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a type of outsourced enterprise communications solution where a third party vendor (known as CaaS vendor) is responsible for the management of hardware and software required for delivering Voice over IP (also known as Voice as a Service), instant messaging, and video conferencing applications using fixed and mobile devices. A synonym for CaaS is Unified communications as SaaS (Software as a Service). The CaaS model has evolved in the telecommunication industry in a similar manner to the SaaS model in the field of software delivery. It is an example of the everything as a service trend and shares many of the common characteristics. The evolution of the CaaS industry is probably because CaaS and SaaS share philosophies and they both require networking capabilities and have an on-demand delivery system. According to IDC (News - Alert), SaaS is expected to grow by more than 30 percent a year and reach $21B in 2011. SaaS and CaaS allow for little IT implementation and maintenance requirements -- and little disruption in a business is always crucial. This model of delivery opens low cost opportunities for the SMB's who are interested in Pay-as-you-go pricing model. According to the Gartner report, the market for communications as a service (CaaS) has started relatively slowly as providers determine how to define, package and market service as a value-added Internet protocol (IP) telephony offering, according to Gartner, Inc. Worldwide CaaS is projected to total $251.9 million in 2007, a 37.6% increase from last year. The market is expected to total $2.3 billion in 2011 (see Table 1), representing a compound annual growth rate at more than 105% for the period. Gartner defines CaaS as IP Telephony that is located within a third-party data center and managed and owned by a third party. The assets are not carrier-grade, the service is not "in the network" and the assets are multitenant in terms of usage. IP Centrex is an example of one type of CaaS. SIP trunking where you calls go over an IP network instead of TDM is another example.

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