Allan Sulkin, for one, is talking up the idea that Alcatel-Lucent and Nortel should both spin off their enterprise divisions, and then merge the two (see comments to the linked post). After Nortel's announcement last week of wider losses due mostly to curtailed carrier spending, such a move might look pretty good to the enterprise division.
On the other hand, Zeus Kerravala thinks that some vendors are just going to go away. His argument is that there are companies which simply don't have a lot of value to add to another communications vendor company, and will not be attractive merger candidates. These firms, he believes, will simply die off.
I'm beginning to doubt that there's going to be a wave of consolidation, or maybe even vendors disappearing.
The thing is, only about half the vendors in the market are pure-play enterprise communications vendors. The most obvious one is Avaya. It will probably continue to lose share to Cisco, as will most of the rest of the field of vendors, but Avaya's large installed base and high-quality products plus market leadership in contact centers gives it a healthy degree of staying power.
SEN is another pure play, and though its back is against the wall in North America, its got strong market share just about everywhere else in the world, plus a large minority stake held by the diversified Siemens conglomerate. Its course is charted at least for the near term.
Mitel, as noted, has been in acquisition mode and, per Sulkin, is gaining in North American market share as it tries to move up into the larger-enterprise market. A similar case is fellow Candian company Aastra, which gobbled up the former Intecom and Ericsson's PBX unit, helping to create a broad-based portfolio that's strong in Europe.
Then there's ShoreTel, which took a hit at the beginning of this year when it reported some disappointing results and its stock lost half its value, a drop from which it still hasn't recovered. But its hung in there and continues to receive accolades for its products.
On the other hand, the high end of the market also features many companies that don't rely exclusively on the enterprise communications market: Cisco, Nortel, Alcatel-Lucent, NEC. And at the lower end, besides many of the aforementioned players, you've got the likes of Toshiba, Samsung, and Panasonic, who remain strong, diversified players. And playing in both the large and small markets, you have 3Com, which has a relatively small market share in North America but, thanks to its tight relationship with Huawei (which may or may not one day end in an acquisition), is perhaps best positioned for the massive China market.
Of these multiplay companies, at this point only Nortel and Alcatel-Lucent seem like potential candidates for spinning off their enterprise communications divisions. Sulkin, in his Siemens comment, explains how a combined Nortel Enterprise/Alcatel-Lucent Enterprise would represent a much larger company, but then that very argument brings to bear the product rationalization and cultural issues that typically bedevil large mergers, as Zeus points out in his post.
So to me, the bottom line is that the pure-play vendors have nowhere to go and really nobody to acquire them; and most of the multiple-play vendors still have some markets where they compete, meaning they don't have to exit the communications market. To me, that all spells a continued period of uncertainty.