While the global VoIP monitoring solutions market was in its infancy in 2004, the market experienced strong growth in 2005, to almost double in size. Although uptake was clearly stronger in the service provider vertical market, vendors that typically cater to service providers and carriers have noticed an emerging demand from the enterprise market for their solutions, as compared to 2004.

Over the past year, voice over Internet protocol (VoIP) has increasingly become a mainstream technology, as a result of improved awareness among both consumers, as well as enterprises. Most carriers today have or are on the verge of initial deployments, and as service providers, carriers, and enterprises continue to deploy VoIP, their demand for monitoring solutions is also expected to increase. VoIP deployments primarily grow in two dimensions, subscriber base and geography, and research indicates that deployments are presently growing along the dimension of geographic expansion rather than the dimension of subscriber point of presence. Frost & Sullivan expects carriers to build their geography over the next couple of years and then begin adding more subscribers on that infrastructure. This means that carriers will require more network equipment and also additional capacity to monitor those subscribers, thereby translating into more demand for VoIP monitoring solutions, since they cannot scale their operations while having the same number of trucks that were present with a smaller subscriber base.

However, an important barrier confronting vendors in the VoIP monitoring solution market is in dealing with large bureaucratic organizations such as the regional bell operating companies (RBOC).Although this hurdle is primarily encountered while dealing with RBOCs, research indicates that this challenge also exists in the cable industry, however, to a lesser extent. Old mainstream carriers remain uncertain, as to the right kind of VoIP monitoring solutions, and are hence proceeding cautiously, performing long evaluations and talking to many vendors, notes the analyst of this research service. Further, they have been evaluating multiple systems and several requests for proposals (RFP) were withdrawn when they were unable to find what they wanted. For example SBC withdrew the Lightspeed RFP.

Convergence Challenges Service Providers and Carriers, Generating Demand for VoIP Monitoring Solutions

VoIP, as a technology, has matured over time and the phenomenon of convergence of various communication technologies is proving a challenge to service providers and carriers. Convergence often translates into complexity and the management and maintenance of hybrid networks has become one of the greatest challenges for service providers and carriers. For instance, a voice call could originate in a mobile handset (3G), pass an IMS network, as VoIP and be delivered to a landline PSTN phone. Hence, with new technologies such as UMTS, IMS, and HSDPA convergence and co-existence of various communications technologies are proving critical, in turn heightening demand for sophisticated management/monitoring solutions. Frost & Sullivan expects this driver to have a significant and lasting impact on the demand for VoIP monitoring solutions.

While the global VoIP monitoring solutions market was in its infancy in 2004, the market experienced strong growth in 2005, to almost double in size. Although uptake was clearly stronger in the service provider vertical market, vendors that typically cater to service providers and carriers have noticed an emerging demand from the enterprise market for their solutions, as compared to 2004. Since service providers are expected to be the dominant end users throughout the forecast period, hardware-based VoIP monitoring systems offer the most lucrative opportunities for vendors in the global VoIP monitoring solution markets, says the analyst. Moreover, such systems are more expensive than software-based systems, promising a larger share of the total market revenues.