Tough question. Let's start with the fact that there will always be room in the marketplace for both types of solutions. You have to look no further than the PBX / Centrex in the telephony world as evidence. Both PBXs and Centrex continue to be viable options.
Now, the heart of the issue is where will the growth be?
I feel that the market is clearly leaning toward some form of premise based solution. That can be either traditional customer premise equipment, where the customer owns the equipment, or managed scenarios where the equipment is owned and managed by someone other than the customer but still installed at the customer's site. In this form, the customer purchases a service but does not share the equipment or facility with others.
In a typical hosted scenario, the equipment is located at a data center or some central facility and is usually shared by multiple customers. It is my belief that this form of solution will not see significant growth in 2002. With the increasing focus of IT departments on security, companies are looking at ways to feel more secure and one of those is to locate equipment within their own facility. Notice that I did not say that having equipment on-site guaranteed better security, but it is an impression that carries weight.
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