Fear of US recession and …… VoIP
If the US does indeed catch recession I imagine the winners in telecom are once again going to be the bigger players in the market. Let us take the case of enterprise VoIP, a segment that has been nicely growing since 2002. Obviously with recession like situation enterprises will cut their communication costs. IT people will see some job cuts too. If I was hired to devise a defensive strategy for the IT staff evaluating VoIP proposals, even I would suggest they go for solutions perceived as safe if they seek security of their jobs.
‘Safe’ solutions for enterprise VoIP come from Cisco and Avaya. If you procure solutions from these vendors and the system malfunctions, you don’t get the blame. If on the other hand you procure solutions from a smaller vendor and the system malfunctions – well you might lose the job. I hear that even the small businesses which rarely went to these large vendors for a VoIP solution have started looking towards them. This is affecting the business of small VoIP vendors.
Among the large vendors I think that Cisco probably stands to gain the most during recession. Vendors like Cisco are in a good shape. Others, particularly Nortel, are in a bad shape. Recession is a double edged sword for large vendors like Nortel. It could either turn out to be a blessing for them because they get little competition during recession as companies make safer bets. On the other hand if the overall spending goes down substantially then that will precipitate Nortel’s end for sure.
