Hosted UC On Track to $1B by 2011, Study Shows

Hosted unified communications is a nascent opportunity at the cusp of becoming a big business, according to new data from Wainhouse Research released this week.

While Wainhouse Research estimates the current market for hosted UC, or UC as a service (UCaaS), to be less than $200 million, it forecasts this sector will grow over the next five years, becoming a $1 billion business by the end of 2011 and a $5 billion business by the end of the 2014.

The analysis also includes a comparison of the total cost of ownership of a hosted UC solution to a premises-based UC solution over a three-year operating period.

“The case for hosted UC is clearly not for lower cost alone,” said Brent Kelly, senior analysts and partner for Wainhouse Research. “Enterprises adopting hosted UC solutions are doing so for a number of reasons, many of which are less tangible. Our TCO analysis shows UCaaS may or may not save a company money versus a premises-based solution. Yet the overall value proposition, including cost, is proving compelling for many small and large companies.”

The report reviews 16 hosted UC solutions from hosted messaging providers, hosted VoIP vendors, carriers and major premises-based UC providers that recently have launched hosted UC services offerings. While each vendor has its own value proposition, the cost comparison between hosted and premises-based solutions is not always clear differentiator, Wainhouse Research reported.

All of the vendors with established UCaaS offerings are reporting double-digit growth and significant interest in the verticals they target, the research firm reported.

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