I’m generally not fond of ‘top ten predictions for the New Year’ type posts, so, instead, I will focus on just one specific prediction.   In 2011 – I expect to see a surge in new announcements of hosted business offerings from service providers.

I do not believe this is a bold prediction.   Even in the last few months of 2010, we’ve seen service providers, who have historically been “trunking only”, make a move to deliver hosted/cloud offerings.    BroadVox’s acquisition of Cypress has shown their interest in leveraging Cypress’s award-winning C3IP and C4IP “UC as a Service” solutions; separately, CBeyond’s acquisition of Aretta and MaximumASP likewise demonstrates movement more firmly into the hosted solution space.

Things tend to happen in the market when incentives align – it seems to me, that’s what’s happening here:

  • Service providers that are “trunking only” are looking to go up the value chain, and, therefore, as I believe and have received feedback of, they are rightly concerned about commoditization problems, downward pricing pressure and a lack of differentiation.
  • Market numbers continue to substantiate a large movement to hosted VoIP as businesses continue to adopt hosted models.
  • The Agent and Channel community is looking for hosted solutions they can sell –clearly perceiving this demand as evident by, for example, the recent Channel Partners Conference – which pushed an agenda almost entirely devoted to hosted business solutions.

When “trunking only” service providers go ‘up the stack’ and also sell Hosted Business solutions – when they sell an app as well as connectivity and transport–customer feedback demonstrates a large growth in revenue and greater relevancy to the customer, with less churn and more customer mindshare.     I expect to see many more similar announcements from service providers in 2011.