According to the latest market study by ABI Research, 41 percent of all enterprise communications users -- or 386 million lines or seats -- will be on virtual infrastructure by 2016, which is posing a serious danger to the traditional CPE market.
"For CPE vendors, the cloud threat is real," says ABI senior analyst Subha Rama. "By 2016, the communications CPE market will only grow 4.3 percent, while cloud communications will grow by over 21 percent, reaching $8 billion in revenues."
Smaller vendors with point solutions will see cloud services rapidly displace their installed bases. Moreover, some large systems vendors are becoming cloud providers or key enablers of this migration.
However, according to the ABI assessment, many of the CPE solutions are simply not "cloud ready" and will see performance downgrades when virtualized.
The Top Three Forces Influencing Cloud Migration are:
- The growing adoption of data center architectures and virtualization technologies.
- The need to integrate multiple applications to deliver the connected experience to users across different devices, including smartphones and media tablets.
- The promise of lower costs and increased efficiencies from standardized platforms and processes in the cloud.
Mixed environments and hybridization are becoming the norm, especially with larger enterprises. However, the technology to manage hybrid clouds and to enable seamless movement of applications instances across different vendor clouds is in its infancy.
"Enterprise mobilization is also driving migration to the cloud," says ABI practice director Dan Shey. "Cloud applications ease application delivery for businesses that are increasingly relying on access across fixed and mobile endpoints."