Hosted VoIP goes better with UC

Frost & Sullivan says integrating unified communications (UC) applications such as chat, presence and conferencing, as well as more enmeshed apps such as CRM and ERP, into so-called communications-enabled business processes will provide the most opportunity for the hosted VoIP market.

Close to 1 million installed hosted IP telephony lines were installed at the end of 2008, says Frost's new report "North American Hosted IP Telephony Service Markets." The firm expects the number to grow to about 3.6 million lines in 2014, with small businesses attracted to hosted offerings for cost-effective voice communications. Medium and larger businesses will seek out hosted solutions so they can focus on "core business processes," as well as to get access to apps and capabilities they can test without a capex spend.

IP telephony vendors will have to develop "astute" channel strategies since most service providers are smaller, next-generation providers with limited geographic footprint and support capabilities, no established brand-name recognition, and no established customer base, says Frost.

Frost recommends that service providers expand and diversify their channels, but believes the market will still remain "extremely fragmented" due to the reluctance of incumbent carriers to grow market share at the expense of cannibalizing legacy service revenues, along with limited demand for next-gen hosted services among their existing Centrix base.

Regardless of who is selling - CLEC, SaaS/hosted providers, VARs, or system integrators - channel support will determine the success of each provider's chances.

The crystal ball also sees providers taking advantage of M&A opportunities based on complementary technologies, expertise or channels, since consolidation can help improve customer awareness and margins.

For more:
- Frost summarizes its new report [1].