Frost: Growth of IP Telephony, Changing Workforce Drives North American Softphone Markets
July 2, 2008 // Published as a news service by IHS
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The North American softphone markets continue to exhibit strong growth, according to Frost & Sullivan, thanks largely to the wider adoption of Internet protocol (IP) telephony, the emergence of true unified communications (UC) applications and the changing nature of work structure.
Analysts said enterprise softphone applications are being increasingly recognized as the default extensions of IP desktop phones in corporate networks and are becoming an important part of IP telephony providers' strategic offerings.
Recent analysis from Frost & Sullivan of the North American enterprise softphone markets found earned revenues of $18.9 million in 2007, with estimates to reach $135.1 million in 2014.
New technologies and new demands have combined to create a workforce that is highly independent from the workplace itself, analysts said, as workers are no longer tied to a physical desk in a physical office.
Softphones and software graphical user interfaces (GUIs) that integrate different types of communications into a single interface are becoming the primary tools to enhance the effectiveness of communications for an increasing number of telecommuters, mobile workers and traveling professionals.
The nomadic capabilities of a softphone allow it to be plugged into any available broadband connection to reroute calls to any given location, analysts said.
"The increased implementation of integrated UC clients is likely to contribute toward the demand for click-to-call graphical interfaces as softphones seem to be the natural transition to more sophisticated UC solutions," said Frost & Sullivan research analyst Alaa Saayed. "Since the majority of the IP telephony solution vendors are building strong cases around UC, soft clients may also receive a boost along the way."
Misconceptions regarding the security and call quality of IP-based telephony are still a major challenge for softphone providers, analysts said. Downward pricing pressure due to increased competition and interoperability issues related to endpoints and systems are also major challenges.
"A significant issue to be addressed by softphone vendors in general is the popularity of desk phones and the hard sell of a softphone in terms of perceived benefits and potential usage," said Saayed. "Customers still believe that the reliability of voice over IP [VoIP] is not as good as the reliability of voice communication over public switched telephone network (PSTN)."
In response to security concerns, softphone vendors provide tools such as client authentication, advanced encryption standards (AES) and secure real-time transport protocol (SRTP). Analysts said the quality of VoIP is also being handled by the implementation of standards such as jitter buffering, acoustic echo cancellation and Institute of Electrical and Electronics Engineers (IEEE) 802.1p and 802.1q standards.
Analysts said mobility, cost-effectiveness and access to a broader spectrum of features, including UC applications, are the main areas that softphone vendors focus on in order to sell their solutions.
Source: Frost & Sullivan.