Enterprise VoIP Gateways- Still a Strong Sales Performer

Enterprise VoIP Gateways are defined as a Layer 3 network device either standalone or integrated, which provides the interconnection of Enterprise voice/data traffic across a WAN network or PSTN, also referred to as trunks. This network application is performed on either a standalone gateway, which Synergy defines as a Standalone-Enterprise VoIP Gateway or as an integrated application whereby a module or card with DSP resources is integrated with an Enterprise router or server, which Synergy defines as an Integrated-Enterprise VoIP Gateway.

In Q3 2009, the market for Enterprise VoIP Gateways increased 12.7% sequentially. Since late 1999, Enterprise VoIP Gateway sales have increased significantly growing from a quarterly run rate of under $50 million in 1999 to $400 million in Q3 2007.  The market was first started by the VoIP opportunity of toll-bypass; today, the market is driven by the need for integrated, remote IP telephony interconnections. In the future, we anticipate the application of gateway functionality to experience competitive pressure from the growing availability of SIP trunk lines.

Market share leaders for the quarter were Cisco, OKI, Alcatel-Lucent, NET/Quintum, AudioCodes and Avaya with respective market shares of 84.9, 2.8, 2.5, 2, 1.7 and 1.4%. Cisco has maintained a clear advantage in this market since its inception by virtue of being the dominant enterprise router vendor and successfully marketing VoIP functionality on the ISR platform. A strategy successfully implemented also for network security applications and more recently for video.

Today the majority of VoIP Gateway ports shipped are from integrated VoIP gateways housed on Cisco’s ISR routers. Today integrated VoIP gateways represent 84% of the market. Standalone gateways are growing as percent of total gateways sold, growing from 13% in 2006 to 16% in 2009. The market for standalone gateways remains highly competitive - as we see with the demise of Vegastream over the last couple of years. Stand alone gateway vendors who have carved a good niche for themselves have done so by delivering some form of cost or technical advantage of DSP or PBX signaling as seen by AudioCodes, MultiTech, NET/Quintum, and Vanguard’s continuing success.

In reviewing the market shares for Standalone gateways, we see Cisco has less of a lion share. In Q3 2009, market share leaders were Cisco, OKI, NET/Quintum, AudioCodes and Dialogic with respective market shares of 50.7, 18.9, 13.1, 11.1, and 2.8 %.

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