IP-Based Applications Services Market Opens Up Unlimited Opportunities

Part of that competition comes from within the companies you do business with. From the perspective of sophisticated enterprise customers, enhanced IP services offer a unique opportunity to limit their dependence on service providers. As data traffic has increased both in volume and importance, the IT departments within most enterprises have grown steadily over the years. More enterprises now have the ability and know-how to implement many of their own IP services, especially voice services.

For service providers to be successful in providing value-added IP services, they will have to be more nimble than their enterprise customers' IT departments. The attractiveness of IP comes from two major areas:

• Cost savings
  Carriers expect operational and infrastructure savings from deploying new IP-based services. Applications that once ran on circuit-switched networks are generally less expensive to implement on IP networks.
• Revenue generation
  Carriers are looking for new ways to enhance their service suites, which are rapidly becoming commoditized. Some view the highly personalized services enabled by IP as the ultimate "sticky" applications that will stem the tide of customer churn. Other carriers seek new, affordable service applications that will bring additional revenue streams.
• Insight believes six main enhanced services will be offered in the IP environment in the near term: audio conferencing, videoconferencing, Web/data conferencing, mobility-management services, unified messaging and instant messaging. In the past, businesses have conducted real-time collaboration primarily through audio conferencing, but video and Web/data conferencing are increasingly becoming vogue. IP-based audio, video and Web/data conferencing will continue to be driven primarily by business users. In addition, IP will provide customers with more control over their services than ever before. Mobility-management services let callers contact a person on a preferred device, and give recipients control to accept or deny a call.
• Unified messaging gives subscribers the ability to receive voicemail, e-mail and fax messages in a single mailbox, which can be accessed using multiple devices. Insight expects unified messaging to experience increasing adoption rates during the next five years, meaning more revenue for service providers.
• Instant messaging, which is rapidly becoming adopted as a real-time collaboration and productivity tool within the enterprise, is an IP-based application that enables users who are concurrently online to send messages to each other instantaneously.
• Going Forward

• The scope of potential new IP services that will provide value to businesses and consumers will be much greater in the future. For example, as wireless third-generation networks are deployed and more users embrace wireless as their primary services, much more of the total market for IP-based services will come from wireless-based IP applications services.
• Insight's research also suggests that the North American IP applications services market will grow from $696 million this year to $11.4 billion in 2007 (see "IP's Promise," left). That compounded annual growth rate of 74.9 percent is nearly eight times faster than the growth rate of telecommunications services as a whole in North America. Still, $11.4 billion represents only about 2 percent of the total telecom service-provider revenue.
• But before the promise of IP can be fully realized, continued investment in network operations will be required. For those able to stay the course, merging multiple services onto one network is the solution to the telecommunications carriers' problems and the beginning of the end of hard times in the industry.