Wireless Connectivity

Enterprise telephony has hit some tough times, with the market dropping pretty significantly. The global enterprise PBX market reached $1.8 billion in the first quarter of 2013, a decrease of 9 percent from the previous quarter, and 10 percent from the same time last year.

According to a report from Infonetics Research (News - Alert), “Enterprise Unified Communications and Voice Equipment,” the market has suffered, while Unified Communications (UC) continues to gain more demand. While this might seem to indicate UC beating out PBX (News - Alert), it’s more like a sign that PBX vendors need to upgrade what enterprise telephony can offer to match UC.

There is some good news, however. In the Asia Pacific market, the PBX revenue still rose by a good 7 percent. Companies such as LG Ericsson (News - Alert), Mitel, NEC and ShoreTel are all still reporting revenue gains, having not taken much of a hit from the loss in the PBX market. Top PBX vendors, however, remain locked in battle to not only keep customers from one another, but to stop them from going over to IP and UC solutions.

Speaking of UC, the Unified Communications (News - Alert) market has improved nicely while PBX has faltered. UC revenue is up by a good 21 percent from the same time last year, as it takes customers from PBX and gains new ones.

“In the first quarter of 2013, enterprise PBX spending dropped to its lowest point since mid-2009,” said Diane Myers, Infonetics’ principal analyst for VoIP, UC and IMS. “The big squeeze is coming from hyper-competitive price pressure all over, with average revenue per line down across the board. But conservative spending by businesses is exacerbating the problem in some regions, while demand is actually flat-to-up in North America and Asia, reflecting uneven economic recoveries.”

While it may be sad to see a market suffer, this is the natural progression of the technological world. The new and better devours the older and less desirable, so that which finds itself outdated must adapt to the new market demand and improve beyond its competitor. In this case, PBX must evolve beyond UC, or else this will not be the last story about the market suffering.