– Offering mobility and integration with third-party apps will enhance the value proposition of hosted and cloud solutions, finds Frost & Sullivan
MOUNTAIN VIEW, Calif., Oct. 14, 2014 /PRNewswire/ — The North American hosted Internet Protocol (IP) telephony and unified communications and collaboration (UCC) services market will continue to present considerable growth opportunities for service providers offering flexible and economical solutions to business customers. Focus on technological advancements will increase customer confidence in the reliability, security and overall quality of hosted IP telephony and cloud UCC solutions, adding to market demand.
New analysis from Frost & Sullivan on the North American Hosted IP Telephony and UCC Services Market, finds that the market earned revenues of $1.59 billion in 2013 and estimates this to reach $9.53 billion by 2020. Although growth rates will gradually decline year-over-year due to the large installed base, the number of annual net new users will rise consistently throughout the forecast period.
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The expansion of the remote and mobile workforce, the maturity of VoIP technologies, the move to cloud architectures for more ubiquitous and cost-effective access to communications and collaboration capabilities, and growing demand for personalization of applications and services, are key trends encouraging the shift to next-generation solutions such as hosted IP telephony and UCC.
"The need for communications infrastructure consolidation and IT operation optimization will fuel adoption in larger organizations with a significant number of remote and mobile employees," said Frost & Sullivan Unified Communications Program Director Elka Popova. "Hosted communication solutions based on multi-instance platforms, in particular, will gain traction in larger distributed organizations due to the greater security and more flexible customization they provide."
However, this migration will occur only gradually owing to the large installed base of premises-based solutions in North America, as well as customer concerns over cloud security. In some instances, the total cost of ownership of hosted solutions could be higher than that of premise-based alternatives, dissuading potential customers from migrating to third-party solutions.
Competitor fragmentation and limited provider differentiation that confuse business decision makers will further delay uptake. Customer organizations are still evaluating various options, waiting for economic conditions to stabilize and emerging technologies and business models to mature. Service providers must educate decision makers on the benefits of hosted IP telephony and UCC in order to accelerate adoption.
"Hosted communications providers must deliver greater value to their customers through enhanced functionality, compelling services bundles, and more competitive pricing," advised Popova. "Providing mobility and integration with third-party apps will further strengthen the business case for hosted and cloud solutions."
In addition, service providers need to supplement this organic growth with mergers and acquisitions to gain market share and improve overall financial viability—factors that will become vital in the selection of service providers and solutions among North American business customers.
Analysis of the North American Hosted IP Telephony and UCC Services Market is part of the Enterprise Communications (http://ww2.frost.com/research/industry/information-communications-technologies/enterprise-communications/) Growth Partnership Service program. Frost & Sullivan’s related studies include: European Hosted IP Telephony and UCC Services Market, Global Enterprise Communications Platforms and Endpoints Market, Global Contact Center and Office Headset Market, and Global Enterprise Social Networking Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Analysis of the North American Hosted IP Telephony and UCC Services Market
Corporate Communications – North America