Recession Drives Cloud-based Unified Communications Services Market in Europe, States Frost & Sullivan

LONDON, February 23, 2010 - The economic downturn has had a significant impact on the enterprise
communications market in Europe. Companies have limited capital available for
investment but are, at the same time, considering unified communications (UC)
deployment as they look for ways to cut costs and increase productivity.
Recession has generated strong interest in alternative delivery methods.

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New analysis from Frost & Sullivan (www.conferencing.frost.com),
European Cloud-based Unified Communications Services Market, finds that the
market earned revenues of euro 46.9 million in 2009 and estimates this to
reach euro 1.6 billion in 2014, growing at a compound annual growth rate
(CAGR) of 79.3 per cent.

"Down economy favouring OPEX-based solutions coupled with market's need
for flexibility and focus on core competencies, all boost cloud-based UC
services adoption," notes Frost & Sullivan Research Analyst Dorota Oviedo.
"Both small businesses and large enterprises are interested in communications
delivered as a service."

In the case of small businesses, the lack of internal IT skills is a
major factor spurring uptake. The elimination of complexities resulting from
managing and integrating multiple applications and vendors, as well as
testing various UC applications is attracting enterprises.

The concept of hosted enterprise communications services was first
introduced over a decade ago. However, it has only started to gain mainstream
acceptance in recent years as modern communications have become increasingly
more sophisticated. Additionally, during the economic downturn, rising costs
and a fall in the availability of capital is favouring OPEX-based solutions.

Cloud-based services also offer businesses great level of flexibility.
Organisations can rapidly enhance or expand their ICT capacity by adding new
services without investing in the development of new skills or deploying new
hardware and software. Businesses can decide on the number of seats they need
at a given moment and the locations to which they want the capacity to be
delivered. They can scale up or down in real time. It enables them to rapidly
adapt to the sudden changes in business volumes or business strategies.

Despite the positive outlook for cloud-based UC services in Europe, the
market has several challenges to battle. These include the general preference
for customer premise equipment, low market awareness of cloud communications
services, market fragmentation and negative perceptions of security and
reliability.

"Cloud-based UC market participants claim that customer mindset is one of
the major barriers to adoption," explains Oviedo. "Reliability and security
issues are among the main customer concerns."

Service provider brand name, service level agreements (SLAs), coupled
with successful deployment references are helping win over customers.

"Eventually, the cost-effective approach of cloud services' in terms of
'pay-as-you-go' functionality should dominate the argument, especially in the
small- and medium-size business sector," concludes Oviedo.

If you are interested in more information on this study, please send an
e-mail to Joanna Lewandowska, Corporate Communications, at
joanna.lewandowska@frost.com, with your full name, company name, title,
telephone number, company e-mail address, company website, city, state and
country.

European Cloud-based Unified Communications Services Market is part of
the Conferencing & Collaboration Growth Partnership Services programme, which
also includes research in the following markets: conferencing and
collaboration, unified communications applications, business telephony,
unified messaging, mobile enterprise, and telephony endpoints. All research
services included in subscriptions provide detailed market opportunities and
industry trends that have been evaluated following extensive interviews with
market participants.

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        European Cloud-based Unified Communications Services Market
                               M4E4-64

    Contact:
    Joanna Lewandowska
    Corporate Communications - Europe
    P: +48-22-390-41-46
    E: joanna.lewandowska@frost.com

www.frost.com

Joanna Lewandowska, Corporate Communications - Europe, Frost & Sullivan, +48-22-390-41-46, joanna.lewandowska at frost.com