by: Chris Hill
San Francisco, California July 26, 2006: Largely due to the integration of
computer-telephony networks and communication tools, enterprise hardware
spending has rebounded from the slow economic growth that plagued much of
the market in 2001-2003.
According to Internet News, revenue for enterprise equipment reached $98.3
billion in 2005 and is expected to reach $121.7 billion by 2009. Fueled by
next generation technology and the need to replace aging hardware,
voice-processing equipment also rebounded in 2004-05. Following three
years of steady declines, Computer-telephony integration (CTI) was the
fastest-growing piece of the enterprise market in 2005, with a 10.5
percent increase to $5.7 billion.
According to a study conducted by the Telecommunications Industry
Association (TIA), earlier this decade most enterprise equipment was
relatively new; however, by 2004, leases were expiring and companies were
seeking to upgrade to newer technology. Products from the late-1990s like
the Cisco AS5300 VoIP Gateway were being upgraded to newer models like the
Cisco AS5300 for improved performance and fuller feature sets. Currently
the AS5350XM, with an even faster processor, has replaced the AS5350 as
the cutting-edge gateway in the family.
Interest in IP telephony has also exploded largely in part to the overall
value and cost savings, as well as additional features such as virtual
numbers and videoconferencing.
These service options offer Telcoms as well as cable and internet service
providers (ISPs) the opportunity to diversify their product offerings and
explore additional revenue streams. As more companies engage in marketing
aimed at bringing digital phone service to the mainstream, we can expect
to see demand for the hardware that powers the digital phone revolution to
increase in kind.
With solutions like VoIP and video conferencing emerging as the future of
business communication, companies are increasingly transitioning towards
newer technologies in order to maintain a competitive advantage in their
market. Anticipating the total revenue from enterprise equipment to reach
$121.7 billion by 2009, TIA predicts the demand for legacy technology such
as PBX to drop in over-all market growth to a mere 1.1% by the year 2009.
While in the short term, IP/converged systems will incrementally boost PBX
sales, once the installed base becomes predominantly IP, we will see a
sharp decrease in replacement demand for these older technologies.
While many companies have already embraced this new technology, much of
the mass-market is still uncertain of the reliability and ease of use
associated with VoIP technology. Unlike the technology-savvy market
segments, which have been generally accepting of this new technology, the
average consumer still needs reassurance that the benefits of
computer-telephony can be easily integrated into their present
communication lines. For instance, questions surrounding access to 911
emergency services has been a major factor in the acceptance rate of
digital-phone service. With industry cooperation, and a targeted marketing
campaign to increase awareness about the advantages of VoIP, the average
user will be more comfortable with the switch from traditional telephony.
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