While Broadvox and other ITSPs have continued to see very good growth in the adoption of SIP Trunking and VoIP, hardware providers are finding similar growth elusive. Additionally, the hosted community is experiencing both growth and an expansion of their market. While a hosted solution has always been of interest to small businesses, medium size businesses and enterprises are beginning to investigate including it into an overall IP communication strategy. So then, what is holding up the growth on the hardware side of things? It is partly due to how the products are positioned but is certainly tied to the current economic environment.
Obviously, the business community sees the savings and understands some or most of the feature/function benefits of transitioning to VoIP/SIP Trunking. I also know certain factors such as educating decision makers on the technology and attacking the ever-present FUD are necessary. However, clearly articulated value propositions and cleverly targeted marketing campaigns should be able to overcome these barriers and objections.
Just a few short years ago, IP PBX sales were forecasted to hit $8.9 billion in 2010 by Info Tech. Just last week Global Industry Analysts, Inc. forecasted the market to reach $9.05 billion by 2015. This represents a huge negative change in the adoption rate. I believe the forecasted reduction is reflecting the pessimism that has infected the entire industrialized world (China may be the only exception). Consumer confidence in the US regarding our current situation sits at an all time low of around 20. This compares with a pre 9/11 reading of 170 and a post 9/11 high of around 140 (Market Harmonics).
With regard to expectations, confidence has jump since the change in administrations but has reached a nervous plateau.
All businesses are impacted when the buying community becomes pessimistic.
The real difference between the services that the ITSPs and hosted providers deliver and the products of the OEM suppliers may rest with the amount of capital and risk associated with a hardware purchase. Customers may purchase a Broadvox service on a month-to-month basis with no contractual commitment (not our desired way to sell, but available). OEMs do not and cannot offer a similar arrangement. Therefore, the commitment level of the buyer must be greater in acquiring hardware than that required to purchase a service.
Decades ago, I would debate a good friend of mine, an economist and accountant, about what drives consumer confidence. He always reminded me it was not about facts as much as it was about language. We may not be able to change the world but speaking positively about the future, but it is one small step we can independently take.
See you on Monday...