IDC: Unified Communications Technology Continues to Accelerate, but Service Providers Face Several Challenges

FRAMINGHAM, MA – APRIL 26, 2001 – It’s a "build, retrench, and evaluate" year for many unified communications service providers. Although IDC estimates U.S. unified communications services will grow from $400 million in 2000 to $5.5 billion in 2005, marketers face several challenges in ensuring a profitable, sustainable service offering.


"Telecommunications companies have yet to deliver on their total unified communications promise," said Mark Winther, IDC’s group vice president of Worldwide Telecommunications. "For many service providers, 2001 is a warm-up year that will not produce large-scale, significant new customer deployments or market segment adoptions. Instead, the focus will be on developing a retail marketing proposition that can stimulate sufficient acquisition of unified communications services to warrant the necessary investment and resources required to sustain this service."

According to IDC, a key adoption barrier for unified communications services is the complexity and sense of frustration consumers and business users experience at the prospect of adding a new service to integrate their existing multiple messaging systems and devices. "The industry will need to address this concern by achieving true simplification, ease of use, and compelling applications for targeted users – followed up with considerable market education activity," Winther said. Key to service provider success going forward will be market subsegment identification, management, and product packaging.

Despite the challenges, IDC believes many trends are now converging to stimulate residence and business demand for unified communications, including the dynamic growth of wireless use, the proliferation of many types of wireless devices, and the mainstreaming of PCs, modems, and Internet use.

"To take advantage of these trends, service providers should immediately begin tightening product and marketing strategies, solidifying strategic partnerships, completing the infrastructures needed to sustain and grow unified communications services, quickly penetrating the small and medium-sized business segment, and developing packaging and bundling strategies to increase the overall value-proposition perception among unified communications customers and gain long-term loyalty," Winther advised.

IDC’s recently published report Unified Communications: Market Forecast and Analysis, 2000-2005 (IDC #B24224) identifies the current dynamics driving the U.S. unified communications services market. It also examines market development expectations for 2001. Data regarding unified communications subscribers and subscriber revenues is provided through 2005. Key participants and trends in the retail marketing of unified communications services are identified. To purchase this report, contact Bruce Atlas at 1-800-343-4952, extension 4053, or at

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 700 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at

IDC is a division of IDG, the world's leading IT media, research and exposition company.


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