GartnerGroup's Dataquest Says Year 2000 Compliance Issues Contribute to Strong U.S. Premise Switching Systems Growth
New Report Provides Detailed Forecast of the Industry Through 2003
San Jose, Calif., May 17, 1999 — As companies increase their year 2000 upgrades on their premise switching systems, the U.S. premise switching market will experience a strong increase in shipments (39 percent growth in 1999), according to Dataquest Inc., a unit of Gartner Group Inc. (NYSE: IT).
"Because of the increased year 2000 upgrades, unit shipments will increase more than other years, but system pricing will decline as vendors offer upgrade discounts to their installed base," said Kathleen Dexter, industry analyst for Dataquest's Voice Systems North America program. "We expect 1999 to be the single largest year for the replacement of noncompliant systems, although a significant number of customers will not purchase compliant systems until 2000. This is particularly true of smaller customers."
The KTS/Hybrid premise switching systems market is forecast to continue to dominate the overall premise switching system shipments, as the KTS/Hybrid market will represent 94 percent of overall shipments in 1999 (see Table 1). Within the U.S. premise switching systems market, the 1-to-8-station segment will continue to drive the market, with systems shipments surpassing 383,000 units.
Table 1
U.S. Premise Switching System Shipment Estimates (Thousands of Units)
  1998 1999 2000 2001 2002
KTS/Hybrid Premise Switching Systems 477.5 665.2 629.0 518.4 563.8
PBX Premise Switching Systems 31.6 42.1 34.3 28.7 29.8
Total Premise Switching Systems 509.1 707.3 663.4 547.0 593.6
Note: Due to rounding, statistics may not add to totals shown.
Source: Dataquest (May 1999)
"The less-than-100-station segment will continue to see heavy price competition as the PCX vendors gain better reputations, channel partners, and product features," said Ms. Dexter. "Although some PCX vendors will be able to penetrate the more-than-100-station market, we expect the majority of these shipments to be targeted at the less than 100 station market."
Additional information on this market is available in the Dataquest Market Statistics report 'U.S. Premise Switching Systems Market Share and Forecast, 1999 This report provides market share results among the major vendors and a detailed forecast through 2003.
This report is produced by Dataquest's Voice Systems North America program. This program provides clients with an in-depth investigation of the market trends affecting enterprise communication systems. These systems often comprise PBXs, voice mail systems, and advanced speech applications. Additional information on this program is available on Dataquest's Web site http://www.dataquest.com/dq/static/offer/programs/voicnads19981130.html.
To purchase the report or subscribe to this program, please call 800-419-DATA, or 408-468-8009. More information about Dataquest's programs, descriptions of recent research reports, and full text of press releases can be found on the Internet at http://www.dataquest.com.
GartnerGroup's Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.
As the world's leading authority on IT, GartnerGroup provides clients with a wide range of products and services in the areas of IT advisory services, measurement, research, decision support, analysis, and consulting. Founded in 1979, with headquarters in Stamford, Conn., GartnerGroup is at the center of a global community with nearly 11,000 client organizations served by analysts in 80 locations worldwide. Additional information about the company is available on the Internet at www.gartner.com.
CONTACT:
Tom McCall
1-408-468-8312
tom.mccall@gartner.com