Retailers sold on IP services

Retailers sold on IP services

The Australian retail industry is showing keen interest in IP services and will be among the frontrunners in adopting the technology, according to IDC statistics.

Half the 200 retail/wholesale respondents in the IDC Australia Telecom Survey said they would increase spending on IP services by at least 10 per cent. The survey was part of collated 2003 research presented at IDC conferences last week.

The retail/wholesale category matched the education/healthcare/government and professional services industry categories for the number of spending increases over 10 per cent.

A service enabler for IP networks with VoIP and videoconferencing, IP VPNs had received strong interest from "cost conscious" retailers, IDC telecom research program manager, Landry Fevre, said.

"They're not necessarily going out to market [to buy an IP VPN], but they're looking to improve their supply chain," he said. "The opportunities are there."

Supply chain management can benefit from IP VPNs by adding internal or external parties to a retailer's network at lower than conventional costs.

This market would not be sewn up by Telstra and Optus either as their low-end IP VPN solutions were "not good", Fevre said.

"Low-end solutions are popular," he said. "Companies such as Pacific Internet, Primus and Commindico are well-positioned for this market."

The Australian managed IP VPN services market will be worth about $500 million in 2004, according to IDC.

However, self-implemented IP solutions are proving far more popular than carrier ones, according to the survey.

About 40 per cent of businesses will have a self-implemented IP VPN by the end of the year. In comparison, about 20 per cent will have carrier IP VPNs.

Fevre said the providers offering the most services were more likely to win deals.

"In Europe there have been industry solutions, but industry specific offerings are still to come in Australia," he said. "So for retailers you could have voice conferencing with DSL and EFTPOS."

Bundled services would also be attractive, he said. This would help system integrators.

The level of market competition also meant providers dealing with large businesses needed to offer end-to-end connectivity in locations they might not cover.

There has been a similar trend for VoIP deals in lowering the costs of handsets to secure larger IP deals.

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