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Assessing the (Real) Market for Unified Communications

Frost & Sullivan has released its 2010 World Unified Communications Market study. (Clients can downloaded it here.) In 2009, vendors shipped about 16 million UC and UC-capable clients. By 2015, we expect vendors to ship between 25 and 30 million UC clients. We estimate that in 2009, the installed base of fully integrated UC solutions was about 2.1 million users, and we expect it to grow to about 50 million users by 2015.If those numbers seem small to you, consider that just because a company has deployed a "UC-capable" client, that doesn't mean it's enabled it to support a complete set of integrated UC features, including voice, unified messaging, presence, chat, and audio, web and video conferencing. Many companies have deployed Microsoft's Office Communications Server or IBM Sametime just for the IM capabilities; they may not even use the included (and free) web conferencing, let alone integrate it with voice and other communications capabilities.

The fact is, as much as we analysts would like every IT manager at every company or organization to jump on the UC bandwagon and deploy a fully integrated set of communications tools to all their end ain't gonna happen, at least not any time soon. And by soon, I mean 5-10 years, not 5-10 months. I and my colleague, Elka Popova (who did all the heavy lifting on this study-including the number crunching) talked to all the leading UC vendors, as well as many, many ancillary players (from gateway vendors and videoconferencing manufacturers to service providers and VARs), and the universal message was, "Uptake on UC is very slow, indeed."

IT managers and the companies they work for are very interested in the concept, and they are seriously considering, or even rolling out, pieces of UC: VoIP and unified messaging, for instance, or integrated audio/web/video conferencing services. But it's important to keep in mind that the majority of organizations have yet to give their end users an enterprise-grade IM tool, or deploy VoIP to every office location, or every employee. And today, most conferencing is still purchased as a hosted service by a line-of-business manager.

Don't get me wrong. I'm bullish on UC as a general trend in communications. But we need to ramp back our forecasts on just how quickly companies will jump on the UC bandwagon. Think about how many truly game-changing communications technologies have entered the workplace in the past 100 years. The PC replaced the typewriter; email has made faxes less relevant; voicemail has mostly eliminated receptionists. But the simple telephone is still with us, rumors of its demise seriously exaggerated.

Furthermore, when you look at ramp-up, very few communications tools changed the workplace overnight; most took years to reach mature market penetration. Email turned communications on its head very quickly; IM, meanwhile, has yet to break the 50% mark, more than a decade in.

The question is, will unified communications be the next email-or the next IM? I think you know where I stand. What about you?