Hosted UC Market to Grow in APAC

by CXOtoday Staff    Dec 26, 2008

An increasing number of Asia-Pacific enterprises are now turning to cost-effective UC (unified communications) hosted solutions to accelerate growth during this worldwide downturn, according to a Frost and Sullivan report on Asia Pacific UC services market.

The market covering 14 countries, earned revenues of $2.59 billion (Approx. 259 crore) in 2007 and is forecasted to grow by 13.4% YOY in 2008 to close the year at revenues of $2.94 billion (Approx. 294 crore). It will expand by a further 14.2% next year, reaching $3.36 billion (Approx. 336 crore) by the end of 2009 and will reach $6.58 billion (Approx. 658 crore) by the close of 2014, said the report.

UC typically involves the integration of various elements from a variety of best-of-breed solutions providers, as well as with other business applications and existing business processes.

Hosted UC services, which include telephony, e-mail and conferencing services, are the most commonly contracted functions. They collectively account for approximately 53% of revenues in 2007, while professional services, encompassing consulting, implementation and integration is the second largest segment, with 22.2% of the total UC services revenues in 2007.

Managed UC services, by far the smallest segment in UC services currently with about 8.3% of revenues last year are expected to see rising uptake as more businesses will find outsourcing such functions more viable and with this eliminate the need for costly in-house technical expertise.

At the same time, maintenance services, which accounted for 16.6% of the total UC services revenues in 2007, are expected to decline as they will be 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, said the report.

"In the next 24 months, businesses will look to spend-to-save and focus heavily on newer and emerging technologies such as UC that can help reduce costs and optimize resources. While the high upfront cost of full-scale 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," said Yen Yen Har, senior industry analyst at F&S.
The challenge towards wider adoption of UC technologies among businesses is the difficulty in quantifying real productivity gains and demonstrating tangible ROI as well as the complexity in implementation.

"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. There is also a need to understand how UC will fit into an organization’s existing business processes and support a much wider company strategy. 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 environment," said Har.