APAC enterprise telephony to cross $2.5B by 2016

Region's enterprise telephony market on growth path as customers demand for unified communication products, especially around video and Web conferencing, Frost & Sullivan reports.

Revenues for the enterprise telephony market in the Asia-Pacific region is expected to grow to US$2.57 billion in 2016, from US$1.72 billion in 2009, according to a new Frost & Sullivan in report.

The market, which saw a slump in the second quarter of 2009, is back on track as banking and financial institutions, universities, hotels and transportation providers increase their spending on enterprise telephony technologies, the analyst firm said Thursday in a statement.

Shailendra Soni, industry manager at Frost & Sullivan, said the market is poised to reverse the negative trends of the recent past with customers demanding unified communication (UC) products, especially around video and Web conferencing. The demand comes from the ability of high-end video conferencing tools to act as substitutes for face-to-face meetings which helps enterprises lower traveling budgets and improve productivity, he explained.

Small and midsize businesses have begun to show an active interest in enterprise IP (Internet Protocol) products especially in technologies that can help reduce the total cost of ownership and telecommunication bills, according to the report.

Among the challenges for telephony vendors and its channel partners is the low availability of in-house resources to manage IP telephony and UC products, Frost & Sullivan noted. As such, vendors are offering free or low-budget training as well as proactively offering products delivered over the managed and hosted environment, it added.

"Tier 2 vendors have to move from selling just 'box' solutions to offering [a] convergence solution that includes user-based UC applications," said Soni. "Investments in channel training and the development of strong marketing collaterals that clearly illustrate rapid ROI (return on investment) are critical for successfully selling IP telephony solutions."

Upturn in hosted IP voice services
In a separate report also released Thursday, Ovum predicted that revenues from managed and hosted IP voice services in the region will increase by almost three times over the next five years to reach US$3 billion in 2016.

While premise-based IP PBX (private branch exchange) will still dominate the enterprise market, Ovum said IP Centrex, which is a managed IP-based voice service hosted by the service provider, will see the biggest growth. The analyst firm attributed this to the increasing awareness of the advantages of cloud-based models.

According to the research firm's predictions, IP Centrex extensions in the region will reach 7 million by 2016, a compound annual growth rate (CAGR) of 30 percent between 2011 and 2016.

The number of extensions based on the managed IP telephony systems which includes IP Centrex, hosted IP PBX and on-premise managed IP PBX will reach 26 million by 2016, up from 8 million in 2011, Ovum added. This represents a six-year CAGR of 27 percent.

In the report, Ovum's senior analyst Claudio Castelli said: "The preference will continue to be for on-premise IP PBXs but many companies will consider relying on a service provider for hosting and system management.

"There is hope for service providers building their cloud-based communication offerings, and we expect the preference for the hosted approach to rise as more offerings are released into the marketplace and customers realize the benefits of the new cloud models, such as faster deployment times, high flexibility to upscale or downscale, outsourced management and utility pricing," he said.


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