Magic Quadrant for Corporate Telephony
3 August 2010

Steve Blood, Jay Lassman, Geoff Johnson

Gartner RAS Core Research Note G00205326

Pressure on budgets and growing interest in the market for unified communications are influencing buyer decisions for telephony. Organizations with broad collaboration strategies are likely to select telephony as part of a UC and collaboration bundle; others will focus on telephony as a discrete solution.

What You Need to Know

Even with advances in collaboration strategies, organizations continue to invest in Internet Protocol (IP) telephony platforms, although increasingly as a part of a unified communications (UC) strategy. As users' communication habits evolve, infrastructure and operations (I&O) leaders will need to consider new vendor relationships and different ways of managing network infrastructure that support communications and collaboration inside and outside the enterprise. The need for the IP-private branch exchange (IP-PBX) will vary according to current investment, maturity of an organization's network and incumbent vendor strategy.

Magic Quadrant

Figure 1. Magic Quadrant for Corporate Telephony

Figure 1.Magic Quadrant for Corporate Telephony

Source: Gartner (August 2010)

Market Overview

The Telephony Market Today

The telephony market shrank by more than 17% in 2009, in comparison with 2008, as the worldwide recession bit into networking and telecom budgets, and IT organizations prolonged the life of legacy telephony equipment. Although sales are recovering in 2010, the average price for telephony continues to fall. Vendors are trying to offset this effect by selling more bundles of software and services, and launching intelligent devices, such as Cisco's Cius.

A number of 2010 announcements will have an impact on the future of telephony suppliers. Alcatel-Lucent (ALU) announced that it was reorganizing its business into divisions for Applications, Networks and Services. Not only did it remove the distinction between enterprise and carrier product propositions, but it also merged the R&D resources of its enterprise division with that of Genesys and its carrier application development. Although it retains a sales focus on enterprise, this group is now embedded as an operational unit inside the Applications Services Group.

Although merging R&D resources and intellectual property may enable ALU to better focus on innovating for its service provider business (which accounts for more than 90% of sales), Gartner believes that the enterprise focus is diluted without dedicated support. Most of ALUs enterprise competitors are also targeting service providers with a hosted communications proposition, but ALU is the only vendor without a dedicated R&D unit focused on enterprise solutions.

Avaya completed the acquisition of Nortel's Enterprise division and was quick to lay out a consolidated product road map under Avaya Aura, leveraging Nortel's assets in Contact Center and Agile Communications Environment, while dropping platforms such as MCS5200 and announcing the end of sale for Norstar. Session Manager has enabled Avaya to offer a more integrated approach to managing existing Avaya and Nortel telephony platforms.

NEC completed the acquisition of Royal Philips Electronics' enterprise telephony portfolio. Although some regional variations still exist, NEC has invested time in consolidating its market approach around the core platform SV8000 for telephony and Spherical for UC.

HP completion of the acquisition of 3Com's data networking and voice portfolio. Although a positive step for the data portfolio, it changes the role of the 3Com VCX Enterprise voice platform. At the present time, HP will serve only midsize enterprises with this platform, limiting the larger market opportunity and its appeal to larger businesses, where it plans to leverage partners for communications solutions.

Virtualization has been high on the agenda for telephony vendors as data center architectures demand server consolidation, and increasingly, telephony is provided as a data center application. Most have road maps to support virtualization, and many are actually able today to virtualize the core telephony server. This is something that is likely to influence buying decisions for organizations adopting the consolidation approach. Software-oriented communications vendors are further along in this approach.

Gartner witnessed notable additional discounting for telephony throughout 2009 for proposals submitted under competitive tender. This enforces the need to undertake competitive tender, but also the need to be more strategic about vendor selection. "Best Practice: Having a 'Big Picture' View of IP Telephony Will Give the Buyer More Control" offers best practices on how to adopt this approach. Additionally, we have seen this past year an increase in the bundling of components around core telephony, such as presence services, unified messaging, mobility and softphone clients.

Although packages offer significant discounts over individual license purchases, we find that the user audience is always much smaller than the proposal. When considering bundling, organizations should look closely at the needs of users and ensure they can be selective in the deployment of bundles; otherwise, they will find themselves paying for software many won't actually use, which negates the benefit of the bundle in the first place.

Integrating mobile phones continues to be of interest to organizations, especially as the buying power with mobile operators is strengthening. More organizations are able to negotiate on-net rates that enable lower-cost or flat-rate calling between mobile users and the enterprise network. This increases the demand for solutions that integrate more tightly the mobile phone into the corporate telephony solution, and greater demand for integrating employees' preferred smart device. Although the telephony vendors are obvious providers, organizations should also consider independent providers of mobile communications gateway solutions.

The Future of Telephony Vendors

In 2009, we identified four key directions for telephony providers, that would ultimately define the future of the players in today's turbulent market. We have added a fifth category below that we consider increasingly relevant.

Organizations should evaluate their suppliers of telephony in terms of their ability to support one or more of the following directions and capabilities. Expect that some technology providers may not meet all of your organization's requirements, as they refine their strategies for profitability and sustainability:

  • All their real-time voice, video and conferencing capabilities across the enterprise network, integrated with collaboration capabilities, such as instant messaging (IM), e-mail and desktop sharing. Migrating between different communication channels should be seamless for users and offer a lower total cost of ownership (TCO) for the IT group than managing separate communication channels.

  • Demonstrated value of session management and control, and policies for how sessions are established between network endpoints across multiple technology platforms and managed for quality and cost controls. This elevates the role of the communication platform to that of network and session management, and is an alternative option to creating a homogeneous voice platform across the business. Vendors with this approach could then offer enhanced routing capabilities, extending contact center technologies as a value-added component of communication beyond the customer service center.

  • A low-cost telephony platform with tight integrations and partnerships with software vendors for conferencing and collaboration. Vendor solutions will focus on managing voice across wired and wireless endpoints.

  • A system integration and service capability of competitive UC products to complement shortfalls in their product portfolios and to supplement loss of product revenue. Increasingly, this will need to be a global capability to support knowledge worker groups that span geographies.

  • A scalable hosted solution, providing capabilities for service providers to offer communications-as-a-service solutions. This will benefit from an operating expenses cost model, but will be different from the multitenancy solutions provided by carrier-grade vendors in that it will be more customizable on a customer basis. It will be unlikely to match the cost points of the carrier-grade solutions, but will be specifically targeted at large businesses, rather than sharing the small and midsize business (SMB) focus of the carrier solutions.

Market Definition/Description

The market for corporate telephony can be described as the provision of holistic voice communications for all wired and wireless users in large enterprises. Typically, this will include multiple sites in multiple locations, often in different countries. This Magic Quadrant focuses on technology providers that design, manufacture and distribute a combination of hardware and/or software products to provide telephony solutions. Their architectures include distributed on-premises solutions, as well as hosted platforms, but they are essentially dedicated for use by a single company.

The market has evolved from proprietary hardware to standards-based hardware and software largely designed to support the next generation of communications. Although not wholly there yet, the new developments are encouraging. Companies can use IP telephony to deliver business benefits across the organization, while consolidating technologies around a common technology, solution provider, or selection of providers and partners. To meet the demands of this corporate telephony market, successful suppliers offer scalable solutions, using technologies that leverage Internet-based architectures, such as Session Initiation Protocol (SIP), but that still provide the necessary levels of resilience, functionality and integration into IT applications, with the voice quality demanded by users.

As UC solutions mature and collaboration becomes more pervasive, organizations will no longer source telephony as a separate application. For a large percentage of their workers, the mandatory subset of the current features offered by IP-PBX will be available in a UC portfolio.

Although organizations may still source telephony for discrete business applications, the value of the telephony market will have diminished significantly from what it is today.

Inclusion and Exclusion Criteria

To be included in the Magic Quadrant, technology providers had to satisfy the following requirements:

  • Demonstrate a telephony application that provides enterprisewide call routing and management for large numbers of enterprise voice users, including front-office switchboard operations across multiple wired and wireless networks.

  • Have a solution that includes the management of media gateways, the connection of IP with circuit-switched-based networks, and functions such as call admission control, survivability, codec management, echo cancellation and access to emergency service agencies.

  • Show evidence of sales, marketing and operational support for corporate organizations, consistently across the globe. Vendors with stronger capabilities in a smaller number of regions qualify for consideration, but limited market appeal will affect their ability to execute for many Gartner clients.

  • Show evidence of a quantifiable market share in large organizations, specifically information sourced through Gartner Technology and Service Provider Insight analysis.

  • Demonstrate the ability to generate significant interest and inquiries from Gartner client segments in the market.


There were no vendors added to the Magic Quadrant this year.


Nortel Networks was dropped this year, following its acquisition by Avaya, and 3Com was changed to HP following its acquisition earlier this year.

Evaluation Criteria

Ability to Execute

Product/Service: Core products providing telephony capabilities, provided by vendors that compete in and serve the large-enterprise market segment. This includes current product capabilities, as defined in the market definition, as well as the future direction in UC.

Overall Viability (Business Unit, Financial, Strategy and Organization): Includes an assessment of the organization's overall financial health, as well as the financial and practical success of the business unit, especially under current market conditions. Also included is the potential of the business unit to continue to invest in the product, offer the product and advance the state of the art in the company's broader portfolio of products.

Sales Execution/Pricing: The vendor and channel capabilities in all presales activities and the operational structure that supports them. This includes deal management, value selling, pricing and negotiation, presales support, and the overall effectiveness of the sales channel, direct and indirect.

Market Responsiveness and Track Record: The ability to respond to current market conditions and the disruptive influences of UC. It assesses how a vendor might change direction or modify its portfolio to achieve competitive success, as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of market responsiveness, as tracked in our market share and sizing research.

Marketing Execution: The clarity, quality, creativity and efficacy of marketing programs designed to deliver the organization's message to influence all markets, promote the brand and business, increase product awareness, and establish a positive identification with the product, the vendor and the channel in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotions, thought leadership, word of mouth and sales activities, as well as Gartner's inquiry process.

Customer Experience: Sales and support relationships, products and programs that enable customers to be successful with the products evaluated. This includes the availability of technical and account support, and the number of channels through which this is available. Also included are customer support programs (and the quality thereof), and the availability of user groups and service-level agreements (SLAs). Gartner's feedback from clients through the inquiry process is included in our analysis.

Operations: The ability of the organization to meet its goals and commitments, especially in the current climate. Factors include the quality of the organizational structure, especially global operations, skills, experiences, programs, systems and other vehicles that enable the vendor to operate effectively and efficiently on an ongoing basis (see Table 1).

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria
Overall Viability (Business Unit, Financial, Strategy, Organization)
Sales Execution/Pricing
Market Responsiveness and Track Record
Marketing Execution
Customer Experience

Source: Gartner (August 2010)


Completeness of Vision

Market Understanding: The telephony market is becoming quite specialized. We evaluated vendors for their understanding of how customer needs were changing, for users as well as the IT group responsible for managing telephony. It was especially important to see how vendors proposed to complement, or compete with, the collaboration solutions in UC.

Marketing Strategy: A clear, differentiated set of messages for telephony and enhanced communications consistently delivered by executives and senior employees, and externalized through websites, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling telephony products that uses an appropriate and profitable balance of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach to selective markets. The understanding of the shift toward value selling was especially important.

Product Strategy: The vendor's approach to product development and delivery, with road maps for consolidation, where necessary. Important factors here were the migration to software, support for SIP and the ability to build scalable solutions consistent with the needs of target markets.

Business Model: The logic of the vendor's underlying business proposition for the communications market.

Vertical/Industry Strategy: Some vendors articulate a specialization for vertical markets, by leveraging intellectual capital, technology, or an alignment with a sister or parent company. The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, especially in the current climate, where the propensity to spend varies among segments.

Innovation: The IP telephony market has reached maturity, and vendors need to demonstrate the innovation to capture market share and grow in associated markets, with a combination of technology and services to grow revenue beyond the market average.

Geographic Strategy: The telephony market has historically been fragmented, with most players receiving income from their traditional home market. The requirements for many of Gartner's end-user clients are global. A vendor should demonstrate how it directs resources, skills and product offerings to meet the needs of international clients, directly or through channels, to market to the needs of Gartner's clients (see Table 2).

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria
Market Understanding
Marketing Strategy
Sales Strategy
Offering (Product) Strategy
Business Model
Vertical/Industry Strategy
Geographic Strategy

Source: Gartner (August 2010)



Market leaders demonstrate strength and can affect market trends in all the criteria on which they are evaluated. Leaders tend to have broad geographical coverage across the globe, or particular strengths in one or more key global markets.


Challengers demonstrate an understanding of the market and often possess a complete product portfolio and a strong market presence. However, they have not shown an understanding of market direction, or they are not well-positioned to capitalize on emerging trends.


Visionaries display healthy innovation and a strong potential to influence the direction of the market, but they are limited in execution or track record. Typically, their products and market presence are not complete or established enough to challenge the leaders.

Niche Players

Niche Players often offer strong products for particular geographical or vertical market subsets, but they demonstrate weaknesses in one or more important areas.

Vendor Strengths and Cautions

Aastra Technologies

Aastra has a regional approach to addressing the international market requirements for telephony, after acquisitions of Intecom, EADS and Ericsson Enterprise. Although the vendor has articulated a multiyear consolidation strategy for applications and devices, the core telephony portfolio will vary on a regional basis. Organizations looking for cost-effective telephony solutions that have Aastra channel partners in country should consider the regionally available product. Global businesses should consider the MX-One portfolio.

  • Aastra has a competitive, scalable voice portfolio, and is able to offer organizations a low TCO for enterprise telephony.

  • To address the needs of its global customers, Aastra has created a global sales management function to coordinate in-country sales teams. This is a promising step for maintaining relationship with large businesses.

  • The partnership with Microsoft for handsets for Office Communications Server (OCS) is promising, and provides customers of both vendors with a common approach to sourcing hardware for their UC solutions.

  • Aastra will maintain three different telephony product platforms to support large enterprises. Continuous innovation may be challenging when development funding is split among a number of different solutions.

  • Aastra's product strategy relies heavily on partners for key enterprise telephony components of mobility and messaging, and for UC. Although consolidation around these partners across the portfolio is promising, the threat of acquisition by a competitor could disrupt future product plans.

  • Without a stronger UC brand awareness, Aastra risks losing market share to larger competitors with more-comprehensive capabilities, and to its channel partners promoting software-based voice solutions as part of collaboration.


Alcatel-Lucent presents a strong portfolio for telephony and migration to UC. We expect it to increasingly focus on the provision of hybrid enterprise telephony solutions (that span both enterprises and cloud) through service providers. This will be a more acceptable proposition for some organizations than for others. Organizations that have commitments to ALU, or those that prefer for telephony to be served as a hosted solution, should consider ALU for telephony.

  • Alcatel-Lucent's OmniPCX Enterprise (OXE) is a well-designed, highly scalable and commercially attractive platform for enterprise telephony. The SIP architecture supports a strong migration for multimedia, and helps with the dynamic enterprise strategy to bridge enterprise and carrier markets.

  • Combined with the Genesys sales force, Alcatel-Lucent is now better represented in most regions of the globe. Its carrier relationships mean it is better presented for solutions provided through network service providers and as hybrid offerings.

  • ALU was early to virtualize its telephony portfolio, which has enabled it to provide scalable and data-center-centric solutions for enterprises with a low TCO, as a result of prudent product management.

  • Despite reorganization in favor of a more-direct approach in the North American market, including leveraging its Genesys sales force from the start of 2010, ALU has yet to gain notable sales traction with new customers and channel partners in telephony.

  • ALU has been slow to complete basic, direct SIP testing with Microsoft, preferring to offer customers more-complex integrations that require deeper integration with products such as Genesys Enterprise Telephony Server.

  • The reorganization of the enterprise business unit, consolidating its product development with that of the carrier business has the risk of defocusing the research and development for enterprise customers.


The highlight for Avaya in 2009 was its acquisition of Nortel Enterprise Solutions (NES), which brings with it a large global base of Nortel customers and dealers. It also provides Avaya increased product and service revenue and opportunities to leverage economies of scale, as well as talented personnel in areas such as engineering, product development and marketing. Avaya is well-represented in global markets and should be a shortlist contender for most large organizations' communications strategies.

  • Avaya's service delivery capabilities require channel partners to demonstrate expertise in implementation, maintenance support and integration services. Avaya Connect is a globally consistent channel program that applies to all former Nortel Enterprise Systems partners, which helps customers identify channel partners with the most-appropriate skills for their respective telephony and UC projects.

  • Avaya Aura Session Manager is a programmable SIP-based solution that enables organizations to uniformly or selectively deploy telephony and UC applications and services throughout the organization, rather than as separate applications tied to specific servers or geographic domains. The design includes high-capacity, high-availability and N+1 active-active georedundancy, and supports scalability and transparency between the Aura and Nortel Heritage CS 1000 portfolios. Avaya's acquisition of Nortel's Agile Communication Environment (ACE) SIP-based platform positions Avaya to provide software that has the potential to enhance personal productivity, improve business processes and reduce costs in a UC environment.

  • Avaya's pricing is highly competitive, the result of initiatives taken during the past few years to reduce internal costs and selling prices for many products and services, as well as to simplify Avaya's pricing structure.

  • Avaya must demonstrate its ability to preserve and grow its base of Avaya Aura customers and channels, while supporting a smooth and cost-effective transition of NES users to Avaya products.

  • Avaya must provide ample sales, training and technical resources, as well as financial incentives to motivate former NES dealers to concentrate on selling and supporting Avaya solutions.

  • Although finalized, there are challenges in educating customers and partners on the product integration of Avaya and Nortel, as well as presenting an attractive normalized road map to all sets of customers, while competitors target the legacy installed base.


Cisco leads in global market share for enterprise telephony, and has an effective presence in most countries. The company provides the data networking and voice communications infrastructure necessary to be a contender for UC and collaboration (UCC) markets, and is an obvious contender for any organization's corporate telephony shortlist.

  • The overall viability of Cisco as a company was underscored on 1 June 2009, when it became one of the 30 publicly traded companies in the Dow Jones Industrial Average. The company has the financial and intellectual resources to continue developing its telephony products and to credibly assert its road map for UC.

  • Cisco Unified Communications Manager (UCM) is a scalable platform, complemented by a portfolio of products to provide a comprehensive UC solution. It also has a wide range of partner products to provide some of the largest installations of IP telephony.

  • Cisco's channels largely remain stable, productive and loyal, despite the impact of the global recession. The vendor has a strong go-to-market proposition via system integrators (SIs), service providers and network outsourcers, backed by a strong technology specialization and certification program.

  • Cisco's bundled pricing strategy can increase the TCO, especially for organizations that have yet to define a road map for UC. To optimize costs, prospective buyers should compare the pricing for Cisco's bundled and unbundled solutions and licenses.

  • As with any supplier, an organization's negotiation leverage can be compromised when procurement policies rely on a limited number of sources.

  • Cisco's strategy for UC is built around the integration of many products that were not designed together. This can lead to a higher cost of administration, and the need to include third-party products, such as VOSS, particularly for large-scale deployments of UCM.


Digium's flagship telephony solution, Asterisk, is targeted at organizations with a culture that embraces development, support and customization of IT and communications applications in-house or uses third-party network integrators to build and support a custom communications solution. Asterisk is open-source software that supports the industry-standard SIP protocol. Digium's turnkey product, known as Switchvox, is a good fit for companies that want to offer low-cost solutions for small business or small offices of large organizations that prefer a distributed architecture for telephony.

  • Digium's Asterisk is the strongest brand in open-source IP-PBX solutions. It comes in a variety of packaging options that include free source code and AsteriskNOW, an open-source package bundled with Linux and a graphical user interface for configuring Asterisk.

  • Asterisk is established as a reliable and cost-effective way to deploy telephony to users in organizations that are competent in managing open-source applications through their life cycles. This gives weight to Digium's development road map, which includes Switchvox UC solutions for SMBs and more products in communication appliances and gateways.

  • Asterisk Ecosystem and Asterisk Exchange provide access to partners that have developed products or solutions to facilitate the implementation of an Asterisk based architecture, using commodity hardware such as servers, SIP desktop devices and endpoints, Ethernet switches and virtualization.

  • Digium is a relatively small, privately held company. Viability is always an issue with companies of this size. Potential buyers should ask Digium for accounting statements to support the company's financial position.

  • When evaluating the TCO of open-source telephony, organizations should consider pricing for technical support, training options, professional services and future requirements for Asterisk hardware, including internal product development resources. It's important to do an accurate TCO assessment, in comparison with commercial enterprise telephony options.

  • Although the larger open-source community is gaining traction, telephony and UC are at smaller scale and are less mature. As the market for UC evolves, we anticipate that the developer community's interest in open-source telephony as a discrete application will transition to broader UC applications.


On 12 April 2010, HP completed the acquisition of 3Com. This was clearly targeted at filling a gap in its data center switching products. HP's strategy for voice is to continue with the VCX product line as part of the E-Series portfolio of products and services, targeting it at midmarket organizations (with up to 1,000 employees). Existing 3Com telephony customers will still be supported; however, they will to need to watch HP Networking to see how it positions telephony, given that it also has competing partner strategies with Aastra, Alcatel-Lucent, Microsoft and, more recently, Avaya. Large enterprises should not consider HP's own voice portfolio, but consider it an integrator of partner vendor solutions for telephony and UC, particularly with Avaya and Microsoft.

  • HP Networking is a leading provider of communications-centric integration and support services on a global stage. It has a recognized brand with large businesses and is a contender for managed services and the outsourcing of multivendor infrastructures.

  • VCX Enterprise is a cost-effective, Linux-based IP-PBX platform that uses SIP as the underlying communications protocol. The VCX Integrated Branch Communications Platforms focus on local implementations of fewer than 100 lines. This fills a gap in HP Networking's offers for midsize enterprises.

  • HP has an opportunity to provide a low-cost telephony solution to complement its investments in UC with partners, such as Microsoft. This assumes that not all employees will use the full suite of collaboration capabilities in OCS, and that it will take time for OCS to mature to become a total replacement for an IP-PBX.

  • Although 3Com's sweet spot was providing telephony solutions to SMBs, HP's focus for integration and UC is at the larger end of the market. It's not yet clear if the installed base of telephony acquired by HP is something it wants to invest further in to provide UC solutions, or whether it will rely on partners from the broader portfolio.

  • HP has a range of partners for telephony and UC. The inclusion of its own product with the VCX Enterprise could create competition and mixed message in its marketing, especially since HP has recently been selling its networking products over those of its competitor Cisco.

  • HP relies on partner technologies for advanced contact center solutions, which are essential for adding value to an IP telephony portfolio. Organizations need to ensure sufficient sales and operational support for their regions.


Microsoft is a leading player in the market for UC, and some customers are finding its telephony functionality good enough for knowledge and collaborative workers. Organizations committed to planning and implementing OCS should evaluate the telephony options as a complement to the existing telephony platform, with a plan to consolidate communications costs by displacing telephony licenses and hardware, following subsequent product releases.

  • Microsoft has a strong vision for the future of telephony embedded in UCC. Its next launch (scheduled for 2H10) will bring greater voice functionality, stronger network management and an increased range of more-affordable IP phones for direct connection to OCS with suppliers, such as Polycom, Aastra and Snom. This will improve its ability to displace telephony desktops, especially for new installations, or upgrades from legacy PBX platforms.

  • This is a financially viable company, with the mind share, marketing and resources to disrupt the telephony market, particularly as organizations migrate users to UC solutions.

  • Microsoft's collaboration-centric approach and deep integration with Office 2010 (including Outlook 2010 and SharePoint 2010) gives it greater credibility in addressing top-level business process issues. This strategic focus helps with sponsorship at senior level in IT organizations to drive the adoption of OCS in the business unit.

  • Organizations will find user adoption of RT Audio and Video will increase the demand for network bandwidth. Although the next release introduces bandwidth management capabilities, organizations will need to review the costs of re-engineering the network to ensure continuous quality of communications.

  • Ownership of licensing for OCS is likely to become more complex, as Microsoft introduces its separate Voice client access license. Organizations should identify budget stakeholders and ensure they understand how license costs are distributed among IT departments.

  • Integrating mobile devices to OCS is still an area of weakness for Microsoft. Organizations with mobile workers should evaluate OCS against other Enterprise Mobile Communications Gateway Solutions.

Mitel Networks

Mitel's primary focus has been the midsize market, but its alliance with VMware for virtualization is making it capable of serving larger organizations. It is tasked with maintaining sales in its main markets in North America and the U.K. while developing geographic reach outside these core markets. Mitel has been active in innovation and differentiation in and beyond telephony with Mitel Telecollaboration, the recent addition of high-quality video conferencing with its own 1080P-based endpoints. Mitel is a shortlist contender for an enterprise with distributed infrastructure, particularly verticals, such as retail and education.

  • Multi-Instance Communications Director (MICD), launched in late 2009, provides a hosted IP communications solution. The Mitel Communications Director (MCD) call control software operates on Mitel 3300 hardware, industry-standard servers or VMware vSphere 4 (vMICD). The Mitel Communications Suite (MCS) runs the MCD call control software and UC applications as an integrated software solution.

  • Mitel was early to recognize the opportunities with virtualization. Its initiative with SunRay for thin clients and VMware for communications server virtualization and business centralization into data centers enables it to offer more scalable solutions to a broader market.

  • Mitel's Solutions Alliance for strategic partnerships is gaining traction. Its product developments — such as Unified Communicator, Advanced Server, Enterprise Manager, Customer Interaction Suite, Applications Suite and Border Gateway — give confidence about the company's vision.

  • Mitel's use of MCD and developments to scale the architecture of the 3300 ICP to cost-effectively serve large campus environments is still a work in progress. Similarly, Mitel's launch of Mitel AnyWare, a communications as a service (CaaS) offering, hosted and managed by Mitel, and sold through both direct and indirect sales channels is still an early-stage development.

  • Mitel's channel partners are primarily network integrators, rather than system integrators (SIs) with skills in IT architectures and data center deployments. Many are without the right skills to discuss consolidated deployments, so organizations need to find properly accredited channel partners who understand the need or opportunity for virtualization.

  • As a recently public listed company, Mitel is now challenged to maintain profitability and shareholder value. Necessary improvements to profitability will come as a result of transitioning customers to indirect channels. This is often a difficult time for established customers, as new partner relationships are developed.


Through its "OneNEC" corporate vision, NEC has developed a more consolidated global direction in its marketing, strategy and product offerings. It now wholly owns the European business, which previously was a joint venture with Royal Philips Electronics. NEC performed better than many of its competitors in 2009, largely because of the lesser impact of the recession in Asia, and strong market activity in Australia. It leverages well the vertical relationships with the larger NEC business and is a contender for a shortlist in the healthcare, hospitality and education sectors.

  • NEC is a financially strong, global firm with an established presence in all regions. It has a broad portfolio capable of addressing the telephony requirements of markets segments such as hospitality, healthcare, government and education.

  • NEC has made investments in its software-based communications platform (UNIVERGE Sphericall) to create an offering in which the business culture expects telephony to play an active role in IT applications, UC and communications-enabled business processes (CEBP). UNIVERGE Sphericall has been an early adopter of virtualization for data-center and cloud-based deployments.

  • The UNIVERGE 360 approach to marketing telephony infrastructure from NEC, designed to generate a larger services income through its channel partners, is beginning to gain traction. Leveraging a portfolio of product technologies and partnerships, combined with professional services, NEC is focusing on addressing its customers' business issues, including customized solutions and managed services.

  • NEC plans to favor UCC-oriented solutions, while promoting telephony solutions. NEC has a large installed base of legacy telephony platforms that need upgrading to IP, can use the OW5000 middleware for UC functions or can use the Sphericall product as part of a software-based migration. This approach is challenging for organizations trying to minimize additional investments in voice platforms, while evaluating the potential for UC and a software architecture.

  • A software-based architecture is the key to providing communication functionality on-demand as a service. NEC's marketing of "Unified Process" for custom solutions is promising, but user organizations must ensure that NEC and its channel partners understand the challenge, have the professional services talent, and can meet the performance and delivery expectations in business process operations.

  • Even though NEC's headquarters is taking a more active role in country operations for global distribution to advance software solutions, these changes can be expected to take a year or two to achieve their full impact.


ShoreTel's technology is particularly well-suited for SMBs that have distributed communications requirements, as well as large enterprises with branch offices and retail sites. The company sells mainly through partners in North America, but continues to focus on growth in Europe, the Middle East and Africa (EMEA), the Asia/Pacific (APAC) region and Central America/Latin America (CALA). ShoreTel will appeal more to midsize organizations looking for system and personal interfaces that are intuitive and require little user training.

  • The ShoreTel telephony system has an IP architecture that can support many users in a widely distributed environment and is inherently redundant. ShoreTel switches are independent appliances, with software that supports built-in gateway and server functions. Growing system capacity for software, trunks and users is accomplished by adding switch modules that can be administered from a centralized interface, regardless of where the platforms are physically located.

  • ShoreTel has made significant progress in growing its installed base of SMB customers and is increasing its penetration of larger organizations. In the U.S., channel partners include AT&T, Black Box, Verizon, Qwest and CDW. The company continues to add customers with international operations outside of North America.

  • During the past 12 months, publicly traded ShoreTel grew from 372 to 466 employees, which included expansion of its sales and R&D operations.

  • ShoreTel has been slow to migrate its telephony architecture to support SIP-based communications. It only offers support for third-party SIP telephones and SIP trunking services, which require certification by ShoreTel.

  • ShoreTel's maximum scalability is 10,000 users in a single image, whereas competitors can scale much larger with single images.

  • Although ShoreTel has impressive customer satisfaction ratings and favorable TCO, these results are largely derived from its installed base of small businesses; thus, receiving references from large customers is advisable.

Siemens Enterprise Communications

Siemens Enterprise Communications (SEN) has a strong portfolio for telephony with OpenScape Voice for multinational organizations, presented through its direct sales, as well as via a slowly growing partner channel. Through extensive reorganization, it is significantly more competitive in new bid scenarios, but existing customers still have to ensure they can take advantage of the lower costs. SEN is an obvious contender for a European shortlist, but is also a strong contender for very large businesses that need a scalable data center architecture for telephony.

  • In a consolidating market of communications infrastructure vendors, SEN business is wholly focused on the provision of enterprise-class telephony and UC to large and small businesses, and its strategy is consistent with that of other market leaders in the provision of enterprise communications applications.

  • SEN has addressed many of the pricing concerns expressed in previous year's Magic Quadrants. With OpenScape Voice and associated mobility applications, it has a strong, scalable telephony proposition for new customers. Its open approach to handset licensing gives customers more choice.

  • SEN has a strong global services organization to support international companies that standardize on Siemens technologies for telephony and UC. This can be beneficial in building confidence with customers in transition to UC.

  • Although the new organization has increased its focus on marketing, SEN still lacks awareness in North America to drive the adoption of its OpenScape portfolio more rapidly.

  • SEN has been less open in not including HiPath 4000 in its Direct SIP integration testing with Microsoft. Organizations looking to perform integration between the two vendors will need to invest further in OpenScape UC to achieve this.

  • With the planned exit from the enterprise communications market by Siemens AG, rebranding of the SEN business is inevitable. This could affect awareness of its portfolio and reduce the loyalty of customers of the Siemens brand, which, in turn, could result in a diminishing market share.


In the U.S., Canada, U.K., parts of the APAC region and Japan, Toshiba continues to provide reliable system performance, cost-effective price points and clear migration capabilities to IP technology. The company's products will appeal to SMBs with centralized requirements, as well as those that need to support remote sites in vertical markets, such as retail, automotive, banking, financial and government.

  • All Toshiba Strata CIX series systems use the same applications, endpoints, cabinets and interfaces, providing investment protection for growing organizations. A wide range of wired and wireless devices, as well as softphones, are available. Its introduction of extended warranties supports its commitment to quality production.

  • Toshiba has introduced a range of UC-related offers that includes a level of interoperability with Microsoft OCS 2007. Its Media Application Server can support a range of UC applications, as well as backup for voice mail functionality.

  • Toshiba has a large selection of authorized dealers that cover the U.S. and other markets. In the U.S. and Canada, a unique national accounts program, centrally managed for customers by Toshiba, offers uniform pricing of products and services for applications that require deployment across multiple sites, which will appeal to organizations with retail locations and branch offices.

  • Although parent company Toshiba is a large, diversified manufacturer and marketer of electronic and electrical products, the communications business does not have any presence in the large-enterprise market in EMEA, nor does it have a global strategy that focuses on IP telephony requirements outside the U.S., Canada, U.K., parts of the APAC region and Japan.

  • Individual Toshiba Strata CIX IP telephony systems support as many as 1,000 users and 440 trunks. However, multiple systems can be networked for additional capacity and distributed configurations, and an optional AudioCodes gateway can automatically re-route incoming calls to an alternative CIX system in the event of a failure.

  • Without a strong marketing presence in large organizations, Toshiba risks losing its market share of branch office implementations to enterprise communications vendors. Organizations could also find integrating platforms, such as Microsoft OCS, with multiple Strata CIX locations a challenge.

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Vendors Added or Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills, etc., whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue investing in the product, to continue offering the product and to advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all pre-sales activities and the structure that supports them. This includes deal management, pricing and negotiation, pre-sales support and the overall effectiveness of the sales channel.

Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message in order to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements, etc.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling product that uses the appropriate network of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including verticals.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.