Cisco's IP Progress

Cisco Systems racked up an eye-catching contract today with a deal to sell 180,000 IP phones to Bank of America - replacing traditional phones in 5,800 offices and branches in 29 states. Cisco, which ranked second behind Avaya Inc. in the US$726-million IP phone business last quarter according to the Synergy Group, said it has sold 3.5 million IP phones since entering the market in 1999. Don Proctor, vice president and general manager with Cisco's voice technology group, said the company is selling IP phones at a rate of two million per year – two to five times as many as any other competitor. He said this translates into the replacement of 8,000 traditional business phones a day. Although Cisco's progress in the IP phone market seems impressive, it is difficult to put into context how quickly the IP market is moving forward. In the scheme of things, what's the penetration rate of IP phones? 1%, 5%, 10%? Call me a pragmatic skeptic but numbers can be torqued to tell a story in different ways. There is no doubt IP telephony is going to make a huge impact one day, but you have to always keep in mind that hot high-tech trends are badly over-hyped, and IP telephony fits the bill.