The powers of brand and legacy in the IP telephony world

Brand names and legacy equipment provide their own special inertia to incumbent vendors, all other things being equal. With belt-tightening now a national value, smaller, leaner and meaner upstarts will have the opportunity to displace legacy vendors and legacy solutions - if they can muster a successful communications plan to let people know they exist.

The cliché of 2008 has been "Nobody ever got fired for buying Cisco." The phrase that pays for IP telephony companies in 2009 will be "Give us Cisco and a more affordable alternative." Cisco's success in the marketplace is now a vulnerability. Competitors are going to compare themselves to the top brand in the market place, not the guy standing to next to them in the trenches. 

Cisco IP telephony and UC solutions will be used as the benchmark for businesses, but with everyone looking at the bottom line, people are going to want to get more for their money. Just being Cisco isn't going to win business in 2009.  You're going to see pounding of the table on support, total cost of ownership and warranties.

Give you a real-world example here at Fierce - We recently replaced the key system here with a new one. One of the options on the table was a new Avaya system or a refurb'ed Cisco one. Price was about the same. Care to guess which won?

Which brings us to the power of legacy. If the brand-X key system has worked for years in the closet without a hiccup (relatively), companies are more likely to go with what they know rather than install something different (Unless, of course, it's Cisco). There may be a long-standing relationship between the business and the vendor (or more likely between the VAR/channel guy and the vendor).  Incumbent equipment vendors may offer some sort of discount or trade-in program as a reward for buying in the past. And there's the day-after-day subconscious brand re-enforcement of the vendor's name - it's at the top of the phone.

To defeat the dual powers of brand and legacy in the SMB IP telephony space is an uphill battle. Winners will ultimately have to win three battles: with buyers/end-users, with VAR/channel partners (the guys who are ultimately selling this to the end users), and with the media - the influencers on the buyers and VAR/channel partners.

- Doug