IDC Finds Hosted IP Voice Services Handicapped by Poor Quality and Service

FRAMINGHAM, MA – SEPTEMBER 5, 2007 – Although the demand for hosted IP voice has been growing over the past two years, it is not ready to challenge PBX any time soon for supremacy in the enterprise communications market. Although IDC believes that hosted IP voice will eventually develop into a compelling service option, a great deal of work still needs to be done to improve the service. IDC expects the market for hosted IP voice services among U.S. businesses to reach nearly $456 million by the end of 2008.

Although the market for hosted voice services will continue to grow at a strong pace, this growth masks several challenges that the industry will continue to face over the next few years. Foremost is the issue of quality, including presale design and implementation, as well as service quality. Service providers must also develop a solid value proposition beyond selling a low-cost commodity service.

"Some of the early implementations were flawed, leading to customer cancellations and botched deployments," says Rebecca Swensen, research analyst, Voice over IP Services. "Although there are plenty of examples of smooth implementations and satisfied customers, the stain of poor service hangs over hosted IP voice like a dark cloud."

IDC believes the lessons learned from these early deployments are a painful but necessary part of the adoption cycle as the hype and potential of a new service runs up against the reality of customer expectations. Conversations with enterprise IT managers and service providers confirm that while delivering quality VoIP via IP PBX is hard, delivering hosted IP voice is even harder.

The IDC study, U.S. Hosted IP Voice Services 2007–2011 Forecast: Still Looking for a Home (IDC #207136), analyzes the U.S. hosted IP voice market up to 2011. It highlights key drivers and trends and forecasts revenue for the entire market and segments, including core services and access.

To purchase this document, please contact IDC Sales at 508-988-7988 or

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 900 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 90 countries worldwide. For more than 43 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting .

All product and company names may be trademarks or registered trademarks of their respective holders.