Hosted IP voice services are not ready to challenge PBX "any time soon" for supremacy in the enterprise communications market, despite enjoying a steady increase in demand over the past two years, IDC argues.

Although the analyst firm believes that hosted IP voice will eventually develop into a compelling service option, "a great deal of work" still needs to be done to improve the services.

IDC expects the market for hosted IP voice services among US businesses to reach nearly $456m by the end of 2008.

But the study found that current growth in the hosted IP voice market masks several challenges that the industry will continue to face over the next few years.

"Some of the early implementations were flawed, leading to customer cancellations and botched deployments," said Rebecca Swensen, research analyst for VoIP services at IDC.

"Although there are plenty of examples of smooth implementations and satisfied customers, the stain of poor service hangs over hosted IP voice like a dark cloud."

IDC believes that the lessons learned from these early deployments are a " painful but necessary" part of the adoption cycle as the hype and potential of a new service runs up against the reality of customer expectations.

"Conversations with enterprise IT managers and service providers confirm that, while delivering quality VoIP via IP PBX is hard, delivering hosted IP voice is even harder," IDC stated.