Mideast's unified communications sector to hit $236m

The value of the Middle East's unified communications (UC) market is expected to rise from the current $169.3 million (Dh621.83m) to $235.5m by 2014 as businesses start investing in voice and video on their networks.

Unified communications involves the integration of various tools and applications used within an enterprise and with external partners for business communications. UC applications improve enterprise user productivity and enhance collaboration by integrating and converging multiple enterprise communication channels.

According to research firm Frost & Sullivan, video and web conferencing is currently used mainly by senior management. Analysts expect its usage to spread to other levels of management and suppliers are in addition optimistic about prospective increases in ICT budgets over next two years.

Today's communication landscape is marked by changing preferences, rising competition, a mobile workforce, collaboration and rising customer expectations.

Researchers have identified a need to adopt the latest technologies among Middle East enterprises, and equipment has to be compatible with other systems.

"Cost is the major factor while interest in reducing communication time was important," says the report. "With a lot of projects from Middle East companies conducted globally it was essential to invest in communication infrastructure.

"Customers also mentioned that they have remote locations, so with the kind of infrastructure build up, solutions are not available and very limited service providers are there in collaboration and communication space to choose from."

Mobility and telepresence are still used to a limited extent by organisations and therefore comprise only 10.2 per cent of the market. On the other hand, IP telephony, instant and unified messaging have seen the largest uptake at 59.18 per cent.

Michael Bernd Bayer, President of Field Operations at Avaya, a company that specialises in business communications, told Emirates Business: "Unified communications is becoming holistic as voice and video management has to be done together. An enterprise is not limited to a desktop phone as meeting rooms are being created online. This increases the relevance of mobility in a unified communications environment."

Avaya saw an uptake in demand for mobility solutions that integrated video in 2009 despite budget cuts.

"Today VPN access to the office network is available from home. Travel budget cuts are another factor behind the popularity of video. It is bandwidth-heavy but even narrowband can be used when two to four people are using a conference call facility." According to Frost & Sullivan, less than 25 per cent of an enterprise's ICT expenditure is allocated to communication and collaboration tools in the Middle East.

Anand Rangachary, Managing Director of Frost & Sullivan's South Asia and Middle East Practice, said: "With minimal impact from the economic downturn, over 50 per cent of enterprises plan to deploy UC within the next three years.

"Four out of six respondents who currently do not have any UC tools deployed said that global economic downturn has had 'some impact' on their decision to deploy communication and collaboration tools in the organisation.

"UC adoption is in its early stages compared to developed markets but there is a rising interest from enterprises in understanding the UC value proposition. There are a number of enterprises involved in pilot testing."

Analysts said greater adoption will happen in phases as no one-shot deployment of all applications will take place. Enterprises will pick applications based on business and user needs.

Rangachary said: "IP telephony combined with UC applications is the route taken by enterprises today. An example is the way IP telephony is used along with instant and unified messaging."

Bayer said there would be a change in buying attitudes among Middle East customers in 2010. "Earlier it was about purchasing innovative products but now it's all based on efficiency and RoI," he said. "The developed markets have moved to such a buying pattern and are now happening in the Middle East. The sales cycle has slowed down in the region and this will continue for some time."

Bayer said growth had slowed down at companies such as Avaya, and added: "Growth rates were at 10 to 15 per cent last year. For the past five years Avaya witnessed growth of 30 per cent in the region. This is not going to come back, but in the crisis our services proposition helped the company.

"Hardware spend was cut but customers were still spending on services. Normally planning committees within enterprises don't cut down on service offerings."

Last year saw the exit of Nortel, which was taken over by Avaya, reducing the competition for the top three of Cisco, Microsoft and Avaya.

"The acquisition is complete as the Middle East team was integrated in January 2010," said Bayer.

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