Integrating hosted IP telephones with applications should help vendors and service providers gain market share and increase revenue, reports Frost & Sullivan. The firm expects the number of installed, hosted IP telephony lines to grow to 3.6 million in 2014, up from one million in 2008.
The firm says applications providing the most opportunity include unified communications (UC) applications like chat, presence and conferencing as well as business applications like content rights management, enterprise resource planning and communications-enabled business processes.
“Small businesses will continue to be attracted to hosted IP telephony offerings primarily for cost-efficient voice communications, although some of them will also choose a hosted offering for the ability to gain access to a complete UC package from a single provider,” says Frost & Sullivan Global Program Director Elka Popova. “Medium and large businesses will also appreciate the economies provided by hosted IP telephony, but will seek such solutions mostly so they can focus on core business processes and gain access to applications and capabilities that they can test without making a capital investment.”
Despite the benefits offered by integration, significant technology enhancements to premise-based solutions and extensive private branch exchange vendor channels present barriers to further market penetration.
Frost & Sullivan says IP telephony vendors will have to develop solid channel strategies because most companies in the market are small, next-generation providers with a small geographic footprint and limited service support capabilities that have no established customer base or brand recognition. As a result, service providers should expand and diversify channels and strengthen customer relationships based on specific portfolio requirements.
Overall, the firm expects that the North American market will remain extremely fragmented due to low barriers to entry, limited demand for next-generation hosted telephony services among the market’s Centrex customer base and the reluctance of local exchange carriers to increase market share for fear of cannibalizing their legacy service revenues.
Filed Under: Infrastructure