VoIP gaining ground in European businesses

Lower costs may be drawing businesses into VoIP, but improved services are keeping them there

Voice-over-IP (VoIP) services are taking hold in businesses across Western Europe — and their spread shows no signs of slowing down this year.

The VoIP market grew in terms of both revenue and shipments during the fourth quarter of 2004.

Revenue rose 13 percent over the third quarter to hit $77m while the number of IP handsets shipped rose 14 percent, according to IDC's Western European IP Telephone Tracker.

Cisco was the market share leader for both revenue and shipments, with Avaya in second place.

Rogier Mol, senior IP telephony equipment analyst, told ZDNet UK sister site silicon.com: "We're definitely seeing IP telephony has become mainstream for enterprises in Europe especially when you look at the breadth of sectors where it is being deployed."

Healthcare and local government were the sectors with the most deployments in the fourth quarter, says IDC, with the NHS leading the way in the UK.

The reasons for switching are many, explains Mol. When first making the move to IP, "[companies] think it's all about low cost", he said. "In the beginning it is. But in the end it's about other capabilities such as integrating telephony systems with applications."

Other benefits of IP telephony include improved business efficiency through enabling unified messaging and better collaboration, according to Mol.

The market's not slowing down anytime soon, either. IDC predicts for 2005 IP telephone shipments will rise 53 percent and revenue will reach roughly $350m.