Current telecom downturn will slow, not stall, VOIP efforts

Aug. 23, 2001
Aug. 23, 2001--"Certain types of applications that are dependent on longer term market forces associated with infrastructure development will weather the storm better than more speculative areas such as enhanced services."

According to IDC, while the current slowdown in telecommunications equipment spending will have a discernible impact on VOIP vendors, it will not stall the overall technological shift toward next-generation solutions that is currently underway.

IDC believes the current market slowdown in telecom will have a mixed effect on the market for IP telephony equipment. One reason for this is the IP telephony equipment market sprawls across many different equipment types and applications.

"Some applications associated with VOIP deployments will be much more affected than others," said Tom Valovic, director for IDC's IP Telephony program. "Certain types of applications that are dependent on longer term market forces associated with infrastructure development will weather the storm better than more speculative areas such as enhanced services."

Despite many of the doom-and-gloom reports about the dearth of venture capital funding, funding for vendors in this market space has been moving ahead significantly over the last quarter. For example, Snowshore, Rapid5, Coppercom, Vpacket and several other next-generation telecom vendors have all received new rounds of funding.

IDC's study, "The Market Slowdown in IP Telephony: Which Areas Will Be Most Affected," evaluates nine separate application segments in which revenue-producing deployments of IP telephony equipment are currently taking place. The study also provides quantitative rankings for each of the nine areas.

About IDC:

IDC delivers high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. For more information, visit www.idc.com.

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