Avaya Tightens Allegiance with Microsoft, Industry Experts Reveal Shift in IP Telephony

Strategic Insights -

Avaya, an internet protocol telephony provider, has strengthened its ties with Microsoft, signaling a significant shift in the IP telephony industry. This move comes as the focus of the industry shifts from equipment sales to software applications layered over the top. Industry experts, including Ian Poole, chief executive of Integ, believe that the integration of desktop tools with IP phones has become a top priority for businesses. This notion, known as "presence," deals with a worker's whereabouts and is being driven by the desktop duo - Microsoft with its Outlook platform and IBM with its Lotus Notes suite.

Key Takeaways:

  • About 20% of IP telephony customers are asking for applications to be overlaid on IP telephony installations, as opposed to just swapping analog dial tone for IP dial tone (Dimension Data).
  • The key drivers in this game are the desktop duo - Microsoft with its Outlook platform and IBM with its Lotus Notes suite.
  • An estimated 50% of big Australian corporations use Lotus Notes while about 90% of new email system sales go to Outlook.
  • The advent of new IP telephony applications from software houses (Microsoft's Live Communications Server and IBM's Sametime) has the traditional hardware manufacturers scared, even though shipments are small.
  • Microsoft's IP telephony blueprint lacks cohesion, according to Gartner's vice-president of research Geoff Johnson, and he predicts it will be another two years before its vision comes together.
  • Equipment manufacturers should plan for the day when they'll be forced to compete head-to-head with Microsoft on IP telephony software bids, as predicted by IDC analyst Landry Fevre.
  • Microsoft's strategy with all these IP PBX players is to partner first, compete later, says Landry Fevre.

Statistics:

  • Avaya's local operations generate around 5% of total revenue from IP telephony sales, a figure which has quadrupled over the last financial year.
  • Part of this stems from Australia's aggressive early adoption of IP telephony, more so than any other country in Asia Pacific.
  • Cisco altered its channel strategy to deliver 22% rebates to partners selling more applications on top of its CallManager voice software.
  • About 80% of Avaya's customers utilize a Cisco network as proof of its superior open architecture (Avaya).
  • 80% of the router market and 70% of the switching market are dominated by Cisco.

Sources:

  • VoiceCon
  • Ian Poole, chief executive of Integ
  • Geoff Johnson, vice-president of research at Gartner
  • Landry Fevre, IDC analyst
  • Dimension Data
  • Elizabeth Ussher, Avaya's global director of competitive intelligence