VoIP, MPLS boost telecom spending

VoIP, MPLS and mobility will make up a good portion of telecom budgets this year, and that trend is expected to continue, according to a Forrester Research survey.

Telecom decision makers in North American companies and small and midsized business (SMBs) say that gaining control over their wireless environments is their highest telecom priority, according to a recent Forrester Research survey.

The survey found that more than 1,500 respondents ranked setting wireless policy and centralizing management of mobile devices as the top two telecom initiatives for 2006.

This year, SMBs plan to spend about one-third more than they did last year on both mobile voice and mobile data services. Meanwhile, 56% of enterprises expect their mobile voice spending to increase, and 63% are planning for a boost in mobile data spending.

That increase will result in a marked decrease in landline services. Landline spending is the only area expected to decrease, according to the survey, as firms continue to move legacy voice traffic and spend more on VoIP and wireless.

"In general, many of the spending initiatives and adoption patterns were similar across a variety of company sizes, with mobility, security, MPLS and VoIP all capturing mindshare," the survey states.

Of all industries, companies in business services and manufacturing will increase VoIP spending the most this year, with 54% and 51%, respectively.
Forrester Research Survey,
The survey found that the use of mobility will soar, with companies of all sizes spending about a quarter of their telecom budgets on wireless services. The survey indicates that this number will see continued growth. Since 2005, the percentage of large companies that have increased mobile data spending has doubled, and 19% of the enterprise workforce now uses mobile data applications. SMBs expect to see 23% of their workforces using mobile data by the end of this year.

While migration from legacy to IP accelerates, MPLS adoption will swell, especially in enterprises with 20,000 employees or more. The survey found that 52% plan to increase spending this year. Companies are migrating away from legacy site-to-site services and onto MPLS at a rapid clip. Through 2005, 17% of enterprises completed MPLS migration, and another 22% plan to do the same this year. In SMBs, site-to-site VPNs are the preferred form of broadband networking technologies, with usage at 48%, compared with the 16% that currently use MPLS.

Elsewhere, the survey found that use and evaluation of IP PBX and site-to-site VoIP solutions will continue to climb. Switching voice to an IP network became a critical priority for 17% of enterprises in 2005, according to the survey. The same is true for 10% of SMBs. Many SMBs are looking at VoIP to reduce costs, because nearly half of all SMB telecom budgets are swallowed by costly landline services.

Last year's survey found that 12% of respondents were rolling out IP telephony in some form; this year, 32% are rolling out IP PBXs, while an additional 8% are rolling out IP centrex. Twenty-nine percent of companies in the business services industry said migration to IP telephony and VoIP is a critical initiative for this year.

Enterprises in the retail and wholesale trade areas have the greatest level of current telephony deployments, at 22% for IP PBXs, and 51% of North American enterprises anticipate that their migration to IP PBXs and IP centrex will be finished by 2010.

For more information

Find out how VoIP and MPLS converged a financial firm's network

Read why TechTarget members are hungry for VoIP

Check out Zeus Kerravala's column on VoIP management

Across all industries, 52% of companies plan to increase IP PBX and IP centrex spending this year. The rate of increased spending will be dictated by company size, the survey found. Forty-six percent of large enterprises will up IP telephony spending this year; 61% of Global 2000 enterprises plan to do so.

This year, 46% of enterprises will increase site-to-site VoIP spending, with very large enterprises boosting spending the most, with 51%.

Deployments of site-to-site VoIP will vary by industry, with utilities deploying at the greatest rate, 20%. Utilities are trailed by retail and wholesale trade companies, of which about 18% will deploy site-to-site VoIP. Of all industries, companies in business services and manufacturing will increase VoIP spending the most this year, with 54% and 51%, respectively.

The survey found that security services spending will also continue, as companies move from legacy data services to IP. Enterprises expect to increase network security spending by 66% over last year, and though many security technologies are outsourced, interest in managed security providers varies greatly by company size and job title.

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