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...Home ... Editorial ... News ..News Story Monday: December 27, 2010


Cisco, Others Seek Economic Safe Harbor


6/18/2009 -- If you've ever wondered why Cisco Systems Inc. and other players are jockeying for position in the burgeoning unified communications and collaboration (UCC) segment, a new survey from market watcher Infonetics Research should help clear things up a bit.

According to Infonetics, the voice segment has been a bona-fide safe harbor in the midst of a raging economic storm.

Earlier this month, Cisco announced an ambitious expansion of its UCC product set, along with new UCC-oriented sops to partners and resellers. Cisco's move was widely interpreted as a response to a UCC-focused partnership notched last month by Hewlett-Packard Co. (HP) and Microsoft Corp. The salient point, analysts argue, is that the UCC segment is up for grabs -- and that the major players are jockeying for position (to say nothing of market bragging rights).

To the degree that the UCC market -- of which voice communications comprises an important segment -- is a comparative safe harbor, it's doubly attractive to Cisco, HP, IBM Corp. and other megavendors.

On the other hand, even safe harbors get a little choppy. In the case of voice communications, Infonetics found, enterprise IT organizations appear to be holding the line on UCC spending. Iin other words, they're neither expanding nor cutting their voice budgets. In the context of an IT spending climate in which organizations are making deep cuts to their budgets -- market watchers Gartner Inc. and IDC Inc. recently revised their 2009 IT spending forecasts downward -- even holding the line can amount to a victory of sorts.

"Ultimately, companies do want to decrease or slow the growth of their overall voice communications expenditures. One item they're looking at cutting is communication services (long distance, trunking, conferencing, etc.), which takes up the largest portion of the budget. Meanwhile, they're willing to invest in new infrastructure and applications if it contains or reduces communication services," said Matthias Machowinski, Infonetics' directing anlayst for enterprise voice and data, in a release.

On the whole, Infonetics found, IT organizations seem to be planning "slight reductions" in communication services along with increases in infrastructure spending, which Machowinski sees as an "indication that buyers are willing to continue making capital investments if it reduces their overall expenditures."

Elsewhere, while some shops plan to trim their spending on voice communications, Infonetics says that such cuts are "almost perfectly offset" by shops that expect to boost their spending in the voice communications category.

Finally, Infonetics sees increased spending on VoIP services as one indication that "enterprises [are] looking to decrease spending by using more cost effective IP alternatives." --Stephen Swoyer



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