As a low-cost alternative to wired communication networks, Voice over Internet Protocol technology, better known as VOIP, has inflated into a million dollar market. By converting analog voice signals directly into data packets that can be transported over the communication network, VOIP provides a high quality solution to enterprise communication needs. To remain in coherence with the age-old economic theorem of demand and supply, several companies have ventured into the VOIP market. However, in this arena dominated by technological development and IT infrastructure, Cisco enjoys the lion’s share with several high end products on sale.

Cisco Dominates the VOIP Market Dynamics

If the internet telephony market can be considered a country, Cisco Systems is one of the oldest and most well placed citizens. When the internet telephony technology began to take shape in the late 1990s, most of the service providers had to invest millions in developing supporting infrastructure. However, Cisco remained the primary beneficiary of the technology development, with an already existing IP infrastructure. All it had to do was to capitalize on the available resources to dominate the emerging industry. Cisco contributed significantly in the shift towards IP-based PBXs. The company has smartly used internet telephony technology to promote its networking devices such as routers.

As per the 2009 survey conducted by Osterman Research Inc, Cisco continued to lead the VOIP market by providing comprehensive solutions in the enterprise segment. It is followed by Avaya and Nortel. The company has also ventured into the consumer VOIP segment by networking with cable-based VOIP service providers. During the economic turmoil of 2008, most VOIP companies struggled to register a positive growth chart. Cisco, on the other hand, stood against all odds to nail the best performance in the PBX equipment segment.

What Makes Cisco the Uncrowned King in the Telephony Market?

Huge IT infrastructure, coupled with years of experience, helps Cisco in turning the odds in its favor. Cisco CallManager, the flagship product in the internet telephony segment, provides a rich set of voice applications for SMEs and commercial customers. Cisco products are voted for their superior voice quality (almost twice better than average products from competing companies). Integrating the video call application into Unified Communication solutions, the company is targeting to boost their market share in the current financial year.

Competing with this technology giant in terms of product development and infrastructure is a daunting task. However, Avaya and Nortel are focusing on providing simplified solutions to enterprises. Cisco products suffer from complications in terms of data management and flexibility. In 2006, the entire VOIP database of NASA got erased when their engineers tried to add some contacts in the Cisco equipment. The complications in the Cisco devices can cause major shutdown even due to a small snag. While the company is making efforts to eliminate this bottleneck, Avaya and Nortel products are capitalizing on this grey area.


The author, Mayank Saxena, is an industry expert & member of the web content writers’ team with Veda Informatics.