Perspective
Moderate on Hewlett-Packard relaunching 3Com’s business communications products, because despite the 3Com telephony and UC products being available for many years, HP’s current IP PBX and enterprise telephony penetration is very low and the company is well behind the competition in exploiting the market potential and capabilities of the 3Com products in terms of marketing, distribution and buyer mindset.
Vendor Importance
High to Hewlett-Packard, because the 3Com acquisition and the resulting rebranded 3Com UC products that have become part of the HP family provide an opportunity for incremental revenue in the areas of SMB telephony and unified communications. This can complement HP’s increasingly strong data networking and server businesses and tap into a rapidly-growing revenue stream.
Market Impact
Low on the unified communications industry, because HP/3Com’s UC market penetration is minimal, the established vendors have a substantial head start in terms of time and competitors are on par or ahead of HP in UC solution capabilities.
Competitive Positives
• The 3Com VCX product family of technically sophisticated, software-based SIP switches gives HP a product line that can cover SMB through large enterprise and multi-location sites. It is comprised of three major products – 3Com VCX Connect 100 (up to 100 users), 3Com VCX 200 Connect (up to 250 users) and the 3Com V7000 (up to tens of thousands of users) – providing HP with the ability to make a strong and broad attack on the enterprise IP PBX/UC market.
• Though VCX PBXs are capable of scaling to meet the needs of very large enterprises and in some cases have been deployed in businesses needing a telephony platform that supports thousands of lines, going forward HP plans to market VCX only as an SMB platform. This will help HP focus sales and product initiatives on a very specific industry segment. Additionally, unlike the enterprise PBX market, there is no very dominant leader in the SMB PBX market. This should help put HP in a better position to stake a claim in it.
• HP has formed multiple UC-related partnerships with several industry leaders including Aastra, Alcatel-Lucent, Avaya, Cisco, Microsoft and Siemens Enterprise Communications. These remain in place and will be focused mainly on sales opportunities in the enterprise market, not the SMB space, where the VCX products will be positioned. This will help minimize direct competition between HP and its UC partners in the enterprise space. It also puts HP in a better position to be a provider of UC solutions across all sizes of customer businesses.
• HP has been active in the UC market through telepresence and data networking product offerings, the latter of which can now be positioned as part of a larger voice-data solution that incorporates third-party call control technology. This market position in data networking products can allow HP to offer a converged voice communications and data networking solution, which could benefit the company when VCX is positioned to small and mid-sized enterprises seeking a more holistic UC solution from a single vendor.
• In September, HP announced the VCX 9.5 release, launched the 350x Series IP Phones and provided necessary collateral and product data sheets on the HP networking Web sites for all VCX products. This is a good demonstration of continued R&D activity behind the products as 3Com’s business is being integrated into HP. HP also has put in place VCX IP telephony certifications and authorizations on the HP partner portals for existing HP resellers to get certified on the VCX product family. This should help bring 3Com resellers into the larger HP channel program, as well as begin making 3Com VCX products more easily available to traditional HP resellers.
• Though VCX PBXs are capable of scaling to meet the needs of very large enterprises and in some cases have been deployed in businesses needing a telephony platform that supports thousands of lines, going forward HP plans to market VCX only as an SMB platform. This will help HP focus sales and product initiatives on a very specific industry segment. Additionally, unlike the enterprise PBX market, there is no very dominant leader in the SMB PBX market. This should help put HP in a better position to stake a claim in it.
• HP has formed multiple UC-related partnerships with several industry leaders including Aastra, Alcatel-Lucent, Avaya, Cisco, Microsoft and Siemens Enterprise Communications. These remain in place and will be focused mainly on sales opportunities in the enterprise market, not the SMB space, where the VCX products will be positioned. This will help minimize direct competition between HP and its UC partners in the enterprise space. It also puts HP in a better position to be a provider of UC solutions across all sizes of customer businesses.
• HP has been active in the UC market through telepresence and data networking product offerings, the latter of which can now be positioned as part of a larger voice-data solution that incorporates third-party call control technology. This market position in data networking products can allow HP to offer a converged voice communications and data networking solution, which could benefit the company when VCX is positioned to small and mid-sized enterprises seeking a more holistic UC solution from a single vendor.
• In September, HP announced the VCX 9.5 release, launched the 350x Series IP Phones and provided necessary collateral and product data sheets on the HP networking Web sites for all VCX products. This is a good demonstration of continued R&D activity behind the products as 3Com’s business is being integrated into HP. HP also has put in place VCX IP telephony certifications and authorizations on the HP partner portals for existing HP resellers to get certified on the VCX product family. This should help bring 3Com resellers into the larger HP channel program, as well as begin making 3Com VCX products more easily available to traditional HP resellers.
Competitive Concerns
• HP’s current strategy in the telephony market is to sell the VCX to SMBs, position partners’ PBXs in the enterprise market and, in the mid-market, sell either VCX or partner products depending on whether or not the customer wants an all-HP UC solution. This is a much more complicated strategy than HP has to date pursued in the UC market and it remains to be seen if HP can execute on it.
• By focusing VCX sales on the SMB market, HP tries to minimize direct competition with PBX developers in the HP AllianceONE program. This could to some extent work since HP has traditionally engaged in co-marketing and other initiatives with partners’ enterprise PBXs. However, all of HP’s PBX partners actively sell telephony and UC solutions to SMBs and HP will compete directly with them in this space. As a result, HP will have more complicated relationships with most of its UC partners going forward. These existing HP UC partnerships could confuse the competitive landscape and result in very complex cooperative/competitive relationships. This makes the future of these relationships uncertain.
• By narrowing sales and marketing initiatives on the SMB space, HP cannot leverage the full breadth of 3Com UC products. The VCX V7000 enterprise-class IP PBX remains in the HP product portfolio despite HP’s insistence that it will not compete with partners in the enterprise telephony market. A number of the VCX applications, such as the contact center platform, are optimized for enterprise, not SMB, adoption. In not rationalizing its enterprise PBX and communications applications, HP is sending out a mixed message, saying that it does not plan to compete in the enterprise UC market but is retaining products that allow it to do so.
• The VCX products are nearly invisible in the marketplace. They have a very small market share, with only about 2,800 VCX servers deployed in both enterprise and SMB settings. It will be difficult to leverage them to catch up and compete with Avaya, Cisco, Siemens Enterprise Communications and others that have been actively selling products and applications into the enterprise IP PBX and UC market for the past decade.
• While HP describes telephony as an important revenue stream, it is clearly a subset of the larger UC and collaboration market opportunity. If HP is not in fact pursuing other opportunities in the UC market – such as messaging, collaboration, video conferencing, presence and other advanced applications – the company’s ability to capitalize on its new UC product initiatives could be quite limited.
• 3Com’s UC solutions are largely software-based. The development and management of software products is not a traditional strength of HP, a company that was built largely on a hardware development and manufacturing tradition. The management and lifecycle planning of a software-centric telephony enterprise application family will likely be problematic to HP, especially if it is not deemed to be a major focus of HP success.
• By focusing VCX sales on the SMB market, HP tries to minimize direct competition with PBX developers in the HP AllianceONE program. This could to some extent work since HP has traditionally engaged in co-marketing and other initiatives with partners’ enterprise PBXs. However, all of HP’s PBX partners actively sell telephony and UC solutions to SMBs and HP will compete directly with them in this space. As a result, HP will have more complicated relationships with most of its UC partners going forward. These existing HP UC partnerships could confuse the competitive landscape and result in very complex cooperative/competitive relationships. This makes the future of these relationships uncertain.
• By narrowing sales and marketing initiatives on the SMB space, HP cannot leverage the full breadth of 3Com UC products. The VCX V7000 enterprise-class IP PBX remains in the HP product portfolio despite HP’s insistence that it will not compete with partners in the enterprise telephony market. A number of the VCX applications, such as the contact center platform, are optimized for enterprise, not SMB, adoption. In not rationalizing its enterprise PBX and communications applications, HP is sending out a mixed message, saying that it does not plan to compete in the enterprise UC market but is retaining products that allow it to do so.
• The VCX products are nearly invisible in the marketplace. They have a very small market share, with only about 2,800 VCX servers deployed in both enterprise and SMB settings. It will be difficult to leverage them to catch up and compete with Avaya, Cisco, Siemens Enterprise Communications and others that have been actively selling products and applications into the enterprise IP PBX and UC market for the past decade.
• While HP describes telephony as an important revenue stream, it is clearly a subset of the larger UC and collaboration market opportunity. If HP is not in fact pursuing other opportunities in the UC market – such as messaging, collaboration, video conferencing, presence and other advanced applications – the company’s ability to capitalize on its new UC product initiatives could be quite limited.
• 3Com’s UC solutions are largely software-based. The development and management of software products is not a traditional strength of HP, a company that was built largely on a hardware development and manufacturing tradition. The management and lifecycle planning of a software-centric telephony enterprise application family will likely be problematic to HP, especially if it is not deemed to be a major focus of HP success.
