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Telephony Market to Crimp Unified Communications Market Growth

December 19, 2008

The Unified Communications (UC) space is of intense interest in a high-tech enterprise market that, for the most part, has enjoyed an optimistic outlook.  

However, according to a new study released by Wainhouse Research, UC product revenues are expected to decrease by over $1 billion over the next two years before the market rebounds.
The same study says a drop in telephony revenues, currently the largest portion of the UC market, will not be matched by growth in other areas such as IM, presence and videoconferencing.
"The unified communications market is moving slowly while many end users are still trying to understand the ROI,” said Brent Kelly, senior analyst at Wainhouse Research.  
Enterprise vendors including Avaya, Cisco, IBM Lotus, Microsoft, and Nortel, should expect total UC product revenues to decline until 2011 due to the falling average selling price of telephony, audio bridges and unified messaging, according to the study.
 In addition, enterprise video, coming on particularly strong with a compound growth rate of over 20 percent, will more than make up for telephony decreases by 2012 and beyond.
“Traditional telephony vendors will see competition from Microsoft's OCS initiatives while still partnering with Microsoft and IBM in many cases and competing with Cisco. However, those UC vendors with compelling video offerings are going to see significant growth," said Kelly.
The news gets better with time, according to the study, with IM/presence servers and team workspaces expected to fuel a growing market, ultimately offsetting early declines and give the entire UC products market a significant total revenue increase near the end of the forecast for 2001.

”When all the UC components and dynamics are included, the market is forecast to grow from $15.4 billion in 2007 though a low point in 2011 to $16.3 billion in 2013.

Tim Gray is a Web Editor for unified communications, covering news in the IP communications, call center and customer relationship management industries. To read more of Tim�s articles, please visit his columnist page.

Edited by Tim Gray

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