The Voice on the Network show last week was bopping in Boston, boasting more exhibitors than ever and some 5,000-plus show goers. One theme that kept bubbling to the surface was hosted IP telephony services, what some call IP Centrex.

Service providers are reporting success and many of the equipment vendors have new religion, seeing hosted services as a promising new market.

When the vendors in our IP PBX Showdown - Avaya, Cisco, Lucent, Mitel, Nortel and 3Com  - were asked if they were targeting the hosted market, they all raised their hands.

And why not. The IP PBX market is getting increasingly commodity-like - as evidenced by the similarities in the solutions the vendors brought to the Showdown in answer to a mock RFI we distributed a few weeks ago - and the players need a full portfolio of options to corner market opportunities (view the Showdown PowerPoint slides ). What's more, unlike Centrex of old, with hosted VoIP services you can do virtually everything you can with customer premises equipment.

One small service provider that is having early success is M5 , which offers a hosted VoIP service in the New York City area for customers with 10 to 500 stations. CEO Dan Hoffman says he has 300 customers, and deal sizes are up 25% this year.

The big guns that are wading in are after larger shops. Avaya, for example, is initially targeting companies with $200 million to $800 million in revenue, says Denzil Samuels, vice president and general manager of the Global Service provider division.

Samuels says Avaya has been in stealth mode for two years as it readied its product for the hosted market and has already managed to sign up service provider partners and a few customers.

Readying the hosted product involved shifting the company's IP PBX software to Linux on Intel-based blade servers, migrating hardware-based functions to software, layering over telephony-centric management, and making it all NEBS -compliant, Samuels says.

The architecture will make it possible for service providers to host customers on individual blades. But even more important is the length Avaya is ready to go to support it all. The company is willing to build out hosted facilities, finance them, manage the services and even help the carriers market them.

This type of market encouragement can only lead to the return of Centrex, albeit Centrex that looks nothing like the service of old.