Industry Predictions for 2011Industry Predictions for 2011

What's in the offing for Cisco, Microsoft, HP, Dell and others? Zeus takes a stab at some prognostications.

It's hard to believe 2010 is almost over! That means it's time for us industry prognosticators to look into the crystal ball and predict what happen next year. Our industry is becoming more complex, making the predictions more difficult, but here's my best shot:

Prediction 1: The term "session" becomes a mainstream term
Despite all the focus on UC services such as chat, presence and video, our industry revolves around voice calls, which only hold us back. In 2011, the concept of a "session", that is a semi-permanent, multimedia connection between users or devices, will become better understood by the buying community. Thinking in terms of “sessions” instead of "calls" helps organizations create a roadmap to a broader set of collaboration services as well as providing an on ramp to cloud services. This trend will drive greater adoption of SIP trunking and help session border controller (SBC) companies like Acme Packet continue their meteoric rise. Avaya should see some upside from this trend as well, since the company has been aggressively trying to take a leadership position in session management and ownership.

Prediction 2: HP dumps the 3Com VoIP portfolio
This one isn't really all that hard to see. Back in the day, the 3Com VCX and NBX products were considered best in class. Of course, that was many years ago and there has been very little innovation done to that product line since then, leaving HP with a product line that's outdated and in need of an upgrade. However, UC should be important to HP as the company continues to go toe to toe with Cisco, so HP may choose to acquire its way into this market. If it weren't busy integrating 3Com into the network portfolio, I would be a little more definitive on the acquisition prediction. I think HP will eventually acquire in this area but I’m 50/50 that it will be in 2011.

Prediction 3: Lync disappoints
This year we saw Microsoft finally deliver the long awaited "Wave 14" of the artist formerly known as OCS. Despite innovations such as "call park" and "branch survivability", Microsoft has a long way to go in voice. I know Lync is supposed have a feature set comparable with other IP PBXs, and it may, but what Microsoft will learn this year is that voice is hard. It took the VoIP pure plays such as Cisco and ShoreTel years to get voice right and Microsoft will go down the same path. Now don't get me wrong, because of its historical monopoly on the corporate desktop, Lync will be widely deployed this year, I just don't think they will roll over the industry like many think they will. Microsoft will have most of its success in the medium size enterprise at the expense of companies like ShoreTel and Mitel. Share gains against the enterprise incumbents, Avaya and Cisco, will be very difficult for a vendor that's new to voice.

Prediction 4: Tablets gain double digit penetration and break Microsoft’s desktop monopoly.
Our research shows that tablets are already used by 4% of workers, which is great penetration considering there’s really only one product on the market and it's barely a year old. In 2011 we'll see the PlayBook, Cius, Flare, Galaxy and others come to market, and most of these won’t be Windows based. The more mobile our workforce becomes and the more reliant workers are on non-laptop form factor devices, the weaker Microsoft's position becomes. I've seen Windows 7 mobile and it is pretty slick, but it may be too little too late for Microsoft as Android blitzes the enterprise next year.

Prediction 5: Dell acquires a network infrastructure vendor
Over the past two years, Dell has become increasingly more aggressive in enterprise networking. The company has cut OEM deals with Brocade, Juniper and Aruba to bolster its network portfolio. Considering the data center trends of converged network and computing, I can't see OEM being a viable long term strategy for Dell--which makes me think it will acquire. Who might it acquire? If it wants to go big, then Brocade would make the most sense. However, I think Extreme Networks is a great value play at its current market cap of a shade under $300 million.

Prediction 6: Cisco's stock price stays flat
Two years ago, Cisco's stock was around $18 and today it's about $20. Relative to other networking companies such as Juniper, Acme Packet, F5 and Riverbed, Cisco’s 11% share gain is disappointing. Is there something wrong with Cisco? Heck no, at $40+ billion, the ability to continue to churn out the cash it does and grow even in high single digits is remarkable. However, it's not the 12%-17% growth that John Chambers has been using as the 5-year number. Cisco could choose to do another big acquisition—maybe EMC?--but there just aren’t that many big enterprise markets with the margins Cisco needs. If Cisco chooses to make a big splash, the stock could move but I'm betting we won’t see one in 2011.

I had ideas of some other predictions around WiFi and video but these were the main points I wanted to make. Considering the many transitions we saw in 2010, it should be a great year for this industry. On that note though, I did want to make one final prediction and that is that Enterprise Connect will be smashing success! See you all in the New Year!!