An increasing number of businesses are adopting hosted voice
services in an effort to avoid the cost and complexity of
premise-based solutions, according to a recent study by Frost &
Sullivan.
Businesses are also reaping the benefits of supplemental
capabilities -- including unified communications, simple-to-use
conferencing, and find me/follow me. The study recorded hosted
Voice over Internet Protocol (VoIP) services revenues at $372.6
million in 2005, with estimates reaching to $14.6 billion in
2012.
"Small businesses that account for the majority of the end users
are likely to continue driving hosted IP telephony deployments,"
Frost & Sullivan senior analyst Lynda Starr said. "Medium and
large businesses' interests in hosted IP telephony and VoIP access
service are also likely to increase."
Decreasing hardware prices, improved voice quality resulting
from advances in codecs, and tight service level agreements (SLAs)
have fueled the drive toward hosted services. Hosted services allow
businesses with limited budgets and staff to balance the cost of a
more efficient communication system with a level of available
productivity. They also offer customers the immediate benefit of
upgrades that otherwise would not be considered a practical expense
for another 10 years.
The Frost & Sullivan study also found that most companies
with a premise-based system already in place are seriously
considering a hybrid solution as they migrate to hosted IP
telephony, allowing them to continue using existing systems for a
number of years.
"As these two systems can coexist," Starr said, "service
providers are likely to offer end-user enterprises a hybrid
solution of both premise-based and hosted solutions, enabling
customers to phase in a hosted solution with a trunking service and
existing legacy equipment."
Enticing businesses to switch to partial or complete hosted
service will be VoIP service providers' biggest challenge. Hurdles
include offering customers a unique set of features that are not
available over circuit-switched offerings and a pricing model that
offers adequate return on investment to the customer.
Starr concluded that end users of VoIP found the rapid growth
potential for the hosted services reassuring when beginning a
migration from outdated Y2K-era systems. She added that small and
midsized businesses in particular stood to gain a more professional
phone appearance.