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 Back to 2005 Press Releases
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Gartner Says IP Centrex Services to Serve 6 Million North American Phone Lines by 2009 |
STAMFORD, Conn., August 31, 2005 — IP Centrex, though currently a relatively small market, is emerging as the fastest growing voice service in North America, according to Gartner, Inc. The service will grow in triple digits from serving more than 300,000 lines at the end of 2005 to 6 million lines by the end of 2009.
Led by AT&T's May announcement that it will offer IP Centrex, major North American carriers who haven't already launched the service will do so through late 2005 and early 2006, adding momentum to this market.
Major drivers will include growing acceptance of IP voice; the service's typically simple, modest, predictable cost; business customer motivation to avoid up-front capital expense and ongoing internal staff requirements of technology adoption; and, in the longer run (from approximately 2007), efforts by incumbent carriers to push legacy Centrex customers toward IP-based alternatives.
While the widest deployment of IP telephony in North America is through customer IP customer premises equipment (CPE) deployed on a "do-it-yourself" basis in enterprise networks, carriers are rapidly broadening their service offerings. The entrance of more large carriers, including Sprint and Verizon by early next year, will drive the market faster.
"IP Centrex can offer most of the advantages of IP-PBX without up-front capital investment and often with fewer ongoing operational headaches than when internal staff take responsibility for maintaining the new IP voice infrastructure," said Steve Koppman, principal analyst in Gartner's communications group.
Though most adoption currently in this fragmented market has been by smaller businesses with fewer than 200 lines, AT&T's entry with a more up-market focus will increase adoption by enterprise customers, prominently including those now using legacy Centrex, and smaller branch locations.
"IP Centrex's ability to support customized applications will grow significantly over the next five years, strengthening its attractiveness to larger customers," Mr. Koppman said. "This will help IP Centrex services in the long run to take a larger share of the business market than legacy Centrex has vis-à-vis customer premise equipment."
While the term IP Centrex is widely used in the industry, providers often avoid it due to fears of negative perceptions about legacy Centrex. The service refers to IP-based, provider-hosted network service with both the basic features of legacy Centrex and significant additional functionality based on IP.
Most of the new services offer both cost savings and the advantages of such IP voice features as unified messaging including visual voice mail, Outlook integration with "click to dial" functionality, "instant" conferencing, presence management and advanced find-me/follow-me.
"But customers generally are attracted to the service more to contain costs and combine networks than for new features," Mr. Koppman said.
Some carriers that have already widely deployed IP Centrex services include MCI, Covad, SBC and Qwest, as well as competitive local exchange carriers (CLECs) such as ICG and a slew of smaller providers, often localized in particular markets, such as M5 in Manhattan. However, no provider has sold much more than 30,000 lines at this time.
"The keys to successfully marketing IP Centrex services will be to demonstrate IP voice's potentials before they are widely experienced, while helping business customers better understand the often underestimated costs of maintaining their own equipment," Mr. Koppman said.
Carrier marketing of the service will benefit from a single uniform price per station, ability to seamlessly shift between wireline and wireless, and letting customers keep their legacy phones, allowing the purchase experience to be relatively free of up-front costs.
Additional analysis including market projections are available in the Gartner Dataquest report, Market Focus: Emergent IP Centrex: North America which analyzes these full-featured IP voice services. The report is available on Gartner's Web site.
This research is produced by Gartner's worldwide communications group. This group provides analysis for the full spectrum of communications and networking issues. Additional information is available at www.gartner.com/it/products/
research/markets/markets.jsp#Communications.
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About Gartner:
Gartner, Inc. is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 10,000 clients, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company's businesses consist of Research and Events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customized engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has over 3,900 associates, including more than 1,100 research analysts and consultants, in more than 75 locations worldwide. For more information,
visit www.gartner.com.
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