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3 Questions: VoIP Hits the Mainstream

April 27, 2005

IT Business Edge

With Michael Shulman, director of research, ChangeWave Research. ChangeWave, which has been following adoption of VoIP in the business and consumer sectors for the past year and a half, points to increasing acceptance of the new telephone platform among corporations.

Question: What does your work show about the growth and acceptance of VoIP?
Shulman: We've been surveying on specific topics for about 18 months. The last report we published had no surprises. The adoption rates now are nearing mass market adoption rates. There is no buyer uncertainty about the technology. The report is sort of the culmination of a year and a half of work. It is a confirmation of a trend that has gone from early adopter to nearing mass market acceptance this year. That's both for the consumer and corporate segments. Corporations have totally different buying criteria. They need to be concerned about the impact of any change in the business if anything goes wrong. Corporations typically are a little more cautious and also don't throw out what they already have. Two-thirds of respondents to the survey say that new VoIP systems will be added to traditional telephony. The model is that people are keeping equipment but getting lower-cost long distance that is based on VoIP. For the larger corporations, it's a matter of integrating equipment and using VoIP for some of their advanced features.

Question: What is driving VoIP?
Shulman: Clearly, there are two agendas. One is the normal continuing push to reduce costs. The second trend is the desire to integrate the corporate communications system with the sort of systems that support people on the road and people accessing data. The point is that VoIP is more and more of a corporate tool. We can't quantify it but it looks like other surveys we did. ... It's clear that VoIP is part of a larger effort to get more data in and out of the enterprise. ... It's really a mass market phenomenon, with no unusually high barriers. What we believe is that this year VoIP will be deployed at a rate faster than most analysts think.

Question: Does any company stick out as well-positioned?
Shulman: Of the traditional phone vendors, Avaya has a strong and strengthening position in the marketplace because of its ability to create, build and support mixed VoIP and traditional systems. Cisco now does it, but Avaya is looking at 20 to 25 percent growth this year in revenue. They are losing a lot of analog [business] because of the growth of IP. That being said, they have a very strong growth rate. That's probably the biggest thing. Our survey shows them doing very well among hardcore IT guys. They are predicting 20 to 25 percent revenue growth this year, which is a huge number.