Hosted comms market lacks coherent distribution model

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Hosted comms market lacks coherent distribution model

Alex Scroxton

The revenue share of hosted communications servcies will soon be nipping at the heels of the on-premise model when it comes to enterprise comms deployments, according to new research from analysts at Frost and Sullivan, but lacks a coherent channel model.

Frost & Sullivan industry analyst Dorota Oviedo warned that the hosted market was still highly fragmented, with most major comms providers and networking vendors eyeing the space.

Building a distribution channel would be a key challenge for the sector, added Oviedo.

"Channel partners need to be educated on the benefits of predictable revenues based on recurring monthly revenues and commissions, which are less sensitive to the general economic fluctuations and will increase as hosted services gain traction," she said.

Comstor worldwide president Jon Pritchard backed up these findings, discussing the recent addition of WebEx collaboration technology to Cisco's channel price list.

Pritchard said that the addition of WebEx to Cisco's channel play was "long overdue" but added: "The challenge for Cisco was that it was a very different model, and they had to work out how to sell something like this in terms of compensation and billing."

While the on-premise model, which still offers significant advantages in terms of control and security, will continue to dominate the enterprise market in the immediate future, the hosted option is nevertheless becoming steadily more popular.

In its Hosted IP Telephony and UC Services Market report, Frost & Sullivan claimed that the European market was worth €900m (£781.8m) in 2010 and will hit €4.6bn five years from now.

Oviedo said that the economic slowdown and subsequent limited capital for investments had already driven some enterprises down the hosted route, and added that this trend towards OPEX-based solutions would continue in spite of the recovery.


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