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February 22, 2010

European cloud-based UC services market to reach €1.6bn in 2014, says Frost & Sullivan

Recession pushes UC adoption among organisations

By CBR Staff Writer

Economic downturn has had a significant impact on the enterprise communications market in Europe and companies are considering unified communications (UC) deployment to cut costs and increase productivity, according to a new analysis from Frost & Sullivan.

The European cloud-based UC services market earned revenues of €46.9m in 2009 and estimates this to reach €1.6bn in 2014, increasing at a compound annual growth rate (CAGR) of 79.3%.

Dorota Oviedo, research analyst at Frost & Sullivan, said: Down economy favouring OPEX-based solutions coupled with market’s need for flexibility and focus on core competencies, all boost cloud-based UC services adoption. Both small businesses and large enterprises are interested in communications delivered as a service.

The firm said that the lack of internal IT skills is a major factor increasing uptake in the case of small businesses. The elimination of complexities resulting from managing and integrating multiple applications and vendors, as well as testing various UC applications is attracting enterprises.

According to Frost & Sullivan, despite the positive outlook for cloud-based UC services in Europe, the market has several challenges to battle such as the general preference for customer premise equipment, low market awareness of cloud communications services, market fragmentation and negative perceptions of security and reliability.

Oviedo, added: 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.

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-size business sector.”

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