Study: Enterprise VoIP hits its stride

Enterprise adoption of IP telephony is on the upswing, as the U.S. market for voice-over-IP handsets hit the $1 billion mark in 2001, according to a recent report.

According to Cahners In-Stat, the market for IP voice gear will reach $5 billion by 2006, as IP phone systems start replacing aging circuit-switched PBX systems over the next several years.

Cahners In-Stat reported that 2001 sales of IP phones tripled from the previous year. In addition, the average number of IP handsets installed per new system (or new IP PBX installation) was around 68 in 2001, double the amount from the year before. The growth in the size of IP voice rollouts signals that enterprises are shifting the technology from the testing stage to live deployments, especially in branch offices and in new buildings where new phone systems are needed.

Those on the front line of enterprise VoIP projects concur. IP telephony is on the to-do short list at many large enterprise IT shops, even as businesses have shied away from new IT undertakings, according to Rick Hughes, partner leader for IT solutions at consulting firm PricewaterhouseCoopers.

"Over the last two or three months, we've seen client activity [in voice over IP] move from lab settings to more full-blown implementations," says Hughes, whose clients include Fortune 200 companies. This shift could be a sign that the "proof-of-concept" stage for enterprise telephony gear is nearing the end, he adds.

Of the major IP telephony vendors, Cisco fared the best in 2001, growing its IP handset revenue by 140%, eclipsing the entire market in 2000. Competition came on strong from enterprise network rivals Avaya and Nortel, however, which combined to take 40% of the market of IP handset offerings for both their respective server-based IP voice systems, as well as IP extension products for their respective PBX products.