Cisco loses enterprise collaboration leadership to Microsoft

Enterprise IT vendor Cisco has lost enterprise collaboration leadership to Microsoft in the first quarter of 2014, said Synergy Research Group.

Collaboration includes enterprise voice, UC applications, telepresence, email software, collaborative workspace software and enterprise social networks.

The report says Microsoft, which has received a new CEO, has caught up with Cisco, which is looking for a new CEO, and generated more revenue from its enterprise collaboration infrastructure activities in the first quarter. Revenues from collaboration were $5.4 billion in the quarter, with Microsoft’s overall share passing the 21 percent mark.

Total revenues for the quarter were down 1 percent year on year, as declines in enterprise voice and telepresence countered growth in other segments. On a rolling annual basis revenues reached $22.6 billion, up 1 percent from the preceding four quarters. Sequentially quarterly revenues were down 8 percent, according to the report.

Microsoft Over Takes Enterprise Collaboration Leadership From Cisco

The largest three segments are enterprise voice, email software and UC applications, which in aggregate account for 78 percent of the Q1 market. The highest-growth segment is enterprise social networks, which experienced year-on-year growth of 34 percent, said Synergy Research Group.

In Q1 2014, Cisco revenue was impacted by softness in the enterprise voice and telepresence segments, issues which affected many vendors.

Microsoft has only a small presence in enterprise voice and is not active in telepresence, but is growing its share of the UC applications segment, holding its own in email software and growing strongly in the nascent enterprise social networks segment. Microsoft has been steadily increasing its influence in collaboration markets over the last five years.

Meanwhile, Infonetics Research said the enterprise telephony market continues to struggle as businesses hold off new PBX purchases and invest instead in unified communications (UC) applications. Purchase cycles are getting longer, and competitive activity is putting pressure on the market with pricing all over the map.

Infonetics Research said Cisco, Avaya, and NEC are the PBX market share leaders; Mitel cracked the top 4 as a result of its merger with Aastra. Microsoft, who leads the UC market, is the only vendor in the enterprise telephony segment to post year-over-year revenue growth in Q1.