1.5 mln IP-based PBX lines used by small businesses in 2004

In-Stat estimates that there were roughly 1.5 mln IP-based PBX lines installed in the small business market in 2004, a 28% increase over 2003 estimates. Yearly percentage increases are expected to remain at roughly 35% through 2006. In 2007, the number of IP-based PBX lines is expected to increase 30% over 2006 estimates. Moving forward, growth of 26% is expected through 2008. The total number of small business IP-based PBX lines as a percentage of total US IP-based PBX lines is expected to slowly increase moving forward.

In-Stat believes that the rapid and sustained growth of IP-based PBX (IP telephony) lines in this market, and others, will be driven primarily by the implementation of solutions in the small sites in this market (less than 50 lines). For the next two, or possibly three, years, the ability to add IP voice functionality to existing PBX solutions is likely to be more attractive for the largest firms in the small business market, which are generally reluctant to climb the technology curve quickly and are somewhat more likely to use TDM PBX solutions today. As a result, IP telephony implementation in this market is likely to be primarily in “greenfield” situations (a first-time voice network) and most likely among the smallest firms in this market. As such, sales and market strategy will need to evolve to reach the tiny businesses, those with less than 50 employees that are expected to account for the bulk of adoption and spending growth for IP telephony solutions in the small business market over time.