"Before I joined the telecoms industry in the mid 90’s I spent 11 years in the defence industry, contributing to Lord Winestock’s personal wealth at GEC-Marconi (if not my own, sadly). At that time, there was a massive consolidation underway with many hundreds of suppliers being bought-out by the defence behemoths, resulting in a supplier landscape that we see today – a small number of huge companies like BAe Systems servicing the nation’s defence needs (and many other nations too). When Lockheed Martin won the contract for the F22 Raptor, they had to build, at their own risk, a fully operational test aircraft and compete in a “fly –off” with McDonnell Douglas’s YF23A. The stakes were huge, but so was the opportunity, so it drove competition and diversity.
With a much diminished market for premise-based telephony coupled with supplier consolidation (e.g. Mitel’s recent acquisition of Aastra) you can’t help but wonder if there are some parallels here.
Since the emergence of IP telephony and SIP, there have been fewer points of real differentiation between PABX vendors. Success or failure was dependent on good support provided to the reseller channel and active marketing campaigns. In the early noughties, prior to the crash, there was plenty of business to go around (the SME telephony market being worth something like £250m excluding handsets) so you just had to be a bit less bad than the next guy to hit your numbers.
Guess what? Since the emergence of cloud telephony and various Software as a Service solutions (SaaS) including Contact Centre as a Service (CCaaS), there has been a significant reduction in the available market for the telephony manufacturers. That inevitably means a number of things for the consumer; less investment in product development, a risk that manufacturers will be acquired or go out of business, and more pressure on maintaining price points for the remaining business.
This is all great news for those organisations who have questioned the need for expensive proprietary systems to run their ICT estates. The cloud communications market is now mainstream; under the Government’s G-Cloud initiative, central government departments have a target to place 50% of all new IT procurement in the cloud by 2015. Initiatives like this, coupled a general acceptance that cloud is the way forward by end users, will continue to drive the market for cloud communications, including CCaaS, enabling much wider choice for the user such as:
•Releasing capital expenditure budgets.
•Removing reliance on proprietary systems.
•No need for expensive desktop devices.
•Flexible solutions available to cater for seasonal trends without buying over-capacity.
We’re seeing companies kick-out premise based call centres in favour of our Cloud solutions to leverage this potential on a weekly basis now; the CIRRUS cloud definitely has a silver lining..."