Perspectives & Opinions, by Doug Green
Earlier this year, Microsoft stunned PBX market watchers by announcing that they were discontinuing Response Point. August 31, 2010 was the last official day for the now defunct product.
In April, Microsoft said, “Microsoft has made the decision to discontinue the sale, support and development of the Response Point phone system for small businesses, effective August 31, 2010.” The website will remain up through November 1 of 2010.
The reason stated for the end of Response Point is that demand never materialized to justify the division as a “self supporting” business within Microsoft.
The move surprised industry watchers because it leaves Microsoft without a premises-based PBX or PBX-like server for the SMB market. Since the SMB market has more lines or users in operation than enterprise, and because the SMB market is typically considered a gateway for any solution provider to gain larger market share over the medium and long term, it leaves Microsoft competing in a market without a complete portfolio in every business vertical.
When Microsoft first crashed the PBX/IP-PBX market party in mid-decade, the legacy OEMs and newish IP-PBX makers alike met the new club member with a mix of fear and hope. Many hoped to build alliances with the ubiquitous Microsoft, while others worried that with each new step Microsoft would build its own story and that story would be a “game changing” sweep of the telephony scene.
Over the past four years, according to Dell’Oro’s market tracking of the PBX world, including all revenues from everything from instruments to licenses, Microsoft has indeed stormed the party, grabbing about 2.6% of the whole global market making Microsoft the eighth largest solution provider in Q1 2010. Avaya and Cisco, the top two companies, as counted by market share, in the sector, come in with approximately 20% of global revenue, each. A 2.6% share may seem small, but the other OEMs derive revenue from end points and other high end, revenue rich products that Microsoft turns to partner companies to provide. Microsoft has experienced the steepest climb in share, running from zero just a few quarters ago, nearly doubling its share every twelve months.
Yet some observers have wondered if Microsoft should be further along at this point. Given the company’s vast resources, its ubiquitous nature in the IT systems of many companies, its ownership of the desktop and its tendency to overwhelm key market targets, it remains an open question whether Microsoft’s UC story has been properly explained to the market, or whether the market is accepting that story. In the longer term, the answer to those questions will determine if Microsoft’s UC play is that of a niche interest or whether it will go to mass acceptance and grow to have a market share that competes with the likes of Avaya and Cisco.
Another question is whether or not Microsoft’s approach is disruptive to the point of eventually creating its own market, or redefining the market, as it has done in other cases.
Microsoft is currently in the telecom market with two products. Microsoft Office Communications Server 2007 (OCS) is an enterprise server delivering voice, video and data. The In February 2009 Microsoft released the R2 version of the server. Microsoft also offers a cloud-based version of R2.
Despite Response Point’s termination, Gartner placed Microsoft, alongside Avaya and Cisco, into the “Leaders” category of the Magic Quadrant for Unified Communications http://www.telecomreseller.com/2010/08/17/avaya-cisco-microsoft-make-gartners-uc-leaders-quadrant/.
