While enterprise PBX (private branch exchange) product lines continue to register the highest level of growth in the telephony 
market, newly emerging trends will eventually realign use and deployment patterns, according to a survey conducted by market researcher Dell'Oro Group.
These include a shift to hybrid systems and a nascent push by SMBs (small and medium-sized businesses) to deploy IP (Internet protocol) applications, said Steve Raab, the firm's director of IP telephony research.
During the first quarter of this year, revenues in the enterprise PBX market climbed 6 percent over the same quarter a year ago -- and that was the only segment that grew sequentially this year, Dell'Oro reported. The growth was fueled by such providers as NEC (Nasdaq: NIPNY) 
, Siemens (NYSE: SI) and Inter-Tel, Raab told CRM Buyer.
Shifting to Hybrid
However, hybrid products that combine both traditional and IP PBX functionality, are positioned to be the fastest-growing segment in this market over the long run -- five years or more -- Raab found.Adopting a hybrid system makes sense for the majority of the traditional installed base, Raab explained. "These companies can still upgrade their core systems without having to retire the handsets."
In this group, Avaya (NYSE: AV) , Siemens and Cisco (Nasdaq: CSCO) registered the largest annual increases; Avaya led the way with 23 percent year-over-year growth.
"In addition to the shift from traditional PBX to the hybrid and IP versions, we are also seeing a shift of desktop telephones for an IP line. In the market today, one in four phones that are sold [is] an IP line versus a traditional digital or analog line," he added.
Small Business Demand
Another trend, albeit less compelling to market participants intent on servicing the enterprise space, is the growing demand by very small businesses -- defined as having less than 20 employees -- for IP PBX products, Raab said.
This demand has been addressed by nontraditional vendors -- specifically providers of data networking equipment -- that see an opportunity to build a niche in this space.
These vendors include Linksys, Adtran and D-Link Systems. "Their entry into the SMB market introduces a new type of competitor," Raab said.
At the same time, large providers such as Avaya and Siemens are also starting to move downstream, introducing peer-to-peer IP PBX products targeting SMBs.
The entrance of the big players, Raab said, might fuel demand among smaller firms.
"Historically it has been the enterprise company that would buy these products, but as more companies target SMB," he predicted, "I think adoption will increase in this sector as well."
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