Unified Communications Market in New Zealand to Grow at CAGR of 6.2 Percent from 2012- 2019

A recent research from Frost & Sullivan (News - Alert) predicts that the overall Unified Communications (UC) market in New Zealand is expected to grow at a CAGR of 6.2 percent from 2012 to 2019.

The on-premise UC market in New Zealand was worth $97.7 million in 2012, a decline of 4.5 percent from the previous year. This is mainly because organizations are reducing IT spending and deferring UC investments amid weakening economic conditions.

The New Zealand UC market has become a two-tiered market with the top two vendors accounting for over 40 percent of the overall market and a number of vendors competing for the remaining share, the report said. Cisco and Microsoft (News - Alert) are the biggest competitors mainly due to the breadth of UC solutions offered.

Microsoft Lync has emerged as a disruptive factor in the New Zealand UC market with its ability to deliver core functionality such as IM, presence, voice and video on a single platform.

Cisco and Polycom (News - Alert) dominate the New Zealand video conferencing market, collectively accounting for over 95 percent of market share, said Anand Balasubramanian, industry analyst, ICT Practice, Frost & Sullivan ANZ. Through their products and strong channel partnerships, Cisco (News - Alert) and Polycom have built very high barriers to entry, the report said.

The main revenue generating sectors in the UC market in New Zealand are government, banking, financial services and insurance (BFSI), the report said. However, both these sectors were cautious in deploying UC over the past year with a marked decline in large deals.

Another reason for the decline in UC revenue was the performance of two major application segments – enterprise telephony and conferencing & collaboration. These two segments, which accounted for over 50 percent of revenues, were impacted by market conditions and expected a decline in revenue. Of this, enterprise telephony was particularly hit, declining by 15.6 percent from 2011.

Cost and efficiency pressures are driving the demand for hosted and cloud based solutions, the report said. Cloud delivers greater flexibility while minimizing maintenance overheads. Organizations are beginning to closely evaluate hosted and cloud based alternatives at the time of their UC infrastructure refresh.

Vendors such as Interactive Intelligence and Mitel (News - Alert) have geared up to address the growing demand for flexible and feature rich UC solutions at affordable price points. They experience high growth rates. Demand for hosted and cloud solutions is also beginning to gain momentum as organizations prefer more flexible solutions that offer usage based pricing.