VoIP Service Revenues and Enterprise Adoption on the Rise

Enterprise IP voice adoption is up by 46 percent. Services revenues are projected to hit $20 Billion by 2009—though small businesses are lagging behind.

By Sean Michael Kerner | Posted May 11, 2005
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Enterprise VoIP spending was up by 46 percent in 2004 and service revenues are forecast to grow by over 1,400 percent over the next five years according to Infonetics Research. Yet despite the rosy predictions, not all segments of the North American marketplace are currently broadly embracing VoIP.

Though future predictions for the market are robust, to say the least, SMBs currently seem to be lagging behind in terms of VoIP adoption. According to the Infonetics Research study, User Plans for IP Voice, North America 2005, only 4 percent of small organization in North America will have adopted VoIP by the end of 2005. In contrast, 29 percent of large and 16 percent of medium sized business will have VoIP by years end. In terms of residential/SOHO subscribers, Infonetics Research's, VoIP Services report expect the market to grow to 20.8 million users by 2008 up from 1.1 million in 2004.

Infonetics identified a number of reasons why some enterprises are not moving to VoIP, including cost of VoIP deployment as well as the perception that the currently utilized technology (usually TDM) is good enough. Nonetheless, TDM PBX is forecast to decline at headquarters sites down to only 8 percent by 2007 from 29 percent in 2005. In a telling statistic, among those that are using VoIP, only 12 percent are utilizing the technology for "just" basic voice features.

?Organizations will spend an average of $194,000 on CPE (customer premises equipment) by 2006, up from $85,000 in 2003. Hosted VoIP services spending is forecast to grow to $249,000 in the same period, compared to $158,000 in 2003, according to the Infonetics study. On the whole, VoIP service revenue is expected to hit 20 billion by 2009 an increase of 1,431 percent over the $1.3 billion in revenue recorded for 2004.

Matthias Machowinski, Directing Analyst, Enterprise Voice and Data at Infonetics noted that most of the User Plans for IP Voice, North America 2005 findings were in line with last year's observations, and that there were few surprises.

"One thing that did surprise me was how unimportant respondents found mobile capabilities like Text-to-speech, Speech-to-text, and voice-activated commands," Machowinski told EnterpriseVoIPplanet.com. "Some vendors are using those in advertising to show how IP voice can 'transform your business,' but the people we talked to were lukewarm toward it."

As an emerging trend users are also paying more attention to VoIP security than they have in the past.

"Security already shot up as an implementation barrier this year (compared to last), and as more and more organizations place voice traffic on their data network, I would expect that trend to continue," Machowinski said.

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