Gartner defines CaaS as IP telephony that is located within a third-party data center and managed and owned by a third-party. In other words, it's communications technologies managed and hosted by off-site providers, freeing businesses and commercial property owners from the challenge and cost of providing state-of-the-art services.

CaaS produced $252 million in 2007, up 37.6% from a year earlier, Gartner notes. The industry is expected to hit $576.2 million this year and $742 million in 2009. But the largest growth for CaaS will occur between 2010 and 2011, when the market jumps from $1.2 billion to $2.3 billion.

Eric Goodness, research vice president at Gartner, expects the market to grow as providers that improve their marketing and businesses "realize they won't run the risks associated with having their own in-house communications systems."