September/October 2001

BY MARC ROBINS

The first report, entitled "Voice Portals and Hosted Services: The Market Reinvents Itself," examines the state of the voice portal and services market, profiles the leading vendors, and forecasts revenue potentials for the next five years. The upshot is that the voice portal market has up until now mostly failed at providing consumers with once promising information and e- and m-commerce opportunities, and is in the process of reinventing itself. The new business model, according to the researchers, is that voice portals are now selling both hosted and packaged voice application solutions to businesses and service providers and are in many cases in direct competition with Interactive Voice Response (IVR) and call center vendors.

According to Brian Strachman, senior analyst for In-Stat's Voice Applications Research Service, "Many big name portals such as Tellme, BeVocal, HeyAnita, Audiopoint, and ShopTalk are now focusing their efforts on the hosted voice model. By using cutting edge speech recognition technologies, these companies are after the traditional IVR market and much more. By voice-enabling a Web site, call centers, or any corporate database, these vendors can save corporations millions in manpower and administrative dollars. The future lies in both employee and customer facing applications. Even in today's uncertain economy, these companies have strong potential, and by targeting a new and viable market, voice portals have reinvented themselves and will continue to offer innovative ways to communicate with the Internet via voice."

The research also found that by both cannibalizing IVR markets and creating new business, the voice portal and voice services market will exceed six billion dollars in U.S. revenue. Voice portal vendors are also beginning to license their products as IP (intellectual property). As this trend continues, voice portals will begin to license software and hardware in packaged formats. The report also showed that the three key markets for voice portals are the enterprise, call center, and service provider markets.

OF IDCs
The next In-Stat study that piqued my interest is focused on how traditional voice carriers are moving up the value chain by adding Internet Data Center (IDC) services to their mix of offerings. The report, entitled "Emerging Internet Data Center Strategies of Carriers," profiles 10 carriers that are leading IDC service providers and discusses their service strategies and IDC deployment plans.

According to In-Stat, the IDC has emerged as a key vehicle for carriers to move up the service value chain by offering new services to their data networking customers. The IDC is defined as a next-generation central office designed to meet the new economy demands of e-business. The report finds that carriers are expected to be filling their existing IDC capacity and building new IDCs over the coming years, resulting in a significant increase in worldwide carrier IDC revenues for collocation, managed hosting and applications, storage, and content delivery services.

The IDC offers a set of outsourced Web site and data management services for businesses, which relieve them of IT staff requirements or having to operate their own corporate data center. Along with these services, carriers also bundle data networking services to provide connectivity from the IDC to other company sites, remote users, or business partners.

"Carriers have various competitive advantages that they can bring to the IDC market, when competing against specialized non-carrier companies providing similar services. These include bundling of a range of data networking service options, end-to-end service level agreements (SLAs) for applications, an established customer base for networking services, carrier-class IDC reliability, and financial soundness," says Henry Goldberg, senior analyst with In-Stat's Voice and Data Communications Group. Carriers that effectively exploit all these strengths should be well positioned to win market share from the non-carrier competition.

The research also found that carriers may offer collocation, managed hosting (dedicated or shared), applications services, storage services, and content delivery services in the IDC. Worldwide carrier IDC revenues are also estimated to grow at a 56 percent CAGR from 2001 to 2005.

It's clear that voice portals are becoming strong contenders in the enterprise and service provider space. Reinvention and change will position them as solid business tools and elevate their status beyond guides to consumer information and commerce. Internet data centers also hold a great deal of promise, and could very well serve as a launching pad for the next generation of hosted communications services.

Marc Robins is Vice President of Publications, Associate Group Publisher, and Group Editorial Director for Technology Marketing Corporation. His Change Agent column appears in each issue of Communications ASP magazine. Marc appreciates your feedback, and may be reached via e-mail at mrobins@tmcnet.com.

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