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IP LAN TELEPHONY GROWING FASTER THAN EXPECTED - Study Shows that Market Demand is Accelerating January 24, 2001 - IP LAN Telephony PARSIPPANY, NJ, January 24, 2001 - U.S. Companies are beginning to convert their corporate phone systems from the traditional Private Branch Exchange (PBX) model to Internet Protocol (IP) Telephony faster than expected, according to a new study from PBI Media InfoTech, of Parsippany, NJ and London. According to the new primary research study, titled IP LAN Telephony: Market Demand and Implementation Strategies, 17 percent of U.S. business began the implementation of IP LAN Telephony in 2000, to replace or transform their existing phone systems, that's 30 percent more than previously anticipated. Within four years, the percentage of enterprises that are likely to adopt this new technology will increase to more than 80 percent, according to PBI Media InfoTech, the world's leading provider of information and strategic consulting to the telecommunications industry. With IP LAN Telephony systems, users can connect IP phones directly to the same LAN (Local Area Network) that serves their personal computers. Research of 500 enterprises and small businesses revealed that the market demand for these converged voice and data systems is accelerating. "When we conducted our first study of this market, over a year ago, 13 percent of the enterprises expected to begin installing IP LAN Telephony in 2000, growing to 66 percent by 2004," according to Terry White, the lead analyst for the study. "In our current study, the initial adoption rate has increased by over 30 percent." Enterprises with more than 500 employees will represent the largest segment of this market. Decision-makers for these companies rated 42 percent of their business locations as "Very Likely" candidates for these leading-edge systems by 2005. Among smaller businesses, 25 percent of their sites with more than 10 phones achieved the "Very Likely" rating. Cost savings and remote networking headed the list of reasons why businesses plan to purchase IP LAN Telephony. Most decision-makers believe that one system that can handle both voice and data will cost less than separate systems. One IP LAN Telephony system can handle the communications requirements of multiple sites. "Companies can install one of these systems at a central location, and use it to serve IP phones at remote locations over an IP network," said White. "This is one of the key economic advantages of IP Telephony." In 2000, shipments of traditional PBXs and smaller Key Telephone systems declined by almost 10 percent, according to PBI Media InfoTech's InfoTrack databases used to track that market. The growth rate of this older generation of equipment is projected to continue to decline over the next five years. During that same period, the market for IP LAN Telephony will increase by almost 90 percent per year. This emerging technology accounted for $138 million in U.S. sales in 2000. Revenue for these next generation systems is projected to exceed $3.2 billion by 2005. This tremendous growth opportunity is attracting the attention of a wide range of equipment makers. The leading data networking equipment vendors are moving aggressively into this new market. Based upon PBI Media InfoTech's analysis of market share for the first nine months of 2000, 3Com (Nasdaq: COMS) and Cisco Systems (Nasdaq: CSCO) were the leaders in this emerging market segment. Avaya Communication (NYSE: AV), Nortel Networks (NYSE: NT), Siemens and Alcatel (NYSE: ALA), who are the leading manufacturers of traditional PBXs, have all introduced robust IP LAN Telephony product lines during the past year to combat this competitive threat. The research further revealed that enterprise decision-makers were split regarding their supplier preferences for these integrated voice and data systems. 37percent indicated a strong preference for their traditional PBX vendor, while 26 percent preferred their current data network supplier or Value Added Reseller (VAR). More than a third of these enterprises, however, would rather work with a new supplier. This apparent backlash was even more evident among small businesses, where more than half expect to utilize a new supplier for these next generation systems. This opens up the market for some new competitors, such as Shoreline Communications and Artisoft (Nasdaq: ASFT), both of whom are gaining share, based on PBI Media InfoTech analyses of this emerging market. PBI Media InfoTech is a subsidiary of Veronis Suhler & Associates Communications Partners, III L. P. specializing in global information and professional services for the telecommunications and data networking industries. PBI Media InfoTech offers a comprehensive scope of information and professional services, including custom project consulting, InfoTrack market and competitive intelligence programs, tactical sales support tools, primary research studies, and custom marketing programs. Further information about PBI Media InfoTech can be obtained at the company's web site at www.thephillipsgroup.net |
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