The Rise of Hosted IP Telephony and Cloud UCC

Significant growth is going to continue for North American hosted Internet Protocol telephony, as well as unified communications and collaboration services.

This is a trend that is continuing to rise, yet, there are a number of factors that may stall the growth and understanding all these factors will help you see the potential for the technology.

The main reason that this growth is expected is due to the fact that an increasing number of service providers are looking for varying forms of efficient and flexible solutions for their businesses. It is also estimated that the market demand and customer confidence will go up if emphasis is placed on advancements regarding factors such as the overall quality, security and reliability of hosted UCC solutions and IP telephony.

According to Frost & Sullivan,  UCC services and IP telephony markets will reach increased revenues by the year 2020 of around $9.53 billion, which is up significantly from 2013 revenues of $1.59 billion. While these growth rates are expected to decline gradually year-over-year, because of the larger installed base, the total number of new users is going to increase consistently through the forecast period.

Some of the primary trends that are encouraging this shift to the next-generation solutions of UCC and IP telephony include:

  • A increasing demand for the personalization of services and applications
  • The move that is being made to cloud architectures in order to achieve more cost-effective access to collaboration and communication capabilities
  • VoIP technology maturity
  • The mobile workforce expansion

According to Frost & Sullivan the need for the IT operation optimization and the communications infrastructure consolidation will lead to an adoption by bigger organizations of a number of new mobile and remote employees. The fact is that not only do remote workers make sense in terms of finding the best talent for businesses, it is also a much more affordable option for employers. This will cause hosted communication solutions to gain traction, for large and smaller organizations, because of the enhanced security and customization that they offer.

However, it is important to note that this migration is going to be gradual, as well. This is mainly due to the larger installed base of North American premises-based solutions, in addition to their customer concerns regarding cloud security. There are a number of situations where the total ownership cost of hosted solutions may be more expensive than the premise-based alternatives that can discourage possible customers from moving to a third party solutions. Nonetheless, this is a trend that is continuing to change each year.

Limited provider differentiation and competitor fragmentation that confuses decision makers in businesses can cause another delay in regard to the uptake of the technology. There are a number of businesses that are still evaluating all of the options that they have, while simultaneously waiting for the economic conditions to stabilize and to allow emerging technologies and the various business models, that are being used, to mature. One method to increase the adoption of the services is for service providers to educate business decision makers on the advantages offered by hosted IP telephony, as well as UCC.

A hosted communication provider has to be able to deliver additional value to their customer base with enhanced functionality, as well as compelling service bundles and competitive pricing. Providing integration and mobility with third party applications is another reason businesses will start to hop onto these next-level technologies.

Their isn’t any question that IP Telephony and Cloud UCC is on the mind of many C-level executives and business owners, if they haven’t already been implemented. The rapid adoption will start to trickle down to SMBs as more offerings, with varying functionalities, become available too.

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