On-Demand VoIP Ahead Of Demand

By RICH TEHRANI
President & Group Editor-in-Chief

I have seen a resurgence of interest in the hosted PBX market. I launched the world's first hosted communications magazine back in 2000 called Communications ASP. The market demand for the magazine was amazing -- both subscriptions and advertising were way ahead of budget.

Then the crash happened and ASP became a terrible word and scores of communications ISPs went out of business.

Markets go up and down over time but still I have obviously been a fan of hosted communications for years.

The thing is that now I am seeing so many vendors jumping into the space and at the same time I am not sure enterprise customers are as excited about the prospect.

I speak in front of hundreds of communications executives every month. In the past year I have spoken in virtually every major US city and on Monday I go to Toronto to speak again.

The interesting thing is that most audiences I speak with aren't considering a hosted solution. The interest level is between 2% and 5%. Perhaps this number will grow and perhaps it is a big enough percentage to keep a number of hosting companies alive. Maybe the cross-section of companies I speak in front of is not representative of the market as a whole.

I wrote about the hosting market growing slowly back in March 2005 as well and in this case it was market research that predicted the market will grow more slowly than people thought.

But on the vendor side I see more and more companies coming into the space. Perhaps they aren't interested in research or they think the market will grow more quickly than expected. Something has to give. I can't see corporations changing their attitudes overnight but perhaps they will.

I give tons of credit to Salesforce.com for single-handedly carrying the hosted torch since the bubble burst. Will other companies make a ton of money from hosting communications? Perhaps but there needs to be lots of mainstream success stories about hosting to convince IT and communications management to jump on the hosted bandwagon.

The VoIP business is like no other I have ever seen in technology. The market either grows in triple-digits or it consolidates by 85% over a few years. We haven't had slow and steady growth -- ever. Perhaps hosted VoIP will be the same and once it takes off, look out.

There is a wild card here and it is business continuity. Hosting is the ideal way to ensure your communications are safe from down-time. As stories of hosting saving company communications circulate, perhaps we will see the surge in interest that makes the communications market so exciting and unpredictable.

I will certainly keep an active watch on this market as it is so close to my heart.

-----

Rich Tehrani is President and Group Editor in Chief at TMC.