Our newest feature on No Jitter summarizes Synergy Research's findings about the size and shape of the Unified Communications market. The authors, Jeremy Duke and Ken Landoline, spend the first portion of the article laying out their taxonomy of the market and explaining why this particular classification makes sense. They include a helpful "organizational chart" showing how they consider the pieces to be put together.They also discuss the size of the market, and, like other market researchers before them, find the numbers to be rather modest, considering the hype over UC. Synergy sizes the overall global market for "collaborative applications," at $4.6 billion, which is not a huge number when you consider that "collaborative applications" is Synergy's overarching term for essentially everything in this space, from unified messaging to the desktop apps that others refer to as "UC dashboards," plus conferencing and presence/IM. Furthermore, that "desktop UC" category comes in at just over half a billion for the entire global market.
What's more, Synergy's market share numbers indicate that, on a global basis, this is still pretty much anybody's ballgame, at least in terms of shipments, with less than six percentage points separating market leader Cisco from seventh-place IBM. Cisco leads the market with just over 16% share, Avaya nipping at its heels at less than a half a percentage point behind. Alcatel-Lucent and Siemens also make a strong showing, as do Microsoft and IBM, with Nortel still in the hunt at almost 12%.
This market share recap reminds us again why Avaya and Siemens are vying to purchase Nortel Enterprise out of bankruptcy. In such an evenly divided market, adding Nortel would almost double anyone's market share and vault that vendor into the clear worldwide leadership in this cutting-edge market. Which has to make you wonder: Why isn't Cisco, Microsoft, IBM, or (especially) Alcatel-Lucent apparently in the hunt to acquire Nortel?
That question comes up when you read Jeremy and Ken's concluding paragraph, in which they state that, "Synergy estimates Microsoft is shipping fewer than 50,000 voice lines per quarter in comparison to the top PBX vendors shipping over 1 million lines per quarter. We believe if Microsoft wants to be a leader in enterprise voice, the company will need to make an acquisition to do so."
I think the different companies approach to the prospect of buying Nortel says a lot about who they are. The company that, in many ways, is most in need of buying Nortel is Microsoft, yet it this doesn't appear to be in the cards. Nor does Cisco seem at all interested. Both companies seem supremely confident that they can win in this market on the strength of their own marketing, channel, and vision. (I'm not passing judgment on anyone's products; at the end of the day, who has the best product seldom determines the winner.) What's more, neither Microsoft nor Cisco has ever pursued an acquisition strategy of buying large companies to dominate a market. Microsoft rarely buys large companies at all, and Cisco's large buys (like Scientific-Atlanta and WebEx or, back in the day, StrataCom) are aimed at getting them into adjacent markets.
Which leaves Alcatel-Lucent as kind of the odd man out. When you look at the market shares, and Alcatel-Lucent's need, like Siemens, to get a stronger foothold in North America, it's surprising that they haven't been mentioned as a potential Nortel buyer. Maybe the challenges of the Lucent integration taught Alcatel a lesson that Avaya and Siemens are preferring not to heed.Synergy's market share numbers indicate that, on a global basis, this is still pretty much anybody's ballgame.