My colleague Elka Popova has just released her latest study on the Hosted UC market, and the numbers should be sobering for anyone looking to the SaaS market for salvation.The North American hosted unified communications market totaled about 19,000 seats at the end of 2008, and is likely to grow to about 2.6 million users by 2014--about five percent of the overall UC market, in terms of seats. In 2008, only a handful of service providers, most of them very small, had deployed or were in the process of implementing a complete hosted UC application package. These include CallTower, Cypress Communications, Engage Incorporated and Verizon. Although many other service providers, including the larger incumbents, have stated their intentions to enhance their hosted offerings with full-fledged UC applications, we are still waiting for them to deliver commercial offerings-and, in many cases, a clear vision of how they plan to position those solutions.
So what does this mean? Well, for starters, even if IT managers want to get their UC via a hosted model, for the most part, they can't. That will obviously have a significant impact on the market for the foreseeable future (because, really, if there's demand but no delivery, there's not much of a market). And even as offerings do become available, concerns about integration with existing PBX/IP-PBX systems promise to stymie many an SP's efforts in this arena, and keep the market relatively small for the foreseeable future.
Meanwhile, a number of service providers, such as USA.NET, Intermedia and Verizon, are offering hosted OCS and integrating with both hosted and premise-based telephony solutions. While this scenario requires a more customized approach, it will offer some new growth opportunities for hosted UC services. We believe that hybrid implementations will be rare in the near future, but will gain traction.
In the near term, hosted UC deployments are likely to remain highly correlated with hosted telephony engagements. We do expect a growing number of service providers to choose to host only the UC client, conferencing and presence, and integrate with either hosted telephony services delivered by other service providers or with premise-based telephony systems as interoperability improves. There could be other scenarios, too, in which, say, the telephony is hosted and the UC platform is premise-based. These are less likely--if you're getting your voice on a hosted basis, why not everything else?--but SPs must prepare for a wide range of customer requests.
For more details on the forecast itself, as well as market trends, drivers and restraints, Frost & Sullivan clients can see the full report at www.frost.com. Everyone else can learn more about the research in this study-as well as SaaS in general, especially during a down economy-by joining us for a Frost & Sullivan analyst briefing on Tuesday May 5th at 3pm, ET. Register here.
