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February 06, 2012

Recent Report by Frost & Sullivan Cites Strong UC Trend in Australia

By Kerry Doyle, Contributing Writer

Small and medium enterprises face common obstacles when trying to adopt a new communications platform or update an existing infrastructure. Unified communications (UC) are those programs and protocols that allow users to contact each other using a range of different media platforms at any given time through a common device. It brings together diverse communication tools, from mail programs to video conferencing and telecommunications, to establish streamlined connectivity between users. Generally, there are three types: Hosted services, managed, and on-premise.

In Australia, hosted UC services, which includes UC applications provided over a cloud-based model, is the largest segment in the Australian market, accounting for 45 per cent of all UC services revenues in 2011. A hosted service offers an incremental, cost-effective method for increasing operational efficiency. For example, when you add individual UC components accessible via the cloud you increase the versatility and power of your current communications infrastructure. And you can do this at a fraction of the cost of a system-wide communications upgrade.

The recent Frost & Sullivan research release, Australian Unified Communications (News - Alert) Services Report 2011, stated that the expected shift toward hosted and cloud-based solutions will continue to push revenues higher and increase service adoptions resulting in a predicted revenue contribution of 50 per cent by 2018. In terms of managed services which consist of end-to-end management of UC applications by a service provider, increased demand has occurred. Managed services reduces an organization’s reliance on IT

In addition, once a managed UC system is in place, software upgrades are easier to perform as well as user activation and network maintenance. Communication costs are lower, especially for long distance and international calling. Managed services accounted for 15.5 per cent of UC services revenues in 2011and is expected to rise to 18 per cent by 2018.

It’s also important to note that the Frost & Sullivan (News - Alert) report anticipates that one-time integration and installation service will drop to 15 percent of all UC service revenues. So even though the sector projects strong growth into 2018, the fact that installations and integrations occur only once in the life of an organization will affect its projected long-term viability. On a related note, the report indicated that the adoption of videoconferencing solutions is creating demand for specialist audio-video integrators skilled in integration, support functions, and with a deep understanding of audio and video technologies.

The Frost & Sullivan report also stated that despite the increase in hosted and managed services, the on-premise model will be dominant, at least until 2015. The report also provided information regarding the growth of the consumerization of IT. Due to the strong mobile device market, the need for mobility-related services from initial set-up and integration to ongoing services such as troubleshooting, security and connectivity will increase. Corporate acceptance of bring your own devices (BYOD) has highlighted how critical it is for IT departments to come on board to back this trend.

In terms of hosted and managed services, the demand is the same. According to Audrey William, ICT Research Director, Frost & Sullivan, “The Australia UC Services market will drive a change in the delivery of services over the next five years. With Hosted and Managed Services growing in importance, channels, service providers and systems integrators need to re-invent themselves to offer value add services and this means changing the existing model of selling services.” It remains how deeply affected UC adaption in Australia will be affected by this trend.