Cloud based Unified Communication services are forecast to grow by nearly 80% annually across Europe for the next four years as businesses look to alternative delivery models that require a lower upfront cash investment.
The market in the region was worth €46.9m in 2009 according to analyst Frost and Sullivan but given the maturation of the technology and interest generated by the recession it is expected to reach €1.6bn in 2014, representing compound annual growth rates of 79.3%
"Down economy favouring OPEX-based solutions coupled with the market's need for flexibility and focus on core competencies, all boost cloud-based UC services adoption," said Dorota Oviedo, analyst at Frost and Sullivan.
A lack of available capital is also pushing firms towards as-a-service delivery models, as is the flexibility to scale an infrastructure up or down on demand, the analyst added.
However the technology still faces its fair shre of challenges including customers' continued reluctance to outsource UC services, low awareness of cloud services, market fragmentation and perceived issues involving security and reliability.
"Cloud-based UC market participants claim that customer mindset is one of the major barriers to adoption...reliability and security issues are among the main customer concerns," said Oviedo.
"Eventually the cost effective approach of cloud services in terms of pay-as-you-go functionality should dominate the argument, especially in the small and medium-sized business sector," she added.