CPE more than holding its own.

Anyone who knows me, knows I am big believer in hosted telecom services. Called it what you want - Hosted VoIP, VirtualPBX, Communications-as-a-Service, Voice-as-a-Service - ultimately it speaks to companies providing voice-related services off of a shared infrastructure. In other words, no customer premise equipment except for maybe the phones. Like desktop software (which also is not going away so fast), analysts have been predicted the demise of premise installed telecom solutions for some time. It seems, based on a few articles I read this week, that it is yet another case of 'not so fast'.

It's perhaps another lesson that vendors - and the VC money behind them - and analysts (paid by vendors) are often ahead of what the business consumer can, well, consume. There are endless hosted services now on the market, and by the looks of their messaging, they are growing like mad. What is more likely though is that their number of tire kickers is growing but perhaps not their customer list. At least as compared to the CPE buyers. A summary of a Forrester report from earlier this year tells a tale of slower than hoped for adoption for hosted services, although still with grand predictions for the future.

Bottom line, as I recounted earlier this week to yet another new entrant to the market: The enterprise market and the 'M' in the SMB market is still controlled by the large, legacy phone system vendors. They maintain the largest marketing budgets and can use these to frighten people away from change. And worse than not adopting a hosted service of their own, they invented something called managed services to help their customers feel like they are getting the best of both worlds. Lastly - and perhaps most important - they still control the channel, and will for some time. Moving to recurring revenue, with all its hoopla, is just not easy for the average telecom channel. Change is hard and they have been doing it one way for all too long. And if the channel is not ready, then hosted services can only scale so quickly.

There is always next year for hyper growth in hosted services. Don't give up. I am sure not going to.