IP telephony has turned the corner, says research firm BMI-TechKnowledge, as distributors of related products say they are experiencing some of their best sales to date.
According to BMI-T's latest report, “The local PABX and converged voice systems market”, the CBX (converged voice) market now accounts for more than 10% of the total PABX market, representing a value of R65 million during the last year. This is double its market share of the previous year.
A definition of IP telephony by www.searchunifiedcommunications.com is that it is a general term used for technologies using the Internet Protocol's packet-switched connections to exchange voice, fax and other forms of information that have traditionally been carried over the dedicated circuit switched connections of the public switched telephone network.
Rob Lith, CEO of Asterisk distributor Connection Telecom, says the market, especially in the small and medium enterprise segment, has grown in leaps and bounds since 2006 as small companies have seen the value in the cost savings and flexibility offered by open source IP telephony.
“The savings are readily apparent, especially when it comes to additions, moves and changes that happen frequently with small companies as they grow and have to reconfigure their offices. It is easy to pick up an IP handset, walk over to the next location, plug it into the Ethernet switch and you are ready to go.”
Lith says many small companies are putting in a second ADSL connection to cater for their use of IP telephony and are getting good voice quality even though this is not necessarily a business service.
No bandwidth issue
He says sales of the Asterisk open source PABX cards have doubled every year since Connection Telecom was founded in October 2004 and it looks to increase further as the large enterprises start switching over.
“The large corporations have always had a toe in the water, but now it seems they are seriously looking at moving over to IP telephony and open source solutions,” he says.
BMI-T says the majority of activity in the market for IP-enabled voice systems is still found in the augmentation of customers' existing digital PBX infrastructure. The cost of IP-enabled handsets is often cited as an important inhibitor to adoption of pure IP systems, along with the costly necessity of the replacement of network cabling.
It also says other perceived obstacles on the road to the envisaged IP telephony future include the high cost of bandwidth, the reliability of PC- and LAN-based applications, and the shortage of savvy technical staff capable of supporting them.
However, Lith says bandwidth costs are becoming less of an issue and, because IP telephony systems are easy to use, the issue of skills is not as dominant a factor as it could be with proprietary systems.
Handsets hold their own
Fiona McLean-Blake, product manager at Zyko, the distributor of Polycom IP handsets, says the perceived high cost of the handsets is not really an issue with customers as they realise they need quality and often the handsets are bundled into the whole solution.
“We have seen phenomenal growth. Last month was our best ever and overall growth of the Polycom handsets has been at least 100% year-on-year.”
McLean-Blake says the economic downturn has encouraged small companies to go open source as this cuts their running costs considerably, while larger companies are slowly moving towards it.
“Over the past two years, we have really seen open source become an acknowledged technology in the communications arena. For instance, we have also seen great growth in our open source teleconferencing products.”
BMI-T says that in the small PABX systems market, the general economic slowdown in 2008 is set to reflect in a slower rate of growth this year compared with a record year in 2007.
“SMEs are traditionally much more sensitive to a business downturn, although this time around the impact of a downturn has been somewhat cushioned by the fact that some leading suppliers offer SME customers the option of signing a rental agreement, thus replacing capital outlay for new equipment with a more manageable operating expense. These offerings have been available for more than two years, so we are seeing an ongoing trend that began even before the economic slowdown emerged,” the report says.
BMI-T says on a longer-term basis, an eventual upswing in consumer confidence is likely to underpin a marked resurgence in small PABX systems sales in the SME market. This market is not yet saturated, and sales of both new PABX sites and upgrades will continue unabated for the foreseeable future, it notes.
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