Will IP VoIP sales grow in 2009?

One must wonder what is stopping VoIP (Voice Over Internet Protocol), with its promise of cheap or in some cases free calls, from being the primary means of telephony communication for businesses today.

Will 2009 be the year where VoIP services finally make a significant impact? In pursuing this question, CRN spoke to several IP telephony experts and found that growth is undoubtedly a trend, but it’s much slower than expected.

According to Shara Evans, CEO for telecommunications analyst firm Market Clarity, take up of IP VoIP services are sluggish and she doesn’t
see that changing in the near future
.
“In general, whilst the business community has really latched onto the IP/PABX bandwagon and is increasingly implementing value-added features, I have not yet seen any notable take up of VoIP services in the business world,” she said.

Market Clarity is currently in the midst of conducting a comprehensive research on the local VoIP market due for release early next year.

At this stage, Evans said her estimate is that VoIP services make up less than five percent over fixed voice lines going into businesses today. But she admits it’s up a little bit from a year ago.

“It’s interesting, but it’s something that the business community hasn’t really thought about in terms of what other kinds of services can I use to connect my PABXs now that they’re all IP enabled.”

Furthermore, according to Frost and Sullivan’s ‘Unified Communications Services Report 2008’, expenditure on all Unified Communications (UC) services are expected to remain cautious over the coming two years due to the current financial turmoil.

However, revenues are still expected to more than double to AU$785.9 million by 2014.

In vendor news, IDC’s study, ‘Key Trends in Enterprise VoIP 2008’ ranked Microsoft, Cisco, Avaya and IBM as the top four strategic vendors for
UC adoption plans, according to survey respondents.

This is in contrast to the 2007 results, where respondents ranked Cisco, Avaya, Microsoft and Nortel as their top four UC vendors.

David Cannon
Program manager, Telecommunications, IDC

From a hardware perspective, we certainly do forecast growth in 2009 in IP telephony, voice and data convergence and the migration of those technologies.

The historical case has always shown that network consolidation offers increased efficiency and cost savings which fits in very well in times of economic crisis.

So, in a sense, that’s the reasoning why we’re saying we’re not expecting things to stop in the IP telephony market.

We can expect enterprise software to continue to grow eight to 10 percent in revenue and we can also see growth in the services side.

However, cash is king in a market like this and organisations with strong balance sheets such as the Avayas and Ciscos of the world with strong reserves are going to be able to gain market share in this time frame and that is particularly important to the channel.

It’s a great opportunity for channel players, in particular system integrators of all levels of business: small, medium and large to look at financial arrangements.

Leasing to buy arrangements should be a very good solution in the coming year for organisations and certainly there is a lot of capital financing solutions that are available by major vendors.

Vendors that do not have strong balance sheets or credit financing solutions in place for their channel partners may see there is more of a focus to particular vendors offering very good solutions around the financing of their hardware.

Essentially, whoever the channel’s networking partner of choice is will depend on how well those channels do.

Jonathan Ordman
Director, Wavelink

In general, the market is recognising the value that voice over IP is bringing, such as having one phone platform that can handle multiple sites.

Today, there’s great bandwidth to carry data and carriers themselves are certainly more pervasive in the way data is carried.

The biggest single adoption has been around the SIP Standard (Session Initiation Protocol) which is a common VoIP standard for non-proprietary devices. In the past if Cisco had a VoIP solution you had to use Cisco devices, so SIP allows you to use a range of SIP products that integrate well with good platforms.

I think as a backdrop, the general financial uncertainty will affect the industry as a whole to some degree where people might defer their move to IP telephony for a while.

But, when they do migrate the next time they buy a system the majority of new purchases will be IP-PABXs.

Meanwhile, there has been a move from the enterprise space towards the SME space, so now the channel is able to sell IP-PABXs and other open platforms.

Furthermore, you’re getting hosted services such as Telstra or AAPT that are hosting IP telephony services and there are opportunities there for the channel to sell terminals directly to those end-users.

They buy the service from the carrier and the terminals from the channel. We’re seeing significant growth particularly because there’s more of the services being available through new IP-PABX vendors coming on the scene.

There’s going to be virtually explosive growth in that end of the market in the next couple of years.