IP telephony gaining acceptance, according to Sage

Sept. 20, 2001
September 20, 2001 IP telephony appears to be on the verge of a breakthrough, according to a new study published by Sage Research Inc.

September 20, 2001 IP telephony appears to be on the verge of a breakthrough, according to a new study published by Sage Research Inc. (www.sageresearch.com), although significant risk factors to its deployment still exist. In the 65-page study entitled "Opportunities in IP Telephony: A Market Analysis," Sage states that the vast majority (86%) of US organizations surveyed report they are in various stages of evaluating or deploying IP telephony, revealing a strong interest in the technology. The study also highlights, however, a number of factors that could deter these organizations from deploying IP telephony, including perceptions that the technology lacks maturity and skepticism about the level of cost savings that can be realized.

"We've all heard the rosy forecasts for IP telephony," notes Kathryn Korostoff, Sage's President. "Sage designed this study to measure actual deployment plans to get a realistic, conservative measure of organizations' plans to use IP telephony. While these results indicate a significant near-term opportunity, the research also identifies some risk factors. These will need to be addressed by suppliers if customer plans are to be fully realized."

The report identifies a significant challenge for IP telephony equipment vendors: organizations tend to keep their PBXs well after they have been depreciated. In fact, more than half of the organizations surveyed have equipment that is at least five years old, and thus is likely depreciated. This challenges the widely held assumption that demand for IP PBXs will occur when legacy equipment is depreciated—clearly, additional benefits must be realized to compel customers to migrate to IP PBXs.

Another risk factor is that existing PBXs are underutilized. Nearly half of the organizations report that they have significantly fewer telephones connected to their PBXs than the equipment accommodates. Surprisingly, this overcapacity is independent of the age of the equipment.

The research also addresses the "lease vs. buy" decision organizations face in deciding on IP Centrex vs. IP PBX. "IP telephony will allow carriers to overcome the traditional limitations of Centrex," notes Korostoff. "While the availability of IP Centrex services is limited, our research indicates that customer awareness of and favorability towards these services are growing." The study also analyzes key selection criteria used by organizations purchasing IP PBXs.

For the study, telecommunications professionals from 157 US organizations were surveyed regarding their current and future use of IP telephony. These professionals primarily represent organizations spending more than $5,000 per month on telecommunications services.

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