Demand will continue to pressure prices upward over the next three years, but price growth will be tempered by falling wage costs, software publishing costs and advertising costs.
Los Angeles, CA (PRWEB) May 13, 2014
Hosted private branch exchange (PBX) services have a buyer power score of 4.1 out of 5, indicating that buyers have greater negotiating power than suppliers. Buyers benefit from low market share concentration and low supply chain risk; however, buyer power is also weakened by rising demand for hosted PBX services. The hosted PBX services market is in the growth stage of its life cycle and new suppliers are flooding the market in response to growing demand. “The intense competition has made it difficult for any one supplier to command a significant portion of the market,” says IBISWorld procurement analyst Andrew Krabeepetcharat. “As such, buyers are able to leverage supplier competition to gain a lower price.” Suppliers can be broken down into telecommunication solution providers and hosted PBX specialists. Telecommunication solution providers, such as 8x8 Inc., offer hosted PBX services as a part of a complete telecommunications system for buyers. Hosted PBX specialists, such as Vocalocity, are suppliers that primarily provide hosted PBX services.
Furthermore, low supply chain risks have given way to low price volatility, allowing buyers to lessen their commitment to one supplier by choosing a short-term contract. Nonetheless, buyer power is weakened by rising demand for hosted PBX services. “Broadband connections and mobile internet connections have been growing aggressively in the past three years, giving more businesses access to hosted PBX services,” adds Krabeepetcharat. “As a result, demand for the services has risen.” This factor weakens buyer power because it pressures prices upward.
Buyers can improve their negotiation position by opting for long-term contracts. Suppliers are more likely to provide discounts if they can stabilize their revenue or gain more profit from an account. Buyers who commit to a contract length of one year or longer can receive a significant discount. In addition, buyers who require other services such as faxing, vanity numbers and audio or video conferencing can gain discounts by sourcing them from one hosted PBX service supplier. For more information, visit IBISWorld’s Hosted PBX Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of hosted private branch exchange (PBX) services. Hosted PBX services are also known as virtual or cloud PBX services. A hosted PBX services provider operates and maintains an entire office telecommunications system remotely using voice over internet protocol (VoIP) technology, which allows users to make calls over the internet. Services involve call management, but can also include functions such as call recording and an auto attendant. Buyers are small to medium firms or have mobile employees (e.g. real estate firms and consulting firms). Suppliers are telecommunication solution providers and hosted PBX specialists. The report does not include on-premise PBX, open-source PBX, video or audio conferencing and other cloud-based services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.