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Opportunities for Hosted UC Services Amidst Cautious Spending Says Frost & Sullivan - Asian enterprises are expected to adopt a cautionary approach towards IT investments in the next two years, preferring to spend on applications that can shift capital costs to operational costs and solutions that focus on growing top- and bottom-lines
Opportunities for Hosted UC Services Amidst Cautious Spending Says Frost & Sullivan

 

NewswireToday - /newswire/ - Singapore, Singapore, 2008/12/16 - Asian enterprises are expected to adopt a cautionary approach towards IT investments in the next two years, preferring to spend on applications that can shift capital costs to operational costs and solutions that focus on growing top- and bottom-lines.

   
 
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This is likely to work in favour of driving demand for hosted unified communications (UC) services which offer OPEX (operational expenditure) or utility-based pricing models.

New analysis from Frost & Sullivan (enterprisecommunications.frost.com), Asia Pacific Unified Communications (UC) Services Market, finds that the market - covering six sub-regions (14 countries) in Asia-Pacific - earned revenues of US$2.59 billion in 2007 and estimates this to reach US$6.58 billion by end-2014, at a CAGR (compound annual growth rate) of 14.2 percent (2007-2014).

The Asia-Pac UC services market is forecasted to grow by 13.4 percent (year-on-year) in 2008 to close the year at revenues of US$2.94 billion, and by a further 14.2 percent next year, reaching a market size of US$3.36 billion by end-2009.

Hosted UC services, which include telephony, email and conferencing services, are the most commonly contracted UC services, accounting for approximately 53 percent of revenues in 2007, 2008, as well as 2009.

If you are interested in a virtual brochure, which provides service providers, vendors/manufacturers, end users, and other industry participants with an overview of the Asia-Pacific unified communications services market, then send an email to Sarah Lourdes at sarah.lourdes[.]frost.com, with your full name, company name, title, telephone number, fax number, and email address. Upon receipt of the above information, an overview will be sent to you by email.

According to Frost & Sullivan senior industry analyst Yen Yen Har, "In the next 24 months, businesses will look to spend-to-save and focus heavily on technologies that can help reduce costs and optimise resources. While CIOs understand the potential benefits of newer and emerging technologies such as UC in meeting these priorities, the high upfront cost of full-scale UC deployment is a big limiting factor.

"The hosted model allows enterprises to trial and experience the real value of UC without the significant capital investments," she says, adding that hosted services are expected to continue to account for the bulk of UC services revenues, hovering just over the 50 percent mark by 2014.

UC typically involves the integration of various UC elements from a variety of best-of-breed solutions providers, as well as with other business applications and existing business processes. The need to project-manage such complex implementation which demands a comprehensive understanding of networks and voice-data integration skills makes professional services the second biggest contributor to UC services.

Professional services, encompassing consulting, implementation and integration, accounted for 22.2 percent (US$575 million) of the total UC services revenues in 2007 and this is expected to grow to 25.5 percent (US$1.68 billion) by end-2014.

Managed UC services - by far the smallest segment in UC services currently, accounting for about 8.3 percent (US$215.1 million) of revenues last year - is expected to see rising uptake as more businesses find it viable to outsource such functions and eliminate the need for costly in-house technical expertise.

Maintenance services, which accounted for 16.6 percent (US$430.3 million) of the total UC services revenues in 2007, are expected to decline over time as maintenance is increasingly viewed as a standard service in any given hosted or managed services contract. To compete more effectively, system integrators and service providers bundle maintenance while focusing on delivering higher margin services such as consulting, integration and implementation.

Har says that the greatest challenge towards wider adoption of UC technologies among businesses is the difficulty in quantifying real productivity gains and demonstrating tangible ROI (return on investments), as well as the complexity in implementation. "The whole UC deployment process involves long-term strategic planning requiring business process re-engineering, and in some cases, a complete change management program. It involves changes to existing structures and the way people work; which is why very few enterprises are committed to changing the already established work cultures and embark on UC deployments," she notes.

"Given that UC is a fairly recent concept also means that there is a lack of skilled resources to tackle complex voice and data integration projects. System integrators and service providers will need to invest in training and certifying project teams," Har suggests. "There is also a need to understand how UC will fit into an organisation's existing business processes and support a much wider company strategy."

She adds that partnerships with leading vendors and complementary solutions providers to offer end-to-end services will also help strengthen UC offerings in order to influence corporations to adopt a truly integrated UC environment.

The Asia Pacific Unified Communications (UC) Services Market study is part of the Enterprise Communications Growth Partnership Service program, which also includes research in the following markets: UC quarterly trackers, UC end user studies (selected countries), enterprise telephony, managed telephony services, and conferencing and collaboration. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Analyst interviews are available to the press.

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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Opportunities for Hosted UC Services Amidst Cautious Spending Says Frost & Sullivan

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