Unified Communications Market to Hit $4.2B by 2014

Enterprise IT managers will ultimately 'get' the benefits; hosted providers will bring the technology to smaller businesses.

By Ed Sutherland | Posted Dec 7, 2009
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Nothing better typifies the maxim "the whole is greater than the sum of its parts" better than unified communications, which connects IP phones, messaging, and other telecom technologies to create a new information exchange.

To emphasis the point, recent research points to a "steeply rising curve of adoption" that estimates the UC market will reach $4.2 billion in 2014—up from just $302 million in 2008.

Key to the rapid expansion will be large enterprises that discover, for example, the IP phones they purchased for cost savings can be connected to their e-mail systems, producing an even better result: visual voicemail.

"Companies have been buying only those component technologies that they think will deliver immediate value," ABI Research practice director Stan Schatt told Enterprise VoIPplanet.

"It’s only later they that they start tying it all together as true unified communications," he said.

Large enterprises needing to connect far-flung locations will be the first to realize the benefits of UC. However, this new discovery of unified communications will test how well gear manufactured by several vendors works together. Not even Cisco, one of the largest IP vendors will be able to meet demand without developing partnerships. Some have described this a ‘too many cooks in the kitchen’ problem.

"In the telecom area, for example, people might be looking at Cicso, Avaya, Nortel solutions, while on the data side they may be a Microsoft shop or a Novell shop, or they may have plans to do Linux or a little bit of Apple," Jim Koniecki, an IP vendor, told this publication.

As always, rain brings smiles to umbrella-makers. So too will UC’s expansion create opportunities for companies offering a solution.

Although one way to avoid interoperability headaches is to stick with end-to-end solutions, much more common will be a push to upgrade older equipment.

Another component of the coming rise in UC uptake will be the ongoing boom in managed services.

"unified communications is tricky and many companies won’t want to spend the time and effort to do it themselves," Schatt said. Small businesses, especially, will be attracted to a managed alternative.

Among the factors inhibiting growth are internal enterprise squabbles or myths. UC vendors must combat corporate "turf wars"—as well as a lack of understanding of the benefits of unified communications, along with the high initial costs, according to the research firm.

While this report predicts enterprises will finally ‘get it’ about UC, we’ve heard other analysts subscribe to the ‘Waiting for Godot’ scenario. (It will never actually arrive.)

unified communications could reap $18 billion in revenue by 2012, when "millennials"—those born between 1981 and 2001—enter the enterprise ranks.

"They're used to clicking to communicate with people," said In-Stat senior analyst Dave Lemelin in late 2008.

Only time will tell whether this most recently envisioned second coming of UC does in fact materialize.

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