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Hosting and Integration Provide Big Opportunities for Unified Communications Services Companies - But Frost & Sullivan warns of cautious growth ahead
Hosting and Integration Provide Big Opportunities for Unified Communications Services Companies


NewswireToday - /newswire/ - Sydney, Australia, 2008/10/28 - But Frost & Sullivan warns of cautious growth ahead.

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The Australian unified communications (UC) services market earned an estimated AU$340.2 million in 2007 with hosted services such as conferencing, email and telephony accounting for 55.7 percent of revenues. Expenditure on all UC services is expected to remain cautious over the coming two years due to the current financial turmoil. Notwithstanding, revenues are expected to more than double to AU$785.9 million by 2014, at a compound annual growth rate of 12.7 percent between 2007 and 2014. The figures are contained in the latest UC analysis to be released by consulting company, Frost & Sullivan: Australia Unified Communications Services Report 2008.

Australian interest in UC technologies is creating large revenue opportunities for service providers, and global and local system integrators. As UC calls for integration of various applications plus integration to overall business processes, projects are typically complex and require a significant understanding of network, voice and desktop components. This has resulted in integration and implementation services becoming the second biggest revenue contributors to the total UC services sector, accounting for 16.2 percent in 2007. This figure is expected to rise to 21.7 percent of total services revenue by 2014.

The relative infancy of the UC market and continual development of new applications also mean that there is a limited number of system integrators with the depth of skills required to support fully-fledged UC deployments. At present, some of the leading services companies dominating the UC services sector include Telstra, IBM Global Technology Services, Optus/Alphawest, HP and Dimension Data.

Maintenance services - the mainstay of traditional IT services income - accounted for 14.9 percent of total UC services revenues in 2007. This is expected to decline over time as system integrators innovate their offerings to deliver higher-margin services in the hosted, consulting, integration and managed services segments.

Consulting services represent the smallest services revenue opportunity, totaling 4.8 percent of UC services expenditure in 2007. This figure is predicted to grow slowly, reaching 6.8 percent in 2014. A key reason for this is a general reluctance by organisations to invest in the costly pre-sales process of building a UC strategy to integrate into the overall business processes.

The study notes that although managed services - which accounted for 8.4 percent of the UC services revenues last year - is in the early stages of development, it will become an important growth area as system integrators bundle the offering with other add-on features to help drive revenues further.

The study highlights that while vendors are pushing hard to make inroads into the small-to-medium business (SMB) market, take-up of UC technologies remains low with most SMB customers demanding very basic email and voice applications. However, the combination of the current economic situation, the natural price sensitivity of SMBs, plus a desire for simple and easy technology may help drive additional interest in hosted UC solutions.

Audrey William, Senior Research Manager, Frost & Sullivan says, “Currently there are not many system integrators in Australia that have attained the prerequisite level of expertise in complex integration projects encompassing network, voice and desktop components. This shortage of UC skills will create significant opportunities for system integrators and service providers in the next few years. To capitalise on those opportunities, services organisations need to start developing the appropriate skills now. It's going to require investment and a commitment to training and certification over the next 12 to 18 months.”

The Australia Unified Communications Services Report 2008 forms part of the Frost & Sullivan 2008 Unified Communications Program. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews with the press are available.

Frost & Sullivan, the Growth Partnership Company, partners with clients to accelerate their growth. The company's TEAM Research, Growth Consulting and Growth Team Membership empower clients to create a growth-focused culture that generates, evaluates and implements effective growth strategies. Frost & Sullivan employs over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 30 offices on six continents.

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Hosting and Integration Provide Big Opportunities for Unified Communications Services Companies

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