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Hosted Market growth bounces back from poor end to 2012 August 1, 2013

Posted by Matthew Townend in Uncategorized.
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Following illume research’s recent survey; we have seen the hosted VoIP market add 90,842 seats (8.55% growth) since December 2012 compared with 66,839 seats in the last two quarters of 2012.

With the market experiencing a slowdown when we last did the survey, it is showing encouraging signs of growth with all providers in the market demonstrating growth again, even those who had stagnated in the last 6 months of 2012. Large providers who migrated platforms last year have been important to the increased growth in the market as their growth has picked up again although not as much as we expected in some sectors.

Growth has not been as fast as we predicted previously but we are seeing new entrants to the market who are supporting growth. The introduction of some larger players such as Exponential E and RingCentral in the next few months we can see this having an impact in the future.

We are seeing the emergence of more advanced hosted UC services being offered. Providers are looking to drive revenue by not just selling core hosted features such as dial tone or voicemail but adding hosted UCC on top such as presence and CRM integration. Mobile integration is becoming a key interest area for many providers, although it hasn’t seen huge uptake yet it will be something offered in the future and has the potential to be a significant feature for some customers.

After the many recent articles pronouncing the death of PBX, illume have seen that the PBX is fighting back by repositioning the PBX around UC as well as offering Hosted benefits. UK PBX shipments appear to be rallying and MZA have reported the same in the US, which we see as a reason for the continued slow growth of hosted. As the Hosted market matures, providers will be not just be competing with PBX/ISDN but against other providers. Differentiation between feature sets will then become more important for providers instead of price differentials.

As the hosted market has slowed down in the last year, illume found it important to look at where growth was coming from in terms of new customers. We found that due to the differences in handsets, lack of porting agreements and the difficulty in implementing platform migration meant that customers had to overcome significant barriers to change; hence churn was relatively low.

2013 Forecast & Report

illume and its parent company Cavell has increased their research capabilities in 2013 with Dominic Black joining the team as a Market Analyst. In August we will launch our annual Hosted VoIP Forecast and report & our SIP/IP trunking report & forecast both of which will enter into more detail on the issues discussed above as well as providing our forecast for the market. If you would like to find out more about Cavell or our research capabilities please visit www.illumeresearch.com or email Matt Townend matthew.townend@cavellgroup.com or Dominic Black dominic.black@cavellgroup.com

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