IP LAN Telephony Growing Faster Than Expected;
Study Shows That Market Demand Is Accelerating
PARSIPPANY, N.J., Jan. 24 /PRNewswire/ -- 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 The Phillips Group 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 The
Phillips Group 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 The Phillips Group 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 The Phillips Group
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. 37 percent 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 The Phillips Group
InfoTech analyses of this emerging market.
More information about The Phillips Group InfoTech's study is available by
calling 973-884-0100 or via e-mail to sales@thephillipsgroup.net.
The Phillips Group 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. The Phillips Group 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 The Phillips Group InfoTech can be obtained at the
company's web site at phillips-infotech.com.
ONLINE PRESS KIT: cherenson.com
SOURCE Phillips Group Info Tech
-0- 01/24/2001
/CONTACT: Michael Cherenson of The Cherenson Group, 973-992-7800
ext.104, or mcherenson@cherenson.com, for Phillips Group Info Tech/
/Web site: phillips-infotech.com
cherenson.com
CO: Phillips Group Info Tech; Veronis Suhler & Associates Communications
Partners, III L.P. ST: New Jersey IN: TLS SU:
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