 2005, reported the InfoTrack for Enterprise Communications (IEC) research program in its Third Quarter 2005 Report.

The segment represented 29% of North American, 24% of EMEA and 24% of CALA (Caribbean and Latin America) line shipments. Most noticeably, the CALA region showed the highest annual growth in that segment with a 34% increase.

The SMB opportunity is confirmed by the Telecom Intelligence Group’s TelecomTactics service, which tracks communication systems and compares their functionality.

Nearly 80% of new enterprise telephony systems introduced in 2005 were designed for small-to mid-sized businesses or branch offices, up from 60-70% in recent years.

Nortel’s BCM 50, Avaya’s IP Office, Mitel’s SX-200 ICP and Cisco’s Integrated Services Router for CallManager Express have all had a major impact on this market, the research firm noted.

“A few years ago, selling technology protection was the game, but distinctions among IP, Key and PBX have blurred, and the issues now are functional needs and budgets, vendor preferences, application productivity and channel effectiveness,” said Susan Hobart, an InfoTech vice president.

“The winning vendors will adapt with cost-effective solutions to tap the rising SMB demand. The rest will continue selling high-end systems under considerable price pressure to what is now a very mature market.”