The VoIP gateway market is currently at the growth stage with market participants aiming at garnering a higher market share of an expanding market opportunity. The major strategies being pursued in this marketplace include offering highly priced, strongly branded solutions, on one hand, and simple, affordable, plug-and-play products, on the other. Different market participants have chosen one of those strategies and are targeting either more demanding accounts or more cost-conscious customers, respectively.

Moreover, smaller vendors have embarked on interoperability tests and trials, partnerships and OEM agreements to increase the visibility of their products.

A major challenge faced by vendors is the general satisfaction of enterprises with the traditional TDM systems in place and their reluctance to deploy a technology that does not offer the same reliability as the Public Switched Telephone Network (PSTN). Customer wariness about VoIP technologies slows down deployment of VoIP services and IP telephony solutions and, therefore, negatively impacts demand for media gateways.

Technological innovation is a primary factor that is expected to aid vendors in gaining a competitive edge in the market. For example, increased functionality including switch-based gateway solutions that take over some of the routing functions from the PBX have proven successful for some vendors. Other areas of technology innovation include the addition of a local proxy server capability, SBC functionality, remote management and better auto-provisioning capabilities to gateway solutions. Gateway vendors are also offering easy-to-use devices that minimize the learning process that enterprises have to go through when deploying the solution.

A strategic analysis of these factors has aided Frost & Sullivan in identifying a set of Best Practices as well as companies that have become leaders in some of these initiatives.