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Ericsson Gets Small

Light Reading
LR Mobile News Analysis
Light Reading
8/31/2006

Pushing into a market where it has little previous track record, Ericsson AB (Nasdaq: ERIC), the world's largest provider of wireless networking equipment, has released a new telecom platform aimed squarely at small and medium-sized businesses (SMBs) in North America.

Successfully sold in Europe for more than two years, the MD Evolution is an IP-PBX system with full mobility capability, designed for businesses that have a handful of users up to about 200. Like the large-enterprise-focused MX-ONE platform launched a year ago, the new platform gives mobile workers the ability to define which mode of communication (voice, mobile phone, email, instant messaging, and so on) they wish to be contacted on at any given time. It also provides full VOIP capability to smartphones as well as unified messaging so users can access voice and text messages from any device in any location. (See Ericsson's Way Forward.)

"Mobility, mobility, mobility," answers Ericsson director of product management Edward Lambert when asked about the key selling point of the new platform. The Evolution provides seamless mobility for organizations either in single buildings or between branch offices and can be purchased either as a standalone platform or as an add-on to existing PBXs (in which case it's known as "Ericsson Branch Mode"). Besides representing Ericsson's attempt to become a player in the SMB market, the new platform could give smaller businesses the sort of comprehensive features and mobile functionality that were previously too expensive or too cumbersome to manage.

"We have a lot of small enterprise customers today where essentially the whole workforce is mobile," observes Manuel Taveira, national sales director of D&S Communications, an Elgin, Ill.-based reseller of telecommunications equipment. "I can envision selling systems that have just one or two desk phones and the rest of them mobile devices."

In business for 20 years, D&S has revenues of between $15 million and $20 million and is growing 20-25 percent a year, says Taveira. The new Ericsson product gives his company the ability to offer features to smaller businesses that were previously available only in scaled-down versions of larger enterprise-focused systems.

"The price point [for that type of system] was definitely higher, it was a rock-solid product, but sometimes these smaller companies had price-shock," Taveira says. "That's why we're excited about the Evolution coming out, because it really has everything in one box at a price that smaller companies can afford."

That includes support for DECT (Digital Enhanced Cordless Telecommunications) phones, used in in-building networks, as well as the ability to save money by routing mobile calls through the company PBX.

As an example, Taveira mentions a Houston-based customer that, despite its relatively small size, has operations in Europe and North America. The Houston IT helpdesk was swamped by calls from its 100 or so North American users. Now, with MD Evolution, the company will be able to route those calls at little extra cost to the company's helpdesk in Germany.

"They can leverage the organization's complete backbone at no additional cost other than the initial license fee," remarks Taveira.

The release of MD Evolution comes at a time when many smaller companies are moving from legacy PBX systems to new IP-based architectures that support a variety of mobile applications.

"The U.S. alone represents 30 percent of the world [telecom equipment] market," says Lambert, "and SMBs are 75 percent of that. It's a huge market."

— Richard Martin, Senior Editor, Unstrung

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