THE IP PABX RACE – SEPTERMBER 2004
Commander/RSLCom vs Telstra/Damovo – The IP PABX battle is well and truly on.
Some interesting developments have happened since Telstra was confronted with RSLCom becoming the new partner in Commander, Telstra’s old PABX division. Telstra clearly was not happy with that move, but as a minority shareholder couldn’t do much about it – and so they decided to quit. Too late they saw their strategic blunder as they now had lost a major channel into the SME market. They had a do an expensive back flip a few years later to rectify this bungle.
But before that happened, the combined Commander/RSLCom company rapidly started to integrate their businesses in order to prepare themselves for the new IP-based direction. Although there is still some life left in them, PABXs are on the way out, with IP-based technologies making this equipment obsolete. However, Commander has so far been slow to actually deliver IP based solutions.
And by 2004…..
Enter Darthvader. To the surprise of many, Telstra entered the IP market. Most would argue that VoIP would eventually cannibalise Telstra’s lucrative voice market, so one would not expect them to welcome this disruptive technology.
But, in the first place, Telstra has little choice in the corporate market, as the customer is in control there and if Telstra doesn’t offer VoIP there are others who will be happy to fill the bill.
And that was not all. After it recognised its strategic mistake re Commander, the company rapidly turned around to find ways to claw back some of its lost territory. For this they turned to their key mobile dealer Crazy John. Millions of Telstra dollars were pumped into this dealership with the aim to attack Commander. However, as in most of Telstra’s partnerships also this one turned sour, and the whole thing rapidly ended up in court.
In April 2004 Telstra indicated it was looking for a new way to move back into the PABX/SME market with the aim to launch a serious attack on the Commander business, and, this having been its own business in the past, it might still be able to dig up some of its contacts in this market and use its prior knowledge to advantage. Bad news for Commander, as they now have to battle the might of Telstra.
Telstra’s unhappiness regarding its handling of the Commander business is resulting in a very nasty situation indeed. It’s no wonder that competitors often say they prefer to keep a low profile and operate under Telstra’s radar.
But as we are living in interesting times the story continues. In May 2004 Optus indicated its interest in Commander, it also sees the importance of the IP PABX market. It would also give the Commander business a much stronger foundation to compete from.
These negotiations apparently didn’t progress well because a few month later Optus was negotiating to buy Commanders’ rival; Damovo. This company came into existence a few years earlier when Ericsson sold off its PABX maintenance business.
However, that deal fell through when it was announced in September 2004 that Telstra had been able to buy this business for $64 million.
I am sure that we have not seen the end of the consolidation in this part of the business.
See separate reports:
Australia – Internet – VoIP – Stats, Overview, Analyses;
Australia – Internet – VoIP – Services and Projects.
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