Hosted PBX Market Analysis by Component (Solution, and Services); by Organization Size (Large Enterprises, and SMEs); and by Industry Vertical (BFSI, Healthcare, Government, Retail, and Manufacturing) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4932 | Published Date: May 02, 2023
Hosted PBX Market size is estimated to reach ~USD 15 Billion by the end of 2035 by growing at a CAGR of ~13% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the size of hosted PBX market was ~USD 7 Billion. The growth of the segment can be attributed to growing small sized businesses. In the US, there are about 31 million small businesses, which make up approximately 98% of all enterprises. Hence, the demand for hosted PBX is growing. Hosted PBX eliminates the need for small enterprises to purchase and operate costly on-premises PBX equipment. Instead, the system is managed and maintained by the service provider, lowering the overall cost of ownership.
Moreover, employees may work from any location with an internet connection and yet be linked to the same phone system as a result of hosted PBX, which is perfect for scattered and remote teams. Hence, with the growing employees working from the demand for hosted PBX market is growing. By 2025, about 21% of the labor force—or approximately 35 million Americans—would work remotely. The overall cost of ownership is decreased with hosted PBX since staff are no longer required to buy and maintain pricey on-premises PBX equipment. Moreover, hosted PBX companies often have strong security mechanisms in place to guard against data breaches, assisting in ensuring the privacy and security of crucial corporate conversations.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~13% |
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Base Year Market Size (2022) |
~ USD 7 Billion |
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Forecast Year Market Size (2035) |
~ USD 15 Billion |
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Regional Scope |
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Growth Drivers
Challenges
The global hosted PBX market is segmented and analyzed for demand and supply by industry vertical into BFSI, healthcare, government, retail, and manufacturing. Out of which, the BFSI segment is anticipated to garner the highest revenue by the end of 2035. The growth of the segment can be attributed to growing financial services owing to the rising economy. One of the economies in the world with the quickest growth rates was India. Real GDP increased by 7.7 percent annually over the first three quarters of the fiscal year 2022–2023, maintaining its strong overall growth, which is projected to be 6.9 percent for the entire year. During the second half of FY 22/23, there were some indications of moderation. Hence, the need for financial services is growing as economies continue to develop and become more complicated. Therefore, the demand for hosted PBX market is also growing since they offer various advantages. Hosted PBX solutions frequently provide cutting-edge capabilities including call routing, call recording, and voicemail-to-email, which could be very valuable for financial services that largely rely on phone communication.
The global hosted PBX market is also segmented and analyzed for demand and supply by organization size into large enterprises, and SMEs. Amongst which, the SMEs segment is expected to have the significant growth over the forecast period. SMEs frequently lack funding for traditional PBX systems as well as employees and infrastructure in the IT department. As a result, they are more inclined to use hosted PBX systems to gain access to cutting-edge communication technologies, lower expenses, and enhance customer experience. Moreover, for SMEs who depend on mobile and remote workers, hosted PBX systems enable employees to operate remotely or while on the go. This enables them to stay in contact and keep up a high level of production regardless of where they are. Additionally, hosted PBX systems are easy to set up and administer, making them a popular solution for SMEs that don't have dedicated IT employees. This enables them to concentrate on other important duties for the firm.
Our in-depth analysis of the global hosted PBX market includes the following segments:
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By Component |
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By Organization Size |
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By Industry Vertical |
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The share of hosted PBX market in North America, amongst the market in all the other regions, is projected to have the highest growth by the end of 2035, backed by growing remote workers, along with surge in cloud adoption. From 5.7% (approximately 9 million individuals) to 17.9% (27.6 million people), the percentage of persons who work primarily from home increased by thrice between 2019 and 2021, in US. Moreover, natural calamities including hurricanes, tornadoes, and earthquakes are common in North America, and they could interfere with communication infrastructure. Advanced disaster recovery features, such as automatic failover to backup systems, are provided by hosted PBX systems, which could assist businesses in maintaining communication even in the case of a disaster. Additionally, numerous businesses in North America are expanding quickly, and they require communication systems that could keep up with their expansion. High degrees of scalability are provided by hosted PBX systems, enabling organizations to add more users and capabilities as required without having to invest in extra gear. Hence, owing to this the market is estimated to grow over the forecast period.
The Asia Pacific hosted PBX market is estimated to be the second largest, to have the highest growth over the forecast period. Some of the world's fastest-growing economies are found in Asia Pacific, and as a result, many small and medium-sized firms are expanding there. These companies have access to a scalable and cost-effective communication solution with hosted PBX systems. Moreover, in recent years, Asia Pacific has seen tremendous investment in internet infrastructure, with many nations deploying high-speed broadband networks. As a result, adopting hosted PBX systems has become simpler and more cheap for enterprises. Additionally, numerous companies in the Asia-Pacific region work in regulated fields including finance, healthcare, and the public sector, which have stringent regulations about compliance. These companies may utilize hosted PBX systems, which include capabilities including call recording and secure messaging, to help them satisfy their compliance requirements.
Additionally, the market in Europe region is also estimated to have the significant growth over the forecast period. Businesses in Europe have shifted significantly in recent years towards cloud-based solutions, embracing the advantages of cloud computing. Hosted PBX systems are a popular choice for companies in this region, wishing to migrate their communication systems to the cloud since they provide a cloud-based communication solution that could be accessed from any location. Additionally, as more employees work remotely or while travelling, there are an increasing number of mobile workers in Europe. With capabilities including mobile apps, softphones, and voicemail-to-email, hosted PBX systems provide these mobile workers with an easy and flexible method to keep in touch.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Abhishek Verma, Hetal Singh
Ans: The major factors driving the growth of the market are growing penetration of internet, rise in large enterprise, upsurge in calls placed by call centers, and others.
Ans: The market size of hosted PBX is anticipated to attain a CAGR of ~13% over the forecast period, i.e., 2023 – 2035.
Ans: Complexity of migration, security concerns, and lack of customization are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the North American region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are RingCentral, Inc., 8x8, Inc., Vonage Holdings Corp., Nextiva Inc., and more.
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by component, organization size, industry vertical, and by region.
Ans: The SMEs segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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