Infonetics Research’s recent report, Service Provider Next Gen Voice and IMS Equipment, won’t surprise the VoIP industry. Infrastructure equipment sales to support new services are up 26 percent over last year, according to the Nov. 28, 2006 report.
But in preparing the report, Infonetics Principal Analyst Stéphane Téral did uncover some surprises.
The first is that telecom equipment and systems giant Nortel is back. “Nortel has come back as a leader,” Téral says. “They are still a strong player in VoIP.”
While that’s good news for Nortel, the Ontario, Canada-based company shouldn’t be resting on its laurels. That’s because the other interesting trend that Téral’s research revealed is that networking giant Cisco is making inroads into the carrier market.
In the past, Cisco has derived very little of its revenue from service providers — only about 75 percent — while Nortel gets 100 percent of its revenues from this market. Now Téral sees Cisco turning its attention to Nortel’s domain.
“Cisco is growing in the service provider VoIP space and is growing fast.” He says. “I saw John Chambers at a dinner in October. He said ’I’m looking at service provider market share and how much we’re gaining.’ He believes that Cisco is the only provider that has end-to-end product from the service provider to the home.”
Nortel faces challenges that Cisco doesn’t.
“Nortel is the incumbent and comes from the old TDM telephone world,” Téral explains. “This is the major piece of what’s left of their business. It’s hard for them to switch to IP because they still have to support the old technology. Cisco comes out of the IP world so they don’t have any legacy technology to support.”