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Chinese Unified Communications Market Shows Great Prospects: Ovum

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August 05, 2011

Chinese Unified Communications Market Shows Great Prospects: Ovum

By Rajani Baburajan, TMCnet Contributor

The implementation of unified communications applications among companies that use IP telephony is showing great prospect in China, even as IP telephony adoption has not picked momentum in the country, according to a recent report from Ovum (News - Alert).

Only 16 percent of the surveyed Chinese companies said they have already deployed IP telephony - this is the lowest adoption rate across the 12 countries surveyed.

However, amongst those companies currently using IP telephony, the use of UC applications is encouraging. According to Ovum, more than 40 percent of those enterprise users are deploying IM and PC softclients including offerings like a hosted softswitch or  IP softswitch.

“For cultural reasons, IM is considered one of the most popular and important communication approaches by enterprises in China. Chinese users prefer typing to talking at work,” said Jane Wang, senior analyst, Ovum, in a statement.

“Softphone is perceived as an affordable alternative to IP desk phones and a way to reduce telephony costs, and has attracted increasing interest from large enterprises,” Wang added.UC is facing several barriers in China. Low return on investment and the complexity of updating existing systems are the major barriers for enterprises deploying IP telephony, according to Ovum.

Besides high hardware costs, the migration costs and subsequent maintenance expenses of on-premise solutions are considered high. The price of IP desk phones hasn't declined significantly in the past few years. At present, the average price of IP desk phones in China is approximately $300.

In the wake of high prices, vendors will have to work hard to address customers' concerns and convince enterprises that IP telephony is more than just another voice solution. They need to present successful case studies with clear business gains and reduce the burden involved in migrating to and maintaining the new technology.Recently, market intelligence firm ABI Research said that unified communications, merging IP telephony, conferencing and collaboration, messaging and other forms of integrated information exchange, are on a steeply rising curve of adoption in the enterprise. According to their report, the market’s size will rise to nearly $4.2 billion in 2014.

Rajani Baburajan is a contributing editor for TMCnet. To read more of Rajani's articles, please visit her columnist page.

Edited by Stefania Viscusi

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