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May 17, 2007

IP Telephony Market Expected to Produce Significant Growth by 2011

By Susan J. Campbell, TMCnet Contributing Editor

As VoIP continues to improve in quality and security becomes less of a threat when partnered with robust applications, the technology is gaining traction. Enterprises are realizing that the benefits of IP telephony exceed basic cost reduction.

Companies have also come to appreciate the fact that merging voice and data into a single network provides an enhanced communication experience. As a result, these organizations are increasingly interested in the convergence that IP communication grants and the integration of multiple applications in a single interface or device.
According to new analysis from Frost & Sullivan, North American Enterprise IP Telephony End-Point Markets, 2006 showed market earned revenues of $1.02 billion. This market is estimated to reach $2.79 billion in 2011.
"In order to benefit from the advanced applications delivered by next- generation telephony platforms, enterprises are choosing to upgrade their legacy end points with high-tech IP ones," notes Frost & Sullivan Research Analyst Laura Devoto, in a Thursday statement.
In response to the growing demand, end-point vendors have been focused on granting a better integration of multiple applications to add value to the business processes through the development of technology that provides enterprise customers with productivity-enhancing applications and easy-to-use-and-deploy devices.

Developers of desk phones have invested time and resources in mastering devices for the multiple roles within companies. End points that support extensible markup language (XML) and telephony application programming interface (TAPI) applications are also gaining traction as these enable independent developers and companies to develop customized applications.

Current market leaders are now facing the consolidation of the Session Initiation Protocol (News - Alert) (SIP), an industry standard for multimedia applications. For now, the standard only supports the basic telephony features. As a result, most vendors have extended the protocol to create “proprietary versions of SIP” or have chosen to support basic SIP and their own proprietary protocols in their platforms in order to grant all the features that the platform supports.

The majority of enterprises that have deployed a telephony system, elected to deploy the same vendors’ end points. As the standard matures, it will be able to support more of these advanced telephony features that proprietary protocols support and SIP end points will become more functional in third-party platforms.

"As the SIP standard consolidates, IP telephony end-point vendors will face a stronger competition by affordable SIP-based solutions" explains Laura Devoto, in Thursday’s statement. "These devices are likely to grant more of the advanced features supported by proprietary protocols nowadays."

"Companies can differentiate from its competitors by focusing on developing high-tech advanced-featured devices," explains Devoto. "Providing an enhanced communication experience along with different value proposition by using either proprietary protocols or adapted versions of SIP can prove to be the key differentiator in this market."
The progress of the market presents considerable opportunities for vendors to take advantage of the technology growth, as well as the consolidation of standards, to produce products and components that enhance the features of the platforms.
Converged communications are becoming increasingly important in the enterprise. As such, those operating in this space must be proactive by anticipating trends and demands and offering products and services that address the challenges that organizations face in trying to achieve seamless integration of both data and voice. By doing so, a win-win situation is created, helping to drive growth for both vendors and targeted organizations.

To learn even more about IP telephony, check out out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP communications industry. The library offers white papers, case studies and other documents free to registered users.

Susan J. Campbell is a contributing editor for TMC (News - Alert) and has also written for To see more of her articles, please visit Susan J. Campbell’s columnist page.


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