2000 Players Have Less Than 40% of Market

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

2000 Players Have Less Than 40% of Market

There are approximately 2000 Hosted VoIP providers in the US. According to market research from Edgewater, "The majority of SMBs have not yet migrated to IP Communications. While adoption rates are higher in larger organizations, as high as 36%, adoption for smaller SMBs (< 100 employees) is less than 25%."

Vonage says only 15% of the SMB market has been penetrated by UCaaS. I will try to shy away from saying that maybe the majority of small business doesn't have a use for UCaaS. Under 10 employees may not have much use for it. In my experience, under 10 lines and the small business isn't looking for big changes -- just replacement voice.

Vonage's Masarek continues, "UCaaS today is only a 15 percent penetrated market so the sale that a cloud PBX provider makes is I am offering you no hardware, lower operating cost and infinite scalability." And that probably works for companies with more than 50 employees. 50-99 is the sweet spot. 20-49 is a segment that will lean towards replacement services -- cheap voice, if you will. And businesses with 100-499 employees are the white elephants.

Simultaneously, AT&T, CenturyLink and Verizon are forcing SMB off copper to fiber. Some of that is just SIP trunks over DIA -- primarily, OTT SIP. Studies indicate that many SMB are still on copper facilities. There is a lot left to transfer to all-IP.

Fierce reports that "CLECs and their small to medium business (SMB) customers are concerned whether ILECs will provide equivalently priced access to IP services. Also, will they provide enough notice when they want to retire copper?"

So despite 2000 Hosted VoIP providers plying their trade in the US since 2003, the penetration is somewhere between 7-36% depending on the size of the business. Good Job!!!!

There is a lot of heavy lifting left to do.

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