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On HP Closing Down VCX IP Telephony & Choosing Microsoft

6th February 2011 by 9 Comments

This week saw the HP announcing the closure of future development on their IP telephony product, the VCX. Although not entirely unexpected, but it’s somewhat unusual since HP has pledged to continue with just about every other product acquired as part of the 3Com purchase. Further HP has been pledging to the reseller base to maintain the product over time but has now decided to discontinue any future development.

By “future development” they mean that there will be no more research and development or features added but the existing product will be maintained extensively as this : Setting the record straight on VCX, VoIP and UC& . If you take the view that the current product is feature complete and needs no further enhancements then this might be worthwhile but it seems clear that the long-term future of the product is over.

What does this mean for IP telephony?

In short this leaves the IP telephony/unified communications market to Cisco and Microsoft to duke it out for competitive placement. Let’s forget about minor players such as Avaya, Mitel blah blah blah blah, since their market penetration is limited to specific niches.

The Microsoft Unified Comms product is vitally important to Hewlett-Packard since they already have extensive partnerships with Microsoft to sell the product. There have been several announcements over the last year or so that are clearly alignments between HP and Microsoft in terms of IP Telephony/Unified Comms and in the end the bigger partnership seems to have become dominant.

Impact on strategy?

The VCX products were clearly targeted at SME markets which is not a market that HP traditionally is attacking. HP partners and resellers may well be disappointed about the loss of this product providing a rounded out portfolio, but it does look like a legacy PBX play and does not offer a long-term future in terms of presents telephony video and so forth.

The EtherealMind view

While it’s disappointing for HP resellers who feel the product should have a future frankly it doesn’t and you need to think bigger about the impact of software driven voice as well as the impact of mobile telephony to see that it never had a future. What’s far more interesting is that HP has chosen to align with Microsoft and clearly outline a competitive stance to Cisco in the unified comms space. Given that many companies are looking for a full spectrum solution to include voice technologies, then this makes considerable sense. It also confirms the competitive landscape between HP and Cisco is head-to-head.

By choosing to partner with Microsoft, this may also lead to further partnerships that include technology such as Hyper–V to directly oppose Cisco and VMware positioning. Although Cisco continues to protest its vendor independence it is also clear their primary partnership is with VMware and this includes a 5% financial stake.

The competitive landscape between Cisco and HP is clearer with this announcement.

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About Greg Ferro

Greg Ferro is a Network Engineer/Architect, mostly focussed on Data Centre, Security Infrastructure, and recently Virtualization. He has over 20 years in IT, in wide range of employers working as a freelance consultant including Finance, Service Providers and Online Companies. He is CCIE#6920 and has a few ideas about the world, but not enough to really count.

He is a host on the Packet Pushers Podcast, blogger at EtherealMind.com and on Twitter @etherealmind and Google Plus

  • Seba

    Hi,
    Fact is that they had to do something with their UC product portfolio, either kill it or try to get it better and gain stronger market position. To be honest I thought that they will give it a try and focus on R&D of the product, so they can still compete in almost every area of IT market with Cisco (and others). On the other hand, I didn’t believe that they can get even close to the leading heavy weight Cisco & Microsoft or become competitive to companies like Avaya, Alcatel, etc.
    At the end of the day, killing VCX and joining forces with Microsoft, was (probably) the best they could do.

    Cheers,

    Seba

  • Nick Minaj

    Avaya is a minor player? Either you’re not that plugged into the market landscape for IPT or you’re so biased to certain vendors that you’re blinded to the other major players in the market…either way, to call Avaya a minor player is big misstatement.

    • http://etherealmind.com Greg Ferro

      I can assure you that, on a global basis, most people just say “Avaya who ?” and that’s after the Nortel EBU acquisition. Avaya continues to be a player in the Americas but not significant anywhere else.

      Plus, they aren’t perceived as a competitor to either Cisco or Microsoft in terms of UC.

      • Nick Minaj

        I think it is more like “3Com who?”

        Telephony is still the most critical component of UC – that may shift in the longer term as adoption of video, presence and IM (among others) continues taking hold, but telephony is still the most important part.

        Avaya is in the leader’s quadrant in Gartner’s MQ for Corporate telephony – of course, you can’t take anything Gartners says as the last and final word, but it is certainly respected enough to matter quite a bit. The combination of Nortel into the portfolio makes them even stronger in terms of technology, market acceptance and adoption or any other metric you want to us. HP/3Com had the worst showing of any vendor.

        http://www.nojitter.com/blog/225900116

        Cisco is the global market leader in terms of lines shipped and Avaya is the global market leader in terms of revenue.

        • http://etherealmind.com Greg Ferro

          You are talking to the wrong person. I think voice is finished and mobile handsets are the future. It’s just entrenched habits and backward thinking that means corporate telephony exists at all. My point is that “presence” is the future, and only Cisco and Microsoft can compete in that space. With maybe Apple attempting to move into it.

          Everything else is legacy equipment. Maybe ten or twenty years, but it’s not a part of my future. Good luck with the voice stuff.

          • Nick Minaj

            I’m just responding to your way off base statement that Cisco and Microsoft are essentially the only participants in the IP telephony market and that Avaya is a minor player – the debate is not even there – look at the analysts and research data.

            Your feeling that enterprise voice’s future is in on the mobile handset could be correct at some point in the future, but there are tons of actual business uses for keeping a stationary handset or softphone.

            The fact that corporate telephony exists at all is “backward thinking?” Ok, now, that is just laughable. Have you ever tried to run an enterprise business primarily based on voice frmo mobile devices – I didn’t think so.

        • http://etherealmind.com Greg Ferro

          Haven’t had a desk phone in seven years. So yes, I have. I use email, chat, SMS text, Skype or as a last resort, mobile voice for corporate comms.

          Oh and Presence is not IP Telephony, IMHO. Avaya does IPTel, Cisco and MS do Presence which is a significant superset thereof and far different.

  • JasonG

    This product had a sizable market in schools and other budget sensitive larger deployments. It seems to me an approach of spinning off a new company could have been a profitable venture.

    • http://etherealmind.com Greg Ferro

      HP has too much going on to do that – because the statutory requirements for a sale make it difficult. Plus who would pay serious money to have it ? For HP a few tens of millions isn’t worth the admin costs.

      Easier to just keep selling what you have, put it into bug patch only and exit.