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The global voice over internet protocol (VoIP) software market held an estimated value of $15,114.3 million in 2019 and is projected to reach $30,441.5 million by 2025, advancing at a CAGR of 13.4% during the forecast period (2020–2025). This can be attributed to the increasing demand for the VoIP software among small and medium enterprises (SMEs) and the growing focus of organizations on enhancing productivity. Globally, the market is expected to witness the fastest growth in APAC during the forecast period. Growing internet and smartphone penetration and the presence of a large number of contact centers can be viewed as the key factors supporting the demand for VoIP solutions and services in the region.
Factors Governing VoIP Software Market
The emergence of 5G technology is one of the key trends observed in the VoIP software market. Deployment of 5G is pushing back the frontiers of VoIP by facilitating enhanced internet connectivity, faster data transfer speeds, better coverage, and effective bandwidth management. Moreover, 5G helps improve audio and video call quality and reduce buffering.
Increasing demand for the technology among SMEs is one of the key factors driving the growth of the VoIP software market across the globe. The growth in the adoption of the VoIP technology among SMEs can be attributed to the fact that VoIP solutions are easy to install, use, and troubleshoot. Moreover, they facilitate voice communication at lower call rates as compared to traditional telephony systems. Further, VoIP system installation requires minimal technical know-how, which encourages the technology adoption among SMEs across the world.
Voice-based smart office systems provide a huge opportunity for the adoption of VoIP software solutions across businesses around the world. Smart offices are leveraging voice-enabled devices for a greater level of control in office premises. Smart devices can communicate with the office environment using voice as a platform of communication, wherein voice commands can be used to control the lighting and temperature of an office and to reorder office supplies.
VoIP Software Market Segmentation Analysis
Hosted private branch exchange (hosted PBX) accounted for a considerable share in the VoIP software market in 2019, under the technology segment. The market growth in this category can be attributed to the high adoption of the hosted PBX technology, as it is a cloud-based IP telephony solution that can be accessed through the internet, thus eliminating excess infrastructure costs associated with an on-premises set-up.
During the forecast period, the VoIP software market is projected to witness the fastest growth in the phone-to-phone category when segmented by access type. This can be attributed to the increasing smartphone penetration across the world, which is encouraging the installation of the software in smartphones to provide the users access to IP telephony.
The domestic VoIP call category held the larger share in the VoIP software market in 2019, under the call type segment. This can be attributed to the higher volume of domestic calls, which constituted 68% of the total call volume globally in 2018.
The mobile category is projected to witness faster growth during the forecast period, under market segmentation by medium. This can be attributed to the fact that mobile devices, such as laptops and smartphones, offer convenience and ease of connectivity with users from other locations having an active internet connection.
Large enterprises, as an end-user category, held the largest share in the VoIP software market in 2019. This can be attributed to the high adoption of VoIP software solutions among large enterprises, as the software provides a host of benefits such as lower costs, higher scalability, and clearer voice quality in addition to supporting multitasking such as conference calling and bulk messaging.
The residential category under the industry segment accounted for a considerable share in the VoIP software market in 2019. This can be ascribed to the huge popularity and adoption of IP telephony software, such as Google Duo, Viber, WeChat, Skype, and Facebook Messenger, in the residential sector.
Geographical Analysis of VoIP Software Market
Globally, APAC led the VoIP software market in 2019, and the trend is further projected to continue during the forecast period. India is projected to remain the largest and fastest-growing market for VoIP software in the region. The growth in the Indian VoIP software market can be attributed to the increasing IT spending and the presence of a large number of contact centers in the country that are deploying VoIP solutions to save on excess costs associated with traditional telephony hardware.
Further, the European VoIP software market is projected to register considerable growth during the forecast period, as the market is gearing up for a switch from traditional telephony, such as public switched telephone network (PSTN), to VoIP, especially in the U.K.
Competitive Landscape of VoIP Software Market
The global VoIP software market has a fragmented structure, due to the presence of a large number of players, including AT&T Inc., Alphabet Inc., Ribbon Communications Inc., Verizon Communications Inc., Microsoft Corporation, and Avaya Holdings Corporation.
Recent Strategic Developments of Major VoIP Software Market Players
In recent years, major players in the VoIP software market have taken several strategic measures, such as mergers and acquisitions, product launches, and geographical expansions, to gain a competitive edge in the industry. For instance, in November 2019, Ribbon Communications Inc., a global provider of secure and intelligent cloud communication solutions, entered into an agreement to acquire ECI Telecom Group Ltd., a global provider of end-to-end packet-optical transport and network function virtualization (NFV) solutions, to offer cutting-edge solutions such as industrial internet of things (IIoT) and AI systems to customers in more than 140 countries.
Further, in November 2019, AT&T Inc. collaborated with Nokia Corporation to launch an IoT innovation studio in Munich, Germany. The collaboration is aimed at supporting the rising global adoption of current and next-generation IoT solutions.
Market Size Breakdown by Segment
The VoIP software market report offers comprehensive market segmentation analysis along with market estimates for the period 2014–2025.
Based on Technology
Based on Access Type
Based on Call Type
Based on Medium
Based on End User
Based on Industry
Key Questions Answered in the Report