Studies predict surge in unified messaging usage
The research companies IDC and Ovum have released data on the adoption of UM (unified messaging), both indicating that UM systems, which provide employees with one "mailbox" for all business-related communications, will become much more broadly adopted in the near future.
UM systems are appealing to companies because they promise to increase worker productivity by making it easier for them to manage, review, and respond to voice, e-mail, short messages, and fax communications using whatever device the employees choose: PC, telephone, mobile phone, or handheld computer.
According to the IDC study, the number of UM mailboxes bought by companies worldwide will increase from an estimated 1 million in 1999 to more than 38 million in 2004. The Ovum study measured free UM services for U.S.-based users, reporting that the number of free subscriptions is already 24 million. This is expected to grow to 34 million by 2002, but the proportion of free subscriptions in the overall market is expected to decline, Ovum's report said.
The IDC report, "Turning the Corner: Unified Messaging Applications Market Forecast and Analysis, 2000-2004," examined the market for UM applications sold for business usage. It said the recent success of hosted UM applications, the growth of IP-based PBXes, and improvements to reliability and scalability have fueled worldwide UM spending and mailbox growth. Vendor revenue in this market is expected to jump from $132 million in 1999 to $1.7 billion in 2004.
Several trends, including an increasingly mobile workforce and standards-based applications, will continue to drive the UM marketplace, Robert Mahowald, senior analyst for collaborative computing program at IDC, based in Framingham, Mass., said Tuesday. More companies are going to use service providers rather than develop their systems in-house. That trend is driving companies that have developed their own UM systems to outsource their software, Mahowald said.
Improved UM products also have enticed a growing number of service providers into the game. Although demand for enterprise UM applications will outpace hosted UM applications in the near term, IDC predicted hosted applications will be the leading worldwide segment in 2004, with 22 million mailboxes and nearly $1 billion in revenue.
The Ovum report, "Next-Generation Messaging: Unified Communications and ASP Strategies," issued Thursday and authored by John Delaney, senior analyst at Ovum in London, said it will become more and more difficult for all but the largest portals offering free UM services to run a viable UM business. In addition, as UM services become an indispensable working tool, the free services are likely to fall short of workers' needs and expectations, the Ovum report said.
Consequently, subscriptions to free services are expected to decline steadily as a proportion of total subscriptions, Delaney said in an interview Wednesday. Ovum noted that service providers currently can tap into two fast-growing sources of UM revenue: service subscription fees and fees from the increased usage of other network services such as voice mail access.
But Delaney cautioned that although reasons for offering such services are compelling, the current market is very complex and very confusing with a lot of different factors affecting it.
Nevertheless Ovum, its North American office in Boston, forecasted worldwide UM service revenue to reach $31 billion by 2007. Of the total revenue forecast, almost $13 billion will come directly from service subscription fees, $16.5 billion from increased usage of other revenue-generating network services, and $1.6 billion will be attributed to advertisers. Ovum's report also said there will be about 218 million active users, including about one quarter subscribing to free services, by 2007, up from a total free and fee-based subscribers of 5.5 million in 2001.