Managed service providers tend to overlook voice communications as an opportunity, mainly because it’s a space that’s been dominated by telecommunications carriers for decades. There’s not a lot of love lost between carriers and MSPs, especially among MSPs that also resell products in addition to providing services. Many MSPs have accused carriers of abusing their market position to acquire networking equipment on volume only to resell that gear at cut-rate prices that get hidden inside larger services contracts.
But, with the rise of voice-over-IP (VoIP) the communications playing field is starting to level. There is now a wider variety of providers of VoIP services leveraging the cloud and wholesale networking services at a time when more businesses are switching to VoIP services primarily to lower costs.
In fact, research from Coherent Market Research forecasts that the VoIP services market will grow from $92 billion in 2016 to $207.3 billion by 2025, representing a compound annual growth rate of 9.5 percent. Today, Coherent says businesses account for 69 percent of the global VoIP market; a percentage the research firm says will remain consistent through 2025.
Opportunities and challenges
One of the big drivers of VoIP in the year ahead will be the transition to 5G networks. It may take some time for 5G networking to become mainstream. But as demand for next-generation services based on IP networking increases, reliance on VoIP will naturally increase. In fact, MSPs that don’t offer VoIP services will be leaving the door open for other MSPs that will bundle VoIP services with every other service they provide.
New @CoherentMI forecast: the #VoIP services market will grow to $207.3 billion by 2025 @smartermsp
Margins on VoIP services may be constrained because of the abundance of suppliers. But in many cases VoIP will become a table stakes service that MSPs will expected to provide as part of a larger suite of services. For example, access to cloud collaboration services can be bundled with VoIP services — all of which an MSP will also be expected to secure. That means over time the average contract an MSP signs could easily consist of three or more communications and related security services at a minimum.
Don’t miss your chance
The better news is that carriers will not be able to exercise the same level of control they once did. New software-defined wide area network (SD-WAN) platforms make it much simpler to dynamically switch service providers. That capability will provide MSPs with the power to effectively make providers of underlying network transport bid for network traffic.
As far as communications is concerned, this is a new era. Recognizing the need to provide network services in a more agile manner, every meaningful network service will soon be delivered over IP. Voice and video communications will be coming along for the ride. MSPs that don’t provide these services do so at their own peril. It’s only a matter of time before they’ll find themselves marginalized by rival providers that view communications as a means to a much larger managed services end.