In a Biannual VoIP Market Worth $21 Billion, Where's the Innovation?

The numbers from Infonetics Research certainly sounded impressive. A new report by the market research firm revealed that the global market for VoIP services reached $21 billion in the first half of 2009. That sheer volume of revenue made it seem as if VoIP had become the massively disruptive technology everyone said it was going to be. A closer look, however, reveals just the opposite. In fact, VoIP itself is not inherently disruptive. Rather, it's merely a technology that makes the creation of disruptive services possible for those with the vision and insight to use it that way.

The Infonetics numbers include revenues from the biggest VoIP providers around. In the U.S., those are cable companies, with Comcast holding top spot as the largest residential VoIP operator. Such companies aren't using VoIP in innovative ways, however. In fact, they're doing little more than emulating traditional landline residential phone service. Like the traditional telcos, they're offering voice as part of a bundle of services, with low price being a key selling point. In other words, they're trying to compete on price and marketing clout rather than by offering compelling new services.

In the business VoIP market, Infonetics found that a full one-third of total revenues came from IP connectivity services. The term refers to sending calls to company premises over IP connections rather than traditional T1 or other circuits. The IP connections may take the form of VoIP VPNs, SIP trunks or IP integrated access services. Once again, though, the main attraction of IP connectivity is saving money. And Infonetics thinks the category will increase to 40 percent of the business segment in 2013.

On the other hand, some of the most innovative uses of VoIP technology may never show up in market research reports, because they don't produce easily measurable revenue. For example, many companies offer free VoIP connectivity to their online communication offerings, such as voice conferencing and Web-based meeting services. Such providers make their money from their core services, not from VoIP. Revenues from the service may in fact subsidize the voice connectivity. But these, rather than the cable and other mainstream VoIP providers, are the companies that are helping fulfill the prediction that eventually voice communication will be free.