Beginning in the 1990s, Integrated Services Digital Network or ISDN, gained widespread use in Germany with 12.78 million subscribers. But as with any good thing, it must come to an end. Now, European providers are announcing the switch off of ISDN to be completed by the end of 2018.
With the rise of Internet protocol (IP) connectivity services, the mass migration was inevitable. Both providers and customers want affordable and flexible next-generation solutions like hosted private branch exchange (PBX) and unified communications as a service (UCaaS) that solve today’s most critical challenges. The increasing availability of cloud services and feature-rich application sets like collaboration and mobility are heating up the competition to provide customers with a best-in-class bundled solution.
Europe vs. US
Service providers have a sweeping green field in Europe with the migration, but that won’t make selling services easier. In a study completed by Frost & Sullivan, they explored the European hosted IP telephony and UCaaS market and technology trends, drivers, and restraints. Findings showed that valued added services and channel development, including white-label and platform as a service partnerships were key growth areas. This highlights a critical point – as a provider you must disrupt or face your own business being disrupted.
Simply developing a basic UCaaS or hosted PBX offering will be the downfall of European providers as US competitors move into their territory. The injection of competition in the European market will increase price pressures for basic services and require a more comprehensive bundling of services to actualize revenue success.
5 Trends in European IP Telephony and UCaaS
European customers have moved from the consideration phase and are ready to purchase. In short, they need services and providers to act quickly to meet market demands.
Here are five key trends in the European telephony market according to Frost & Sullivan that providers should consider:
- Customers want feature-rich and affordable cloud collaboration solutions that offer both team messaging and real-time communications functionality. Plus, “freemium” models that ease unified communications and collaboration users into the cloud.
- Tailored solutions that integrate with other business software to gain the most benefits out of communications investments.
- Integration of telephony with popular third-party software (productivity suites, customer relationship management, etc.) to improve UCaaS stickiness and experience.
- Highly mobile workforces and a limited installed base of premises-based systems in the Nordic and the Benelux regions offer strong market penetration.
- Penetration opportunities in Central and Eastern European countries where there is limited UCaaS and the demand for flexible and affordable communications is high. France, Germany, and the UK will be the largest installed base due to the workforce size and population.
Challenges for CSPs Serving the Enterprise Market
One thing that levels the playing field is that managing hybrid, virtual, and physical networks and functions are equally difficult for US and European providers. Since the dynamic, hyper-connected networks of today are vastly different from what we are used to, there will be some growing pains. Specifically, communication service providers should expect the following challenges to overcome:
- Insufficient visibility into customer sites
- Security and vulnerability risks
- Lack of remote management and diagnostics
- Service assurance from customer premises through the provider network
- Enabling the mass market adoption of services across countless customer locations
Edgewater Networks has developed Network Edge Orchestration, a cloud/edge solution that combines EdgeMarc Intelligent Edges with the EdgeView Service Control Center to provide end-to-end visibility and control of communications on the network.
US and European service providers that are looking to gain an edge in the UCaaS and hosted PBX markets should consider bundling Network Edge Orchestration to seamlessly deploy mass solutions with unmatched control. To learn more about the current landscape, download our Hosted PBX & Unified Communications in the SMB Market White Paper.