Five Reasons VoIP Market Growth Is Slowing

Say it ain’t so: The glory days of voice-over-IP (VoIP) sales appear over, according to Garrett Smith, one of The VAR Guy’s favorite bloggers. Hey, the party wasn’t going to last forever. And this “bad news” is actually pretty good news. Here’s why.

Smith expects the VoIP market to enjoy year-over-year growth for the next 5 to 10 years. Hopefully, The VAR Guy will have retired with IPO riches by that time… Regardless, The VAR Guy agrees: There’s plenty of room for continued growth, considering all of the enterprises and consumers who have yet to embrace IP-enabled desktop and mobile devices.

The key point: Smith isn’t saying that the VoIP market is slowing. Instead, he points out that the growth rate is slowing.

Why’s that? Of course, there’s the old rule of diminishing returns. Here’s a hypothetical example: A market that grows from $100 million to $200 million has essentially doubled in size and grown 100 percent. But a market that grows from $10 billion to $10.1 billion has grown only 1 percent — even though the actually dollar growth ($100 million) remains the same.

OK, that was a lame example. Another reason the VoIP market growth may be slowing involves confusion: Small businesses, for instance, have no idea what unified communications is, according to InformationWeek. Vendor hype about unified VoIP applications seems to be confusing potential customers, rather than educating them.

Ultimately, though, you should read Smith’s own list of five reasons VoIP market growth is slowing.