Frost: Asia-Pacific Hosted UC Market to Grow
December 24, 2008
Asia-Pacific enterprises are not immune to the twin trends of needing unified communications (UC) tools to enable their firms to become more efficient and grow, while reducing costs in the face of the worldwide downturn.
In response, more companies are now turning to UC hosted solutions according to new research from Frost and Sullivan, which is also good news for solutions providers and savvy systems integrators.
A new analysis, “Asia Pacific Unified Communications (UC) Services Market”, finds that the market, which covers 14 countries, earned revenues of $2.59 billion in 2007 and is forecasted to grow by 13.4 percent (year-on-year) in 2008 to close the year at revenues of $2.94 billion. The market will expand by a further 14.2 percent next year, reaching $3.36 billion by the end of 2009.
The demand trend is expected to continue into a hope-for global economic recovery in 2010 and beyond. Frost estimates that the market will reach $6.58 billion by the close of 2014.
“In the next 24 months, businesses will look to spend-to-save and focus heavily on technologies that can help reduce costs and optimize resources,” explains Senior Industry Analyst, Yen Yen Har. “While CIOs understand the potential benefits of newer and emerging technologies such as UC in meeting these priorities, the high upfront cost of full-scale deployment is a big limiting factor. The hosted model allows enterprises to trial and experience the real value of UC without the significant capital investments."
Hosted UC services, which include telephony, e-mail and conferencing services, are the most commonly contracted functions. They collectively account for approximately 53 percent of revenues in 2007 and 2008, as well as in 2009.
Professional services, encompassing consulting, implementation and integration is the second largest segment, with 22.2 percent or $575 million of the total UC services revenues in 2007. This is expected to grow to 25.5 percent or $1.68 billion by end-2014.
Har explains that UC typically involves the integration of various elements from a variety of best-of-breed solutions providers, as well as with other business applications and existing business processes. Driving this is the need to project-manage such complex implementation, which demands a comprehensive understanding of networks and voice-data integration skills.
Managed UC services - by far the smallest segment in UC services currently with about 8.3 percent or $215.1 million of revenues last year - are expected to see rising uptake. That is because more businesses will find outsourcing such functions more viable and with this eliminate the need for costly in-house technical expertise.
At the same time, maintenance services, which accounted for 16.6 percent or $430.3 million of the total UC services revenues in 2007, are expected to decline as they will be increasingly viewed as a standard service in any given hosted or managed services contract. To compete more effectively, system integrators and service providers bundle maintenance while focusing on delivering higher margin services such as consulting, integration and implementation.
Har says that the greatest challenge towards wider adoption of UC technologies among businesses is the difficulty in quantifying real productivity gains and demonstrating tangible ROI as well as the complexity in implementation.
The deployment process involves long-term strategic planning requiring business process re-engineering, and in some cases, a complete change management program. It involves changes to existing structures and the way people work; which is why very few enterprises are committed to changing the already established work cultures and embark on UC deployments. IT services professionals, such as systems integrators, will need to invest in training and certifying project teams to support them.
"Given that UC is a fairly recent concept also means that there is a lack of skilled resources to tackle complex voice and data integration projects,” Har suggests. "There is also a need to understand how UC will fit into an organization's existing business processes and support a much wider company strategy. Partnerships with leading vendors and complementary solutions providers to offer end-to-end services will also help strengthen UC offerings in order to influence corporations to adopt a truly integrated environment.”
Brendan B. Read is virtual-pbx�s Senior Contributing Editor. To read more of Brendan�s articles, please visit his columnist page.
Edited by Michelle Robart