VoIP enterprise growth: not so fast - Allied Business Intelligence's voice-over-IP report - Industry Trend or Event - Statistical Data Included

Communications News, July, 2001 by Sean Kelly

Voice-over-IP (VoIP) is projected to take off in the next several years--but the speed at which enterprises will be flocking to the technology appears to be an open question.

Allied Business Intelligence (ABI) projects the VoIP-equipment market will grow from $3.7 billion posted in 2000 to $12.3 billion in 2006. ABI also expects the enterprise segment to quadruple in the same time period to $4.6 billion. "In just a few years, service providers and enterprises across the globe have recognized the cost savings found in toll arbitrage and the opportunity for the future development of enhanced services that cannot be offered by the public switched telephone network," states an ABI report.

Other observers indicate, however, that VoIP growth among enterprises might take somewhat longer. "We view the migration to packet telephony as a 20-year process, in which we are now at about year three," says John Marcus, Probe Research vice president of global IP business services. "This year, we expect VoIP to account for less than 1% of total voice traffic, rising to about 14% in 2006.

"VoIP has been successful in the enterprise among price-conscious users and those deploying solutions in new locations," he says. "The only companies where we are aware of large-scale migrations to VoIP are industry players such as Cisco."

Marcus notes there is interest in enhanced services offered through VoIP, "but these are not actually driving sales yet. In addition, VoIP is often seen as a step toward convergence (of voice and data), a concept both service providers and end-users are not embracing as much as the equipment vendors might have liked."

Marcus still sees evidence of a robust future VoIP market. "The IP PBX is showing signs of success in the SME space, as well as in branch, remote and new office locations in larger enterprises. Cisco, Avaya, 3Com and Sphere Communications are among the vendors who have been shipping systems to hundreds of customers over the last 18 months, including schools, universities, government departments, as well as businesses.

[GRAPH OMITTED]

"Any enterprise considering adding or replacing voice infrastructure or services will from now on consider packet-based alternatives to traditional solutions," he concludes. "The take-up rate will increase, especially now that quality-of-service issues are being addressed and the equipment platforms are approaching some measure of maturity."