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December 2006, Volume 9/ Number 12
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IP Communications Enterprise Market Trends



During the last Internet Telephony Conference & EXPO in San Diego, I had the pleasure to emcee and speak on a number of panels that were part of the IP Communications Business Summit, with a number of well-regarded and incredibly knowledgeable individuals, including analyst Jon Arnold, principal of J. Arnold and Associates (; Ron Gruia, Principal Analyst and Program Leader Information and Communications Technology at the market research firm Frost & Sullivan (; Richard Grigonis, Executive Editor of the IP Communications Group at TMC; Andy Mercker, Director of Marketing at Sphere Communications (News - Alert) (; Ray Hernandez, Managing Partner at VC firm ROTH Capital Partners LLC (; and Ken Camp, speaker, writer and consultant who also blogs about IP communications technology at (

Over the course of the two-day event, we covered a lot of ground, delving into the leading industry trends and market drivers for the corporate enterprise, service provider, SMB, SOHO, consumer, and government market segments. We also had an interesting session on the next wave of IP communications technology, where we were able to peer a bit into our crystal balls and discuss what we saw coming down the pike.

So, for those of you who weren�t privy to the goings on at the event, I thought I�d offer up a summary of the some of the key talking points and trends we discussed during the session relating to the corporate and government enterprise marketplace. In future columns, I�ll try to focus on the other market segments.

The Corporate Enterprise Marketplace

We all agreed that the corporate enterprise marketplace was on fire, and that full-fledged adoption of IP Communications technology was in full force. Today�s enterprise customers have a wealth of options to choose from when making the move to migrate from TDM to IP-based communications, and we tried our best to cover them all.

IP PBXs and Open Source Solutions: CPE-based solutions still appear to be the dominant choice today, with a wealth of choices from an expanding array of system vendors. Most compelling was the torrid growth of the open source-based business, led by the poster child of open source, Digium and its Asterisk (News - Alert) solution. And rather than being relegated to small business deployments, open source is making serious inroads into large, campus-based environments (especially in the education market). The price/performance equation is just too good to ignore, and it was agreed that it�s only a short matter of time when the �old-line� IP PBX (News - Alert) vendors start to feel some real heat from the upstart open-source competition.

Hosted/Managed Services: Hosted IP PBX, IP Centrex and managed VoIP services all seem to be enjoying dramatic growth as well, and represent an expanding percentage of the market, especially among SMBs. Witness the growth and success of M5 Networks, a hosted IP PBX service provider in the metro NY area that just made the Deloitte Fast 50 list of the fastest growing NY-based companies; Cbeyond, the publicly traded managed services provider based in Atlanta that is methodically expanding operations in key market segments across the U.S., and Accessline Communications, based in Bellevue, Washington.

SIP Trunking: The movement to directly connect SIP-enabled IP PBXs to SIP-enabled VoIP service providers is gaining momentum as new specifications for interoperability, such as SIPconnect, gain wider acceptance. The argument for SIP trunking is quite compelling: lower costs coupled with increased functionality and security, and a much richer, SIP-infused communications experience.

WiFi (News - Alert) Telephony/Dual Mode Phones: Still lagging way behind home environments when it comes to cordless communications, the workplace still has enormous room for expansion with respect to wireless communications, and WiFi telephony and dual-mode mobile phones hold great promise. We expect 2007 to be the year when wireless VoIP and dual-mode starts to blossom.

Video Telephony: As easy-to-use and low-to-no-cost video capabilities find their way into more IP PBXs, and service providers add more video applications to their service bundles, video telephony is expected to gain serious momentum in the next few years. Technically speaking, there�s little to hold IP video back: the main challenge for the industry is to find ways to painlessly evolve user behavior and to nudge users to embrace video as an acceptable mode of business communications.

IP Contact Center Solutions: While only about 7-10% of corporations have embraced IP contact center applications so far, it is expected that the pace of adoption will pick up considerably in the coming years due to the incomparable value-proposition IP communications-empowered contact centers represents, including the savings derived from distributed resources and workforces, and productivity and efficiency improvements stemming from the control and integration of multi-channel communications.

The Government Sector

With respect to the government enterprise marketplace for IP communications technology, it was agreed that the overall adoption rate lags behind that of the private sector, and it appears that government agencies are at least a couple years behind in their embrace of VoIP. Government tends to tread very slowly and carefully when it comes to the adoption of new technology, and their experience with VoIP and IP communications is no different.

The requirements for government are also much more demanding, and compliance with mandated security measures (which can limit or prohibit the use of certain features and capabilities), interoperability and/or duplication of TDM-based priority services, such as GETS (the Government Emergency Telecom Service that allow officials to access network services during times of severe network congestion and over-subscription), and access to emergency e911 (News - Alert) services (mandated by law), serve to make the development and the selling of IP communications technology to certain government entities a much more specialized practice. IT

Marc Robins is Chief Evangelism Officer of Robins Consulting Group, which offers an array of services to the IP telephony industry. He has been involved in the telecommunications industry as a reporter and analyst, trade show producer and publisher, and marketing executive and consultant for more than 24 years. For more information, call RCG at 718-548-7245 or e-mail [email protected].

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