Australia's $485 million Unified Communications market increased its growth by almost a third in 2007, with CIOs and IT managers increasingly turning to UC applications to improve efficiency and save money, according to Frost & Sullivan's 2008 Australia Unified Communications Report.

The report included interviews with 365 senior IT decision makers, and revealed that awareness of UC has reached 100 percent, with telephony and e-mail the leading applications of the technology. Frost & Sullivan are predicting a 10.3 percent compound annual growth of the UC market of over the next six years.

Video, audio and Web conferencing technologies were key features implemented in UC environments in 2007, along with unified messaging, instant messaging, and mobility technologies. Email and telephony were by far the two biggest applications of UC, accounting for 18.5 percent and 67.2 percent respectively of the total 2007 market share.

However, Frost & Sullivan expect the dominance of email and telephony to drop over the next few years as demand for other UC applications such as video conferencing grows, and the cost of such technologies drops.

According to the report, few CIOs expressed interest in hosted UC solutions, with 78 percent preferring on-premise applications as they feel it allows them greater control. Small businesses appear more likely to favour hosted UC solutions.

93 percent of CIOs believe it is "quite" or "very" important for UC to be integrated across enterprise applications if the business is to gain the fullest value the deployment can offer, which Frost & Sullivan senior research manager Audrey William believes is the biggest hurdle so far to UC adoption.

"Reliability and concern over the integration of UC with existing enterprise infrastructure are the top two factors restraining deployments, with the result that few organisations today are willing to completely rip and replace their TDM telephony solution," William said.

"The companies that stand to gain the most right now are those that have already made the move to IP. They have the opportunity to dip their toes in the water with small UC deployments designed to deliver maximum efficiencies," she said.