The Evolution and Impact ofBusiness VoIP: A Carrier’s View
Mark Fishler
Vice President – Product Management, Voice and Data Business Services
“Although the consumer market hasattracted the most attention from thepress, the fastest growing VoIPmarket is hosted IP voice servicesfor business customers.”
– IDC, September 2004
Source: IDC U.S. Hosted IP Voice Services 2004-2008 Forecast, September 2004
39% of Respondents are Current IPT Users
Source: The Yankee Group 2004 IP Telephony Deployment Strategies Survey
Which best describes your current use of IPT?
Partially
Deployed
25%
Fully
Deployed
5%
Currently
Testing
9%
FutureUsers
61%
CurrentUsers
39%
22% of “Future Users” Plan to Deploy Soon
Source: The Yankee Group 2004 IP Telephony Deployment Strategies Survey
Future Users: What are your future plans?
Budgeted
w/ in12 mos
22%
Test/Plan
w/ in24 mos
24%
Test in
12 mos
15%
FutureUsers
61%
CurrentUsers
39%
Source: Yankee Group
Revenues
Productivity
Mobility
Cost andNetworkComplexity
• Unified Communications
• Real-Time Customer Info
• Enterprise-Wide Networking
• Reduced Toll Charges
• Integrated Wiring and Maintenance
• More Operational Efficiencies
• New Multimedia Offerings
• Broadened Delivery Systems
• Increased Customer Contacts
• Anywhere, Anytime Accessibility
• Increased Employee Flexibility
• More Collaboration Options
Maximize Operational
Excellence and Innovation
IP Services Present aSignificant Value Proposition
Evaluating Critical Networking Needs
BusinessImperatives
ITApplications
LAN/WAN
Implications
one.
two.
three.
IP Telephony Deployment Questions
•What technology platform should I implement?
•Will I need to throw out my existing investment?
•Will I save money over my existing TDM solution?
•Can I operate in a hybrid environment?
•Do I have the staff to operate a VoIP network?
•When will my new VoIP investment become obsolete?
•Will my selected platform be able to support new applications?
•Do converged networks really work?
•Will my business really recognize the promise of VoIP?
•Can my LAN/WAN support VoIP today?
Hosted vs. IP PBXPreference Determinants
Factors Favorable toHosted
•Requires little in-housemanagement expertise
•Multiple sites
•High percent on-net calling
•Longer VoIP migration period
•Mixed existing telecomplatforms
•Limited capital
Factors Favorable to IP PBX
•Available in-house managementexpertise
•Fewer sites
•Low volume of on-net calling
•Ability to perform a flash cut
•Available capital
•Existing WAN bandwidth
Customers Have Multiple VoIP Options
Economies for Customer
Reliance onManaged-ServiceProvider
Low
Low
High
High
Primarily VoIP PBX Option
Primarily Network Softswitch Option
Owned
Owned
Managed
Managed
Outsourced
Outsourced
HostedHosted
HostedHosted
IDC Hosted VoIP Cost Analysis
•Hosted voice services are less expensive than PBXequipment and have a fundamentally different economicstructure from PBXs because:
–Capital expense is reduced
–Maintenance and equipment costs are greatlyreduced
–There is a wider opportunity to reduce long distancecharges
Source: IDC U.S. Hosted IP Voice Services 2004-2008 Forecast, September 2004
U.S. Business Hosted IP Voice Forecast
20042005200620072008
Sites (000)51550200400
Growth %NA200233.3300100
Users (000)753001,2506,00012,000
Growth %NA300316.7380100
Users Per Site1520253030
Monthly Revenue 6562595653Per User
Total Revenue58.5222.3879.9 4012.5 7647.9
Growth %NA280.0295.8356.090.6
Source: IDC U.S. Hosted IP Voice Services 2004-2008 Forecast, September 2004
Growth Factors for VoIP
•Increased broadband penetration
•Improved voice quality
•Not subject to traditional telephony regulation
•Security
Core Network Evolution
Anytime, Anywhere Access: IntegrationMakes it Possible, Simple for Customers
Access from Any Place, Any Device
The Evolution and Impact ofBusiness VoIP: A Carrier’s View
Mark Fishler
Vice President – Product Management, Voice and Data Business Services