We are in Uncharted Territory, But Get Ready for Change

This graph shows U.S. job losses from the start of the recent recession, in percentage terms. As you can see at a glance, the recession has been an outlyer. Click chart for a larger view.

As they say, "we are in uncharted territory." I use the past tense deliberately, meaning only that by most measures, we passed through the bottom as early as March 2009 and are now, in halting fits and starts, in a growth mode.

So it might be time to stop talking about "recession-induced" behavior, even though we are, by the most recent estimate, down about 8.1 million jobs since the recession began. All other things being equal, it makes most sense to look for signs of changing behavior as the recovery takes hold, as slow as that might be.

As Canadian hockey great Wayne Gretzky once quipped, you don't skate to where the puck is now; you skate to where the puck is going to be. The adage, as it applies to most providers of goods and services, is to anticipate rebuilding, rather than extrapolating from recession behavior permanently into the future.

The main thing now, despite the severity of the downturn, is how behavior will start changing. It is as important to anticipate what people will do, instead of gearing one's business to "how they have been recently behaving."

The reason is simple: by definition, the economic background is changing, meaning people will start to have opportunities to change recent behaviors. As the economy recovers, new discretionary spending is going to build. It will be spent somewhere. So the issue is anticipating how, and skating to the puck.

Has Hosted PBX Business Finally Hit an Inflection Point?

The global voice over IP (VoIP) service market totaled $73 billion in 2015, a five percent increase over 2014 levels.

That figure includes the value of consumer services--about 62 percent of total revenues at $45.3 billion--and business buying of managed phone services, hosted equivalents, SIP trunking services and unified communications services and software, according to IHS Technology estimates.

“The competitive landscape has become highly fragmented for VoIP business services, with an increasing number of PBX and unified communications (UC) vendors, enterprise agents and resellers expanding into the market along with traditional service providers,” said Diane Myers, senior research director, VoIP, UC and IMS, IHS Technology.

Of the roughly $27.7 billion in business IP telephony spending, about $9 billion is generated by purchases of SIP trunking services (access).

Managed IP PBX services amounted to about $10 billion globally, while another $9 billion worth of hosted PBX services are sold as well.

Roughly 10 to 20 percent of new IP PBX lines sold are part of a managed service or outsourced contract depending on region, Myers said. Annual sales of business phone systems might have amounted to $6.4 billion in 2015, extrapolating from second quarter 2015 sales estimates.

As a result, managed IP PBX services, including private cloud services, are expected to comprise the largest segment of business VoIP services over the next several years.

There were 230 million residential VoIP subscribers worldwide in 2015, an increase of 3 percent from 2014

In 2015, unified communications-as-a-service (UCaaS) revenue grew six percent over the prior year and seats sold grew 25 percent.

What Works Better for Marketing Campaigns: Twitter or Facebook?

After studying Twitter and Facebook as business marketing vehicles, Irbtrax says "Twitter performed better in the general business to business marketing category due to its viral marketing benefits."

But Facebook performed better in the business to business marketing category for select companies that are 'personalities'. In other words, "hot" products or services with high user inmvolvement can use Facebook in ways that other firms cannot. That also means Facebook likely is better for consumer products.

The study concluded that it is not even necessary to have a large group of Twitter followers to benefit from Twitter's viral marketing advantages. Twitter also might be better for real-time promotions, events, special offers or location-based offers, the study suggests.

The study concludes that both work, and that it is best to create a presence on both. But extrapolating from the findings, one might argue that a business-to-business campaign is better suited to Twitter, while consumer products might fare better on Facebook. That especialy would be true for products without a high degree of personal and emotional involvement.

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What Will Enterprises Buy in 2010?

It always is dangerous to make predications about what enterprises will do when extrapolating from what they did last year, and what executives say they will do in the coming year, and doubling difficult at transition points, which is where enterprise IT managers likely will find themselves in early 2010.

As IT spending clearly was under pressure in 2009,. the issue is how much growth will happen in 2010 as postponed projects must be started, and how much top-line revenue growth enterprises actually can eke out, since it is hard to see a sustained increase in IT spending without top-line revenue growth. Up to this point in 2009, profitability increases at most enterprises have come because of cost cutting, not revenue growth, and that cannot continue indefinitely.

Investments for cost cutting for that reason appear to have been a big priority for enterprises in 2009. About 24 percent of those polled say cutting telecom and network costs were a critical priority, and 48 percent say  it was a high priority.

But some underlying trends likely will re-emerge in 2010. Data center consolidation has been a high priority for cost and disaster recovery reasons, with 24 percent of respondents. saying that is a “critical” priority and 43 percent saying it is a “high” priority.

About 40 percent of enterprise executives say mobility, collaboration and voice over IP continue to be high or critical priorities.

Desktop IP telephony migration continues, while other VoIP technologies of high interest also will get attention. Some 34 percent of enterprises say they already have implemented or are implementing desktop VoIP, and an additional 14 percent are expanding or upgrading their VoIP environment.

IP conferencing, including Web, video, and audio, while not yet implemented widely, have high interest as well. 

Cost savings, faster communication, and decision speed are values that drive UC adoption, says Ellen Daley, Forrester Research analyst. UC adoption continues to see traction, as well. About 21 percent of firms report that they are already, or are currently implementing, a UC solution, while nine percent are expanding or upgrading their current UC solution.

About 15 percent say they are piloting one. An additional 39 percent of firms are interested in or are considering UC solutions.

The top motivation for adopting UC is cost savings, followed by increasing communication between users. It appears enterprise executives are more comfortable with UC as well.

Some 51 percent of executives say they understand how UC will affect the way their companies do business. Still, about 32 percent of respondents say they still have some questions about UC value.

Integrated voice, email, and instant messaging top the list of the most desired features for UC.

Web conferencing and audio- and videoconferencing capability come in second while presence, allowing others to see coworkers’ status, comes in third.

Almost half of enterprises buy managed services, and though cost savings are a factor, freeing up time to focus on core business issues has grown as a driver of perceived value.

About 62 percent of respondents say that they have already purchased or are interested in purchasing managed or outsourced telecommunication services.

Unlike in past years, the top reason isn’t cost savings, although it is still high on the list. Instead, firms are opting for managed services to enable them to focus on their core business competencies.  

Telecom and network buyers are also interested in managed services beyond physical networks and telecom services like multiprotocol label switching. Web conferencing and or collaboration are the most popular managed services among respondents.

About 52 percent of those polled say they are very or somewhat interested in the technology.

Firms also are interested in network-based security services (46 percent), storage and backup services (44 percent) and data center services (43 percent).

About 51 percent are using IP technologies for contact centers. About eight percent are piloting IP contact center implementations, 31 percent are implementing now and

12 percent say they are upgrading or expanding their existing IP contact center capabilities.

So far, though, enterprise executives have lukewarm interest in hosted contact center solutions, Daley says.

Close to half of firms (49 percent) expect their overall number of contact center seats to remain about the same over the next year, with similar portions either increasing (23 percent) or decreasing (24 percent) seats.

Outsourcing of contact center seats is a different matter, though, says Daley. About 30 percent of firms report planning to outsource more of their contact center seats, while 51 percent of firms anticipate no change.

Both MPLS and Ethernet wide area networks are popular. About 36 percent of those polled say they already have completed their firm’s migration to MPLS. Ethernet adoption is which is growing fast as well, but has not yet reached use of MPLS, Daley says.

Managed MPLS is also popular, with 30 percent of firms already using it, and 22 percent of firms using managed Ethernet service.

Cost is the most important criterion when choosing landline data service providers, respondents say. About 60 percent of buyers say that is a very important consideration.

Service level agreements are important to 49 percent of respondents. Vendor pricing models, especially clarity on service elements and options, are very important to 43 percent of buyers.

Nearly 65 percent of respondents say they have, or are implementing, wireless local area

networks. And while SMB respondents generally are not that interested in public data networking, enterprise executives are much more interested both in fixed WiMAX (23 percent) and mobile WiMAX (25 percent) of respondents.

The majority of respondents have deployed wireless email or BlackBerry applications. Customer-facing applications dominate, though there is interest in line-of-business apps as well, though little buying as of yet, says Daley.

The majority of enterprises buy vendors’ mobile versions of existing packaged applications (41 percent), but a large portion also are developed in-house (35 percent) or are custom-built by third parties (33 percent).

Cost is the most important criterion (68 percent) for choosing a mobile network service provider, followed by domestic coverage (56 percent).