Thursday, 11 August 2011 21:22

Kiwi UC market rebounds for high growth

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New Zealand's unified communications market is back on track after a slow return to growth post the global economic downturn, with forecasts that the UC market is now is likely to hit $212.2 million by 2017.


In its latest report on the New Zealand UC market, analyst firm Frost & Sullivan says the slight decline of 1.2 percent in market value between 2009 and 2010 because of the global economic slowdown, cautious business spending and longer sales cycles, has now been cast aside, and that local service providers, mainly Telecom NZ (Gen-i) and TelstraClear, will be well positioned to leverage their carrier expertise to cater to the demand.

Frost & Sullivan says the predicted UC market growth will be due to the for conferencing, collaboration, email and mobility solutions.  The study analysed the total addressable opportunity, market trends and the competitive landscape for all major UC application segments and enabling platforms, including enterprise telephony, email, unified messaging, conferencing and collaboration, mobility, unified client, presence and integrated UC applications and contact centre applications.

Frost & Sullivan's ICT research director Audrey William, said the study found that government, banking and financial services institutions (BFSI) and professional services led the adoption of UC in 2010, accounting for more than 70 per cent of the year's UC revenues.

According to William, the continuing need for cost savings given the slow economic recovery has been the major driver for government deployments, while 'the BFSI and professional services segments are primarily turning to UC for productivity and competitive gains.'

'A number of major banks and legal firms, for example, have deployed videoconferencing solutions to reduce travel costs and improve internal collaboration.'

'The continuing need for cost savings given the slow economic recovery has been the major driver for government deployments, while the BFSI and professional services segments are primarily turning to UC for productivity and competitive gains,' William said.

However, the study cautions that these verticals are approaching saturation point for traditional applications such as enterprise telephony, email and instant messaging, and that future growth within these sectors will largely come from infrastructure refreshes and uptake of mobility, conferencing and collaboration solutions.

William says that the economic impact of the recent earthquakes in Christchurch has been particularly strong in the South Island and non-essential IT spending is expected to be minimal in the year ahead as investment is focused on rebuilding essential platforms. 

For most government bodies and businesses, a key component of this rebuilding will be their communications infrastructure, with Frost & Sullivan predicting that significant deployments of telephony, email and contact centres will be required as organisations replace their damaged or ageing infrastructures with up-to-date, advanced versions. This is expected to drive revenues for many UC vendors in New Zealand.

Audrey also says that another effect of the earthquake is a likely shift in the preferred mode of delivery of UC services. 

'Currently organisations show a strong desire to own and self-manage their UC infrastructure.  However, heightened awareness of the need for redundancy and resilience are expected to drive higher adoption of hosted solutions.  Similarly, business continuity and disaster recovery solutions, which were not seriously considered by businesses prior to the natural disasters, are now regarded as critical in allowing businesses to stay operational despite major disruptions.'

Frost & Sullivan predicts that, as these solutions gather momentum, the local service providers, mainly Telecom NZ (Gen-i) and TelstraClear, will be well positioned to leverage their carrier expertise to cater to the demand.

According to William, IT managers canvassed by the survey have made their views on unified communications 'crystal clear.' 

'Almost unanimously, they are looking to UC for improved business processes and an ability to reduce costs. Until recently the biggest challenge was the overall cost of purchasing and running such solutions. However, as more and more organisations realise the benefits of their UC deployments this concern is dissipating and we anticipate steady market growth for the next six years.'

Other trends identified by the study include:


'¢    Enterprise telephony: Despite being one of the biggest contributors to overall UC revenues in 2010, enterprise telephony is nearing market saturation and future growth will largely rely on refresh cycles and migrations to IP telephony.

'¢    The rise of BYOD (Bring your own device): Employees are increasingly using their own mobile devices such as smartphones and tablets to connect to the enterprise network and this in turn is driving uptake in UC applications such as email and IM.

'¢    Mobility: About 55 per cent of organisations are convinced of the role of tablets as an enterprise device with a further 29 per cent planning a trial or deployment.  The main business requirements of mobile devices are integration with instant messaging platforms to enable a single contact number, particularly to empower remote or mobile workers.

'¢    Conferencing and collaboration: This area will experience strong growth (approximately 15.6 per cent CAGR) through to 2017 due to demand for video conferencing solutions as a means of reducing travel costs and increasing productivity.  In addition, video conferencing will shift away from being viewed as a stand-alone solution and will increasingly be integrated with chat, email, presence and collaboration applications on the one platform.

'¢    SIP trunking and virtualisation are the technology enablers that will drive further uptake of UC solutions, with SIP offering fixed mobile convergence and better interoperability between multi vendor platforms, and virtualisation helping to maximise utilisation of existing computer power.

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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