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Industry Imperatives
November 2000

Mary Bradshaw The (Finally) Growing Unified Messaging Market 


Go Right To: Diagnosis: Unified Messaging

One day it will be difficult to understand how anyone got anything done when e-mail, voice mail, and fax were separate systems, each requiring distinct skill sets and devices. Unified messaging now brings all messaging technologies together in a single user-friendly interface, enabling anywhere and anytime access to all messages from any communications device. Unified messaging is an appealing concept with broad benefits for organizations of all sizes. For knowledge workers it provides easy access to information anywhere, anytime. For businesses it saves time, increases productivity, and lowers the total cost of ownership of messaging services. For independent software vendors, system developers and service providers, it provides an expanding global market for new products and services. Unified messaging links people -- any time and anywhere -- to others and to critical, time-sensitive information, increasing productivity.

Unified messaging is an emerging technology that enables individuals to access voice mail, fax, or e-mail messages from a device of their choice, either on a phone or PC. Unified messaging systems can convert text to digitized voice, enabling users to check their e-mail from a telephone. Similarly, it is possible to retrieve voice mail from a PC in the same fashion as one normally retrieves e-mail.

The unified messaging industry has progressed more conservatively than the more enthusiastic predictions made on its behalf. Some of the impediments to growth are technical, such as a lack of open standards and a unifying architecture to base systems upon. Others are economic as end users seek to move to unified messaging in such a way as to preserve their legacy systems. Also, telecom and MIS departments long resisted sharing responsibility and access to one another's networks. Now things have changed. With the advent of voice-over-IP and broadband access to the Internet, the data and telecom sectors see the importance of working together, providing instant access to messaging, and making people more productive when mobile.

The development of unified messaging has also been accelerated by the emergence of standards for converting data and voice from one medium to another. With the rise of the Internet and its standards for e-mail format and delivery, Simple Mail Transport Protocol (SMTP) and Multimedia Internet Mail Extensions (MIME), it is possible to turn any message into an e-mail. As long as the information can be digitized, it can be stored and transported using SMTP and MIME.

It is hoped that as more standards-based products are sold, replacing proprietary products, the interoperability will allow end users to send voice mail to different systems as they do with e-mail. Additionally, demand should be spurred by the fact that the voice mail sent over the Internet is free from long-distance charges.

The Growth Of Unified Messaging
The market for unified messaging is expected to enjoy incremental, sustained growth in the next few years. The unified messaging market is comprised of software and services segments, with both segments growing. In 2000, the software segment of the market will total $726 million, more than double the services market figure of $295 million (Table 1), according to preliminary findings of the Multimedia Telecommunications Market Review and Forecast.

Over the forecast period, however, the services market will be the faster growing segment, surpassing the software segment in 2003. The services segment is projected to jump from $295 million to $2.1 billion in 2004, growing at a 63.3 compound annual rate. The software segment will grow at a more modest 29.1 percent compounded annually, reaching $2.0 billion in 2004 (Table 2). Overall, unified messaging revenues are projected to reach $4.1 billion up from $1.0 billion in 2000.

"The marketplace is forcing service providers to increase their value by moving toward converged (e.g., voice, data, wireless, wireline) services and enhanced service bundles. This enables them to seamlessly integrate the flexibility, scalability, services, and customer base of the Internet with the ubiquity and reliability of voice," says Arthur Gruen, principal author of the Market Review and Forecast. "Unified messaging is recognized as a key offer for service providers to enhance services in order to mitigate the margin erosion of network service providers and keep customers loyal in the face of competition."

Most large organizations have not moved towards a unified messaging system primarily because of the cost of overhauling their voice mail systems. Larger organizations with a high percentage of mobile workers would most likely try it first. In the meantime, unified messaging is achieving penetration with smaller companies and the residential market.

Now that the unified messaging marketplace is beginning its growth cycle, unified messaging solutions are coming to the market in various shapes and sizes, flexible enough to support the growing demands of customers and changes in business strategy.

The first group of unified messaging products was developed by vendors of voice mail systems that integrated e-mail functionality into their voice mail systems. Nortel Networks entered the market with its CallPilot system, a Windows NT system that integrates with a company's existing system. Applied Voice Technologies (AVT) is marketing callXpress, which offers unified messaging for OS/2 and Windows environments. Lucent introduced Unified messenger, the first software to integrate voice mail with Microsoft Exchange.

Several telcos and ISPs, including AT&T Worldnet, GTE Internetworking, and Infonet Services, are developing unified messaging services that will be marketed to companies that want the functionality of the service without the capital outlay. While the ISPs and telcos are busy developing their systems, a number of service bureaus have been marketing the service to small businesses and home users. JFAX was one of the first service bureaus to offer service to the residential community as well as mobile workers.

According to Richard Long, executive VP and COO, Next-Generation Messaging and Telecom Solutions, The VIA Group, "We all want results more quickly -- as consumers, as businesses, as individuals. This impatience for results has fostered a business environment that is more competitive than ever. In order to succeed in this competitive world, businesses must be more customer-centric than ever before. Good communications is key to creating and maintaining customer loyalty and unified messaging is one of the technologies that will enable businesses to gain a competitive advantage in an increasingly competitive marketplace." 

Mary Bradshaw is president of the MultiMedia Telecommunications Association (MMTA). The MMTA, a subsidiary of the Telecommunications Industry Association (TIA), is driving the convergence of communications and computing business applications that has opened up a wealth of new opportunities for distributors, value-added resellers, manufacturers, software developers, carriers and corporate users. 

Table 1

Unified Messaging Revenues ($ Millions)

Year Software Services Total
1998 248 81 329
1999 402 148 550
2000 726 295 1,021
2001 1,026 603 1,629
2002 1,317 1,085 2,402
2003 1,633 1,641 3,274
2004 2,018 2,115 4,133
Source: Frost & Sullivan

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Table 2

Growth Of Unified Messaging Revenues (%)

Year Software Services Total
1999 62.1 82.7 67.2
2000 80.6 99.3 85.6
2001 41.3 104.4 59.5
2002 28.4 79.9 47.5
2003 24.0 51.2 36.3
2004 23.6 28.9 26.2
2000-2004 29.1 63.6 41.8
Compound Annual Growth
Source: Frost & Sullivan

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Diagnosis: Unified Messaging

Unified messaging applications can improve patient services in hospitals by providing doctors instant notification of and telephone access to voice, e-mail, and fax messages. According to Joe Beland, product marketing manager at Siemens, there are many cases for deploying unified messaging in a healthcare setting.

Collaborative Diagnosis -- Unified messaging can be used to improve patient services by allowing medical professionals to more easily share and exchange information needed to diagnose and treat a patient. For example, an on-duty nurse in a triage unit might not know how to respond to a voice mail she received requesting medical attention, given a peculiarity she noticed in the patient's medical history. Using unified messaging, the nurse can attach the patient's medical records to the voice message and send it to a colleague who is able to review the data and quickly assist with the diagnosis.

Remote Access To Information For Diagnosis -- A doctor, located some distance from the office, is waiting for a patient's medical image (PACS) to forward to another doctor who will assist with the diagnosis (or perhaps make diagnosis while he/she is out of the office). The unified messaging application can page the doctor to let him know when the PACS image arrives in his unified inbox.

Instant Message Notification -- A patient is ready for surgery, but the doctor is awaiting confirmation from the insurance company regarding coverage for procedures. Or, perhaps the doctor is waiting for some patient information to be delivered before the patient can be pre-medicated. Using a unified messaging solution, the doctor can be notified the minute this information arrives (either via pager or phone), thus reducing the time and expenses associated with such delays. 

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