T3i Group Credits Effective Competition, SaaS Hype, Economic Concerns For Expanding Hosted IPT Adoption

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According to a new T3i Group report, the market for Hosted IP telephony has increased by more than one-third and will continue to grow throughout the next two years. The new findings indicate customers are more aware of their telephony options than they were a year ago, and that the selling cycle is shortening.

A recently released T3i Group report on the U.S. Hosted Internet Protocol telephony (IPT) market found demand is increasing for off-premises voice and connectivity service solutions. With Voice over IP (VoIP) system growth, such innovative new solutions as Hosted IPT and IP trunking that enable users to obtain IPT functionality without significant upfront capital investments are gaining acceptance.

Software as a Service (SaaS), in which businesses can subscribe to, rather than purchase, such applications as Salesforce.com have enabled small and medium business (SMB) managers to obtain new capabilities previously available only to large enterprises and to increase interoperability among business functions. The recent proliferation of SaaS solutions and advertising has contributed to reducing IT managers' concerns about relinquishing their tangible telephony systems in favor of IPT subscription services. SMBs and enterprises with branch locations are adopting these services at an accelerated pace. Service providers also are adapting to the market: mergers, acquisitions, communications retailers and new sales channels are increasing service provider visibility and further accelerating Hosted IPT adoption.

According to T3i Group's "InfoTrack for Enterprise Communications (IEC)" report, "Overview of the US Hosted IP Telephony Market," the market has increased by more than one-third and will continue to grow throughout the next two years. The new findings indicate customers are more aware of their telephony options than they were a year ago, and that the selling cycle is shortening. T3i Group interviewed almost 50 service providers, platform vendors and wholesale service providers for this report, which follows the first report on the Hosted IPT market issued in 2007.

The research also showed that the Hosted IPT market, which grew from the initial technological and branch office appeal of carrier-grade Centrex solutions, is changing in many ways. Customers are gaining access to advanced functionality, mobility and such features as Unified Communications, and video and Web conferencing as well as integrated Customer Relationship Management (CRM) applications that can be coupled with Hosted IPT features. These improvements coincide with new companies targeting the SMB market, including cable operators and such large PBX manufacturers as Cisco, which traditionally addressed the enterprise market. In addition, T3i Group found small service and platform providers are consolidating, and Tier 1 carriers are reorganizing, to retain current customers and to target new business customers cost-effectively.

Smaller Hosted IPT service providers have learned to articulate the benefits of moving to a Hosted IP solution in a more compelling way. "Decision-makers select Hosted IPT for a multitude of reasons," said Russell Horowitz, Market Research Specialist at T3i Group and co-author of the report. He continued, "The allure of such advanced features as telephony integration within integral business processes for competitive advantage, voice telephony cost savings and investment deferral are benefits of the innovations that this sector of the telecommunications community is introducing."

About the InfoTrack for Enterprise Communications Program

InfoTrack for Enterprise Communications (IEC) is a continuous market intelligence program that tracks business communication systems revenues, shipments and market share globally. IEC databases and models are used to track, analyze and forecast line and system shipments, installed base, market share, revenues by size and technology, pricing and industry trends. For more information about the IEC program, please visit http://www.t3igroup.com/marketresearch/enterprisecomm/IEC/ or contact Dennis Kelly (dkelly(at)t3igroup.com, 973/602-0180) or Bonnie Fairbrother (bfairbrother(at)t3igroup.com, 973/602-0181).

About T3i Group LLC

T3i Group LLC provides market research, data, analysis, and consulting and advisory services to the telecommunications industry. It has clients in 46 countries and conducts its business through four operating units: InfoTech, which publishes reports that analyze shipment, revenue, market share and other pertinent data of importance to telecommunications equipment manufacturers; TelecomTactics, which maintains a database of the features and functionality of major telephony systems; Tarifica, which maintains a database of pricing-related information covering 400 telecommunications carriers operating in 130 countries; and TelecomWeb (http://www.telecomweb.com), which is a content provider with an editorial staff who author and post telecommunications-industry news stories every business day. The site also serves as T3i Group's primary delivery mechanism for distributing its reports, analyses and data to subscribers.

T3i Group LLC is headquartered in Parsippany, N.J., with additional offices in New York City; London, England; and Cherry Hill, N.J.

Press Contact: Debra Baker, 301/905-7703, dbaker(at)t3igroup.com


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