SOURCE: Wainhouse

December 18, 2008 07:00 ET

Telephony Market to Crimp Unified Communications Market Growth

300% Growth in Video Revenues Cannot Cover Telephony Shortfall

DUXBURY, MA--(Marketwire - December 18, 2008) - While Unified Communications (UC) has become a high tech marketing buzzword and the focus of major enterprise vendors including Avaya, Cisco, IBM Lotus, Microsoft, and Nortel, a new study released by Wainhouse Research concludes that UC product revenues will actually decrease by over $1B over the next two years before the market rebounds. According to the study, the drop in telephony revenues, currently the largest portion of the UC market, will not be matched by growth in other areas such as IM, presence and videoconferencing.

The study forecasts that total UC product revenues will decline until 2011 due to the falling average selling price of telephony, audio bridges and unified messaging. Enterprise video, coming on particularly strong with a compound growth rate of over 20%, will more than make up for telephony decreases by 2012 and beyond. IM/presence servers and team workspaces will also fuel a growing market, ultimately offsetting early declines and give the entire UC products market a significant total revenue increase near the end of the forecast period. When all the UC components and dynamics are included, the market is forecast to grow from $15.4B in 2007 though a low point in 2011 to $16.3B in 2013.

According to E. Brent Kelly, Senior Analyst at Wainhouse Research, "The unified communications market is moving slowly while many end users are still trying to understand the ROI. Traditional telephony vendors will see competition from Microsoft's OCS initiatives while still partnering with Microsoft and IBM in many cases and competing with Cisco. However, those UC vendors with compelling video offerings are going to see significant growth."

The "Worldwide Unified Communications Product Forecast" is currently available by contacting Client Services Manager Sara Fargo at or +1 781 934 6165. The Executive Summary and Table of Contents for this study and others are also available at

Wainhouse Research provides insight and intelligence into the global markets for audio, web (data), and video conferencing, real-time Unified Communications, enterprise streaming and webcasting, and enterprise social networking. The company publishes public and private studies, speaks at industry events and private company events, and provides strategic consulting to both industry vendors and end user organizations. Wainhouse Research conferences in the US and Europe provide a forum for the industry to discuss critical issues for industry growth. For more information please visit

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