Hosted advanced IP services on the rise

Opinion
Feb 24, 20032 mins

* Analyst predict boom for hosted IP services

Business users around the world are expected to jump on the hosted voice-over-IP service bandwagon because of cost savings and enhanced features.

According to a report from Allied Business Intelligence users around the world are expected to spend $36.5 billion on hosted IP PBX, videoconferencing, contact center and unified communications services in 2008. Users in the U.S. are expected to account for the largest portion of that spend by buying $11 billion worth of services in that year.

While the drivers for each service differ slightly, most users are looking at spending less on equipment while improving the features they currently have deployed today, says Julia Mermelstein, senior analyst at consulting firm Allied.

Hosted IP PBX services allow small and midsized businesses to access calling features that larger companies typically support with an in-house PBX. IP videoconferencing actually works better in an IP environment, which is better at supporting multicasting than circuit switched networks, Mermelstein says.

Any business that has call centers should consider hosted contact center services that allow customer service agents to better interact with their customers via the Internet, e-mail and of course traditional voice. Unified communications services allow users to bring together all of their modes of communications – e-mail, wireless voicemail, traditional voicemail and messaging – onto one easy to access platform.

While revenue stemming from these offerings today is small, that will change in about 12 to 18 months. Allied’s study predicts that VoIP minutes will grow 100% to 140% between now and 2008.

“We expect to see a lot of growth as more incumbent providers begin to introduce advanced IP services,” Mermelstein says. Today there are only a few small providers offering hosted voice over IP services, but all of the large regional providers are testing offerings, she says.

Mermelstein says that large service providers such as SBC and BellSouth are expected to offer businesses a variety of hosted IP services by year-end. If they don’t introduce these types of offerings on their own, they will likely partner with IP service providers, she says.

Verizon is one incumbent that has teamed with one of the niche players, GoBeam, to resell GoBeam’s IP PBX offering. We’ll see more partnerships or more carriers simply rolling out these offerings on their own, she says.

“GoBeam, M5 Networks and TalkingNets are the largest providers in this space now, but that will likely change as incumbents sell directly to their existing business customers,” Mermelstein says.