Communications-as-a-service taking hold
Communications-as-a-service is taking hold worldwide as a viable hosted IP telephony system.
The $251.9m total is a jump of 37.6% over last year and an indicator that the market for communications-as-a-service will continue to climb as providers learn more of the particulars. Gartner predicts that the communications-as-a-service market will hit a whopping $2.3bn by 2011, representing a compound annual growth rate of more than 105% for the period.
One reason communications-as-a-service isn't exploding out of the starting gate, however, is lack of provider knowledge. According to the report, providers are still trying to determine to whom to define, package and market services as a value-added IP telephony offering.
In the report, titled "Emerging Communications Services (Hosted IP Telephony, IP Centrex and CaaS), Worldwide, 2006-2001," Gartner defines communications-as-a-service as IP telephony that is located within a third-party datacenter and managed and owned by a third party. The assets are not carrier-grade, the service is not in the network, and the assets are multi-tenant in terms of usage, Gartner says.
But the growth of communications-as-a-service within corporations will take off once users find its true usability, according to Eric Goodness, research vice president at Gartner. It will grow further as companies realise they won't run the risks associated with having their own in-house communications systems.
"Users will begin to embrace communications-as-a-service more enthusiastically in 2009, attracted by predictable costs for fixed telecoms," Goodness said. "Users will also be attracted to communications-as-a-service as a means of shifting technology risk to the service provider. Technology obsolescence will be more easily managed by a scalable third party."
The largest growth for communications-as-a-service will occur between 2010 and 2011, when the market jumps from $1.2bn to $2.3bn. In the years leading up to the market's boom, communications-as-a-service will grow gradually, hitting $576.2m in 2008 and $742m in 2009.
Communications-as-a-service's slow start will be compounded by a longer sales cycle, Goodness said, as users need time to get used to higher, but better consolidated, pricing.
"A single bill that consolidates telecom services with equipment infrastructure will gain acceptance," he said. "Providers are bullish about communications-as-a-service's potential because of the opportunity to bundle more new features and capabilities to avoid service commoditisation."
