IDC Expects the Growth in Asia/Pacific Unified Communications On-Premise Infrastructure Market to Slow Down Due to Shifts to Cloud-based Models and Smaller Form Factor Endpoints

idcSingapore and Hong Kong, October 9, 2014 – IDC finds the Asia/Pacific excluding Japan (APeJ) Unified Communications (UC) On-Premise Infrastructure market grew 1% year-on-year (YoY) in the first half of 2014. The market is expected to grow to US$3.9 billion in 2018, at a five-year compound annual growth rate (CAGR) of 4.2% based on factory/ vendor revenues.


The PRC continues to be the largest market, followed by Australia, Korea and India respectively. While larger markets such as Australia and the PRC have slowed down on YoY basis in 1H 2014, absolute revenue continues to be significant. From a revenue perspective, there are signs of continued slow-down in on-premise hardware. This is because enterprises continue to have more confidence in cloud solutions and/or deploy smaller form factor endpoints to complement their existing communication investments. Both trends are also driving down equipment prices.


From an enterprise perspective, Cloud-based UC are proving to be more compelling for many organizations given its flexibility, scale and pay-as-you-go pricing. A number of telecom providers and equipment vendors are capturing this shift through their own offerings. This includes Cisco-Telstra, Avaya-BT, Avaya-HP offerings. Videoconferencing as a Service (VCaaS) and Contact Center as a Service (CCaaS) solutions are also gaining traction. Key examples are BlueJeans and Interactive Intelligence respectively. Adoption for cloud-based UC solutions will continue to be the strongest in Australia, Korea, India and Singapore.


IDC believes that on-premise UC deployment will co-exist with off-premise solutions at least for the next couple of years, creating a hybrid environment both in local and global contexts. There will be greater choice of solutions and flexibility for enterprises as service providers innovate and add capabilities and products that are relevant to the customer’s business requirements rapidly.


“There are also adoption shifts happening within major industry verticals. While cloud-based UC adoption continues to grow the fastest in retail, education, health care, hospitality and professional services, a number of other large industry verticals continue to prefer premise-based solutions. This includes finance, manufacturing, government and telecoms. It is imperative for service providers to understand where to pick their battles,” says Ryan Tay, Senior Research Manager for Telecoms and Unified Communications, IDC Asia/Pacific. “On top of that, they will also need to have strong professional services capabilities as most environments will need to integrate into legacy systems.”


IDC Asia/Pacific Semiannual UC, Collaboration and Video Tracker provides the market size and vendor share for enterprise telephony, videoconferencing, contact center and collaboration application products on a semiannual basis.

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