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10/13/2005
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VoIP: Europe Not Really Interested, Study Says

Fewer than half of the European organizations surveyed have spent anything on IP telephony, and less than a third expect to increase spending this year, according to a new Forrester study.

In the absence of a killer VoIP application, European organizations have been comparatively slow to adopt the technology, contradicting much of the vendor hype about IP communications in Europe, according to a new study by Forrester Research.

In "IP Communications Adoption In Europe," senior analyst Larry Velez says that the vendor hype simply isn't true. Only a quarter of European organizations will have adopted VoIP by this year, "giving a growth rate of just 100% of a small number over a year -- assuming that those projects are successful."

In fact, less than half of the European organizations surveyed have spent anything on IP telephony, and less than a third expect to increase spending this year. Indeed, Velez notes that while 32% of companies surveyed are evaluating or piloting VoIP, and there will be twice as many deployments this year than in 2004, some 40% of respondent still have no immediate plans to adopt the technology.

The big issue, according to Velez, is that European organizations have not yet built the business case to justify the perceived costs of deploying VoIP. Indeed, 34% of respondents identified cost as the major obstacle to VoIP deployment, with concerns about reliability next and 15% and compatibility issues at 9%.

"Forrester’s insights into the evaluation process of large European firms indicate dissatisfaction with security and interoperability; however, these still rank lower than the problem of cost justification," Velez writes. "Forrester believes that this is a sign of immaturity among large European firms. Many firms have not come to grips with defining the economic basis or business case that identifies when to begin migration."

Nevertheless, Velez sees some promising signs for European VoIP in the fact that, while most organizations will not increase spending this year, a sizeable minority nevertheless will. "This is encouraging," he writes, "as it indicates that firms are becoming more successful at overcoming the biggest obstacle to adoption -- justifying the cost for the transformation."

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