The Slow Rise Of Managed Voice Services

The Slow Rise Of Managed Voice Services

Elena Malykhina, Technology Journalist

May 20, 2005

4 Min Read
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Over the past year and a half, major carriers such as AT&T and Verizon have feverishly rolled out managed services. While these providers are interested in getting a slice of the hosted voice-over-IP and managed customer-premises-equipment, or CPE, markets, the number of businesses interested in deploying these services hasn't grown substantially in the past few years.

"Service providers want a piece of enterprise VoIP and CPE spending," says Matthias Machowinski, directing analyst of enterprise voice and data at Infonetics Research Inc. "They don't want to just provide a dumb pipe to the network, so that's why they're rolling out these services," Machowinski says.

Businesses have several choices in how they deploy voice over IP. They can implement it using in-house resources, a hosted VoIP service provider, or managed CPE services. Many businesses want to stay in operational control of their voice-over- IP networks. This is the main reason why they aren't signing up with services providers, Machowinski says.

chart -- Voice Equipment -- How is telephone service provided at your headquarters, and what do you expect by 2007?Companies also are concerned with the operational costs associated with managed and hosted services. While up-front costs for hosted or managed services usually are low, monthly fees that services providers charge can run more than in-house deployment of voice over IP.

Ensuring the security of voice-over-IP networks also is a concern. "Businesses are becoming aware of the security implications of putting voice on a data network because, when voice traffic becomes data traffic, there are many threats it's being exposed to," Machowinski says. "VoIP isn't going to happen overnight, but there's going to be a long-term migration" to it.

Is your company planning to change its telephone service over the next year or two? What direction is it planning to go in? Let us know at the address below.

Elena Malykhina,
Associate Editor
[email protected]

Service Spending
What has your company spent on hosted IP-voice and managed-CPE services?

Spending on hosted IP-voice services rose 58% between 2003 and 2005, according to Infonetics Research estimates, from an average of $157,607 in 2003 to $249,103 last year. Expenditures attributed to managed CPE services have rose even more--an average increase of about 129%, climbing from $84,889 in 2003 to $194,056 in 2005.

chart -- Service Spending -- What has your company spent on hosted IP-voice and managed-CPE services?

Features, Please
How do you use IP-voice services?

Companies are going above and beyond in providing personnel with adequate phone service. Of the companies with IP-voice operations that Infonetics Research surveyed, few limit service to basic voice features. Across the 240 sites, only 12% report offering just basic service. Most companies, 88%, add enhanced features to meet workers' needs.

chart -- Features, Please -- How do you use IP-voice services?

Decision Drivers
Which factors drove your company to deploy IP-voice services?

Predominately, businesses are supporting voice over IP because of its manageability. Operational costs, flexibility, and scalability also are major deployment drivers. Every company already owns functioning telecommunications services and data-management systems. But the need to consolidate voice and data is behind the adoption of VoIP at slightly more than half of companies that Infonetics Research interviewed.

chart -- Decision Drivers -- Which factors drove your company to deploy IP-voice services?

Rollout Hurdles
Which factors drove your company not to deploy IP-voice services?

While voice over IP appears to be a viable telecommunications option, it's important to understand its capabilities and limitations. The technology is forcing companies to take stock of their infrastructure. Cost concerns remain a barrier to more pervasive use of VoIP. However, of 362 companies surveyed by Infonetics Research with no plans to deploy IP voice, 41% say the reason is because their current phone system is good enough.

chart -- Rollout Hurdles -- Which factors drove your company not to deploy IP-voice services?

About the Author

Elena Malykhina

Technology Journalist

Elena Malykhina began her career at The Wall Street Journal, and her writing has appeared in various news media outlets, including Scientific American, Newsday, and the Associated Press. For several years, she was the online editor at Brandweek and later Adweek, where she followed the world of advertising. Having earned the nickname of "gadget girl," she is excited to be writing about technology again for InformationWeek, where she worked in the past as an associate editor covering the mobile and wireless space. She now writes about the federal government and NASA’s space missions on occasion.

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