A recent report from market research firm Dell’ (News
)Oro Group shows that the carrier IP telephony market rose 7 percent sequentially in the second quarter of 2009, to $737 million, as service providers replenished equipment and license inventories and purchased infrastructure to serve near-term customer needs.
The report finds that several smaller market players with limited exposure to large network upgrade projects, including AudioCodes, MetaSwitch and Veraz, gained in the second quarter. Meanwhile several of the larger network equipment makers, such as Huawei (News
) and Nokia Siemens, lost share. Nortel, whose enterprise division is expected to be auctioned off
later this week as part of bankruptcy proceedings, regained the top market position during the quarter.
As Greg Collins, vice president at Dell’Oro Group, pointed out in a release
, “the weak economy and lack of confidence in business conditions have severely reduced spending on network modernization projects.”
But despite this trend, “subscriber facing equipment has seen only a modest negative impact, and business voice-over-broadband licenses on both softswitches and voice application servers remain a bright spot,” he said.
“During the quarter, softswitch IP business trunk, including SIP trunk, license shipments increased 33 percent during the second quarter and business voice or IP Centrex license shipments on voice application servers grew 85 percent,” he added.
The lull in network investments, however, has had an impact on the hosted business VoIP market, in that those players which have made significant investment in their networks in recent years have had some time to rise above those service providers which have not.
Hosted business VoIP provider Nextiva
, for example, has attracted a lot of new customers in the past year as a result of the fact that its Connect360 service has proven
highly reliable and delivers excellent quality of service. That’s because Nextiva has made considerable investment in its network in recent years (not only before the recession hit, but on an ongoing basis). As a result, Nextiva, which owns and operates its own nationwide all-IP network, gets high ratings
for its business VoIP service – especially when compared to those hosted VoIP providers whose network upgrades were stalled by the recession.
The company’s entire core network is powered by Cisco (News
) 6500 Series routers. All services requiring non-blocking throughput are connected directly to the routers through Gigabit connections. Nextiva also runs BGP with its Internet peers (network operators) to ensure that its voice data always takes the best possible route to each customer.
In addition, Nextiva uses only carrier-grade Session Border Controllers for interconnecting customers and carriers. Each SBC node is actively mirrored by a hot standby, so that in the event any one node goes down, its hot standby immediately takes over all activity. The sophisticated signaling intelligence of the Session Border Controllers adapts session signaling at the network edge to facilitate ongoing protection against a myriad of threats, including flood attacks, DoS attacks and SIP signaling attacks.
What’s more, Nextiva hosts its service in highly secure and reliable data centers. Its primary datacenters are located in Phoenix, Arizona -- increasingly the location of choice for companies to locate mission-critical infrastructure, as Arizona is less prone to hurricanes, tornados, earthquakes and other natural disasters. The company also has redundant datacenter facilities in Los Angeles, California and New York City, New York. Its data center facilities sport cooled/raised flooring, redundant power, diverse network connectivity and top-of-the-line monitoring, among other key features.
Nextiva’s application servers are fully clustered nodes that focus on delivering function-specific applications. The company is a pioneer in standardizing on fully RFC-compliant SIP call control standards, thus interoperability is a non-issue. In addition all backend devices -- voicemail, call handling, conferencing and more -- “talk” to each other in the same next generation standards.
While the Dell’Oro Group study indicates that some business VoIP providers might be starting to invest in their networks again, companies considering making the switch to hosted VoIP (or to another business VoIP provider) should always consider the level of network investment that each prospective provider has made in the past couple of years, to be sure the technology is up-to-date.
Every hosted VoIP service is only as good as the network technology that delivers it, so companies that turn a blind eye on this issue and base the decision to switch on price alone run the risk of getting poor quality service. Considering that quality of service is what your customers, partners and prospects hear when they dial into your company’s phone system, and that the phone remains the primary channel of communication between businesses and their customers, it only makes sense that this should be a top consideration when choosing a business VoIP provider.