Forrester claims downturn in UC


The economic climate will cause a 5-10 per cent slowdown in spending on unified communications solutions, according to a new report by technology research firm Forrester. The 2009 Outlook for Unified Communications In Europe report found economic constraints are squeezing budgets, although certain businesses continue to withstand the downturn.

“It’s a mixed message picture,” said Forrester principal analyst Phil Sayer (pictured). “In some sectors money is so tight they have to cut back, while others are saying it’s so important they have to carry on to get the cost savings.

“Overall spend is going to be down, but it’s not going to be the end of unified communications; it’s just a question of the speed at which it will be implemented as some companies may sit on their hands for a year or three.”

Unified comms providers  however challenged the view, reporting a shift down in unit in sales but an overall increase in spending as companies look to improve efficiency and make cost savings in difficult times.

“On the whole I’ve not seen a slowdown in sales at the moment,” said Fused Group chief operating officer Mark Salvin. “Some sectors like manufacturing can’t spend but others are looking at their strategies and trying to improve their efficiencies. We’ve seen a slowdown in broadband sales but not in other products.”

Software and service providers reported an increase in spend as fewer companies invest in expensive infrastructure in an attempt to cut costs.

“Customers are looking for  ways to reduce outlay on hardware such as PBXs,” said Genesis product marketing director Mark Seeman. “There has been a downturn in PBX sales but if anything the downturn is helping us as more people want software and services to increase efficiency and reduce infrastructure costs.”

Service provider Gamma also said it has seen minimal reduction in spend although it admitted growth has slowed and complex solutions tying together various telecom products may have suffered in the downturn.

“Traditional voice revenues in fixed and mobile haven’t dropped and we haven’t seen a reduction in spend,” said Gamma marketing director Richard Bligh. “Fixed and mobile revenues are either flat or increasing but complex products may have slowed as the market has lost some appetite for that kind of product but traditional usage has not dropped.”

Timico chief executive Chris Tombs argued: “IP telephony is clearly an in vogue opportunity for dealers to broker new revenue streams, and is definitely an area that is growing. But parts of the convergence sale are certainly hard won – because it means breaking into a customer’s telephony collaboration plan and is part of a much longer cycle than simply selling them mobile phones. It requires dealers getting involved in companies’ business strategies.

“But there is certainly a great appetite for asset-light solutions. Businesses are prepared to commit operational expenditure now, rather than capital expenditure to telecoms solutions – it can be the difference between a £25,000 upfront investment and a £10 monthly subscription for a hosted PBX. There is also tremendous opportunity in SIP Trunks offering IP telephony. There must be million of old ISDN 30s out there that can and will be replaced by SIP Trunks.”

Sectors such as banking and car manufacturing have been hardest hit. Other sectors such as the legal profession and service organisations have pushed ahead with plans in an attempt to reduce overheads.

The Forrester study interviewed five vendors, two providers and one integrator, and projected the unified communications market would be worth $1.3 billion in 2009 and top $6.5 billion by 2015, up from $792 (£539) million in 2008, even if the rate of growth slows short term.