Frost & Sullivan's End User Survey Reveals IP Migration is Imminent for Financial Services Industry

Business Wire,  August 30, 2004  

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PALO ALTO, Calif. -- Frost & Sullivan, a global growth consulting company, analyzes the drastic move for many financial services companies to IP telephony in its latest research service, Enterprise Communications End User Survey for the Financial Services Industry.

The key challenge for financial services businesses is to prioritize technology purchases as the economy turns around. This survey enables enterprise communications vendors to better understand "must-have" versus "nice-to-have features" in upcoming versions of their solutions, as well as major end user concerns regarding new technologies such as messaging and conferencing.

Using WebSurveyor technology, Frost & Sullivan conducted an Internet survey of targeting small, medium and large financial services, banking and insurance companies. We obtained 176 responses from an e-Rewards B2B panel. Each respondent was involved in evaluating, specifying, recommending, or approving the purchase of Enterprise Communications solutions such as PBX equipment and telco services.

This new analysis reveals that 43.8% of the surveyed companies are evaluating to use an IP telephony solution within the next 12 months. The much-awaited IP migration will become a reality, at least in the financial industry. "The timing is right since Frost & Sullivan forecasts predict that businesses will replace the equipment they purchased during the Y2K era in 2005 and 2006," says Frost & Sullivan Vice President of Communications Applications Alpa Shah.

As expected, cost savings is the number one reason for investing in IP telephony.

"Even as the economy begins to grow again, businesses remain concerned about their survival, and feel the pain of financial crises," says Shah.

Improving internal communications and productivity are also reasons for investing in IP telephony solutions. These improvements can positively impact the bottom line. Financial businesses, who have faced even more competition in tough economic times with the entrance of many Internet-based competitors, are seeing that the need to become more efficient in the workplace is critical.

"This means doing more with less people on staff. This in return means investing in technology," says Shah.

Frost & Sullivan believes it is important for market participants to gain a firm grasp on customer concerns. What is top on financial companies' minds when making a decision to purchase communications technologies? The study evaluated factors such as:

--Performance of solution

--Quality

--Reliability

--Scalability

--Security

--Bandwidth Consumption

--Ease of Use

--Productivity

--And of course Cost -- Initial price and Cost of Ownership

The study also gauged the customers' perceptions of competitors in this market on the following critical competitive factors:

--Customer Service

--Return on Investment

--Innovation

--Customized Industry-Focused Solutions

--Customized Business Size Solutions

--Secure Solutions

--Scalable Solutions

--Openness and Integration

--Product Training

Respondents were provided with the following list of companies to select from: 3Com, Alcatel, Altigen, AT&T, Avaya, Bell South, Cisco, Ericsson, Interactive Intelligence, InterTel, MCI, Mitel, NEC, Nortel, Panasonic, Qwest, SBC, Shoreline, Siemens, Sphere, Sprint, Verizon and Vertical. A category of "Other" with the option to specify the name was also provided.

The study indicates that certain companies are perceived to excel in almost all of the categories. This represents a distinct competitive advantage for those companies particularly because of the forecast investment by these customers in enterprise communications technologies in the next 24 months. The companies that received the most votes in each category were recognized with Frost & Sullivan Awards.

The financial services industry is the first vertical explored by Frost & Sullivan for its Enterprise Communications End User Survey series. Upcoming analyses will include the healthcare, hospitality and education industries. For more information, please contact Dustin McVey at dmcvey@frost.com with the following information:

--End User Survey

--Name

--Title

--Company

--Phone #

--e-mail address

Frost & Sullivan, a global growth consulting company, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes custom strategic consulting, market intelligence and management training. Our mission is to forge partnerships with our clients' management teams, to deliver market insights, and to create value and drive growth through innovative approaches. Frost & Sullivan's network of consultants, industry experts, corporate trainers and support staff, spans the globe with offices in every major country.

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