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ABI Research: Unified Communications Market to Reach Nearly $4.2 Billion in 2014


November 24, 2009

A new report from ABI Research, “Vertical Market Opportunities in Unified Communications,” predicts that the unified communications solutions market will reach nearly $4.2 billion in 2014 – a sharp increase from 2008 when the market reached around $302 million.


Unified communications -- an emerging and still somewhat undefined market -- involves the integration of different communications channels, such as phone, email, instant messaging and conferencing, on a single IP-based platform for the purpose of speeding communications and improving collaboration among employees. Used for both fixed line and mobile communications, UC delivers advanced features and functionality, including “presence,” which is the ability to see the availability status of other users on the network.

One of UC’s main advantages is that a message sent on one type of channel and can be received on another. For example, a voicemail can be automatically converted to text and sent to the intended party by email – thus the recipient gets the message immediately without having to dial into a voicemail system to retrieve the message at a later time. Real time alerts and messaging are key elements of a UC system, as this is what facilitates a sense of “immediacy” and leads to reduced latency for all communications. In general, UC also facilitates greater user control, through a single Web-based point of administration, over all communications -- for example, many systems allow individual users to define when, where and how they can be reached -- and users can define these parameters on-the-fly, without any need for IT support.

As the ABI Research report points out, UC allows organizations to make use of only those communications channels they really need – for example, a company might initially want to only integrate phone, email and IM – and hold-off on conferencing and other integrations until later.
 
“Companies have been buying only those component technologies that they think will deliver immediate value,” ABI Research practice director Stan Schatt said in a release. “It’s only later that they start tying it all together as true unified communications.”

The report finds that once companies start integrating applications, “synergies multiply: for example, many companies have messaging by voice and email, but when they are integrated, a user can ‘see’ voicemails and have emails read aloud. Such synergies can deliver increased productivity and efficiency, and greater customer satisfaction.”
 
While most unified communications solutions vendors claim that UC offers a fast return on investment, this has been difficult to measure and quantify. A recent report from market research firm Aberdeen Group, however, concludes that UC does deliver measurable business value. The report, "Unified Communications: Gaining a Competitive Advantage While on the Move," claims that 79 percent of companies surveyed achieved a break-even return on their UC investment within the first 12 months. The savings was realized by streamlining internal and external communications, maximizing telecom spend, increasing productivity through improved collaboration, and reducing customer churn through increased customer responsiveness.

The research study, which surveyed over 150 organizations, also found that the broad acceptance of mobility in the enterprise has made it the most reliable way to contact an individual, and the need to integrate mobility into the larger organization's communications infrastructure emerged as one of the primary drivers for increased UC adoption.

Companies participating in the Aberdeen study reported that UC had increased knowledge sharing among the workforce by 35 percent, increased workplace flexibility by 35 percent, improved their organization's competitive performance by 25 percent, increased collaboration for decision making by 16 percent, and accelerated speed of conflict resolution by 11 percent, on average.
 
The ABI Research report finds that big corporations with multiple locations benefit the most from unified communications, “but many vendors’ systems are not interoperable. There are still gaps where no standards exist. Even the largest vendors such as Cisco don’t make everything, so there’s a premium on partnerships.”
 
Most UC systems take a hardware-centric approach, in order to facilitate the integration of legacy systems (such as email) – and as the ABI report points out, this “opens a tremendous opportunity in replacing older equipment.” Still, many companies are looking at software-based “all-in-one” systems, and are considering completely replacing their legacy systems in order to gain all the benefits UC delivers only without the headache of undertaking complex integration projects.

For this reason, many organizations are also looking at hosted or “cloud”-based UC services: This way, they don’t have to deal with integration issues and system complexity, which can badly bog-down a company’s IT department – instead they simply outsource all the hardware and network infrastructure and let a third party deal with application performance.
 
“We foresee a booming market for managed services, simply because unified communications is tricky and many companies won’t want to spend the time and effort to do it themselves,” Schatt said. “That applies to the market as a whole, but particularly to smaller businesses.”

ABI Research’s “Vertical Market Opportunities in Unified Communications” report analyzes the total enterprise communications market as well as that portion that can be truly classified as unified communications. The report offers a global in perspective and tracks the key vendors, examining their key strategies, market differentiation, and relative success in vertical markets.

Patrick Barnard is a senior Web editor for unified communications, covering call and contact center technologies. He also compiles and regularly contributes to unified communications e-Newsletters in the areas of robotics, IT, M2M, OCS and customer interaction solutions. To read more of Patrick's articles, please visit his columnist page.

Edited by Patrick Barnard




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