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UCaaS Solutions Drive Scale and Improved Communication and Collaboration in Enterprises and SMBs; Two New IDC MarketScapes Assess the Leading UCaaS Providers

Businesses are increasingly looking to unified communications as a service (UCaaS) as a cost-effective means of providing communications solutions that support enhanced productivity and collaboration. While the early part of the COVID-19 pandemic constrained the ability for some businesses to proceed with their planned communications transformations, many organizations today have increased their resolve to adopt cloud-based, seamless UCaaS to bring scale and agility to meet changing business needs. Two new IDC MarketScape reports provide an assessment of the leading UCaaS service providers for enterprises and small and medium businesses.

UCaaS service providers are typically network carriers and cable companies that sell cloud-based multitenant/multi-instance UCaaS offerings or over-the-top (OTT) UCaaS service providers that use an existing broadband data connection as the foundation on which integrated UCaaS capabilities are layered. These two provider categories represent the bulk of the market, with some other vendors from the infrastructure side filling in the balance. In its first UCaaS forecast, IDC estimates that worldwide UCaaS service provider revenue, including OTT providers, will reach $16.1 billion in 2024 with a compound annual growth rate (CAGR) of 7.0% over the 2019-2024 forecast period.

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“There are ample opportunities for UCaaS service providers around the world as businesses look for ways to empower employees to communicate easily, share information, and meet as needed with colleagues, customers, and partners,” said Denise Lund, research director, Worldwide Telecom and Unified Communications at IDC. “However, the opportunity also poses real challenges to service providers that have not yet determined how to differentiate their offerings and add value for their customers. Even with tremendous market need, UCaaS service providers must be prepared to expand and refine their offerings to compete in this market.”

The UCaaS service provider market continues to be crowded by vendors that are moving upmarket and downmarket. In the downmarket segment, the variety of options available continue to be honed to meet small and medium-sized business needs, namely hosted voice over IP that is seamlessly connected with other basic communications services, with only a taste of the more sophisticated analytics and contact center capabilities available in a more robust manner for upmarket solutions. Overall, within this fiercely competitive market, network carriers, cable companies, and OTT service providers compete on the seamlessness of the user experience, integrations into broader unified communications and collaboration (UC&C) solutions, including platforms that integrate contact center as a service (CCaaS) with UCaaS, implementation and usage in education and support, and increasingly, price per seat.

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“SMBs need a service provider that can meet their communication requirements today, grow with them into the future, and deliver an exceptional user experience for employees,” Lund noted. “UCaaS solutions that offer a good value entry point are a good way for an SMB to begin the journey.”

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To help small and medium-sized businesses that are evaluating their UCaaS options, IDC recently published a MarketScape report that assesses 15 providers of UCaaS solutions for SMBs. The report, IDC MarketScape: Worldwide UCaaS Service Providers for SMB 2021 Vendor Assessment, uses a comprehensive framework to assess these vendors relative to a set of criteria that explain both short-term and long-term success in the market. The 15 UCaaS vendors evaluated in this MarketScape report are: 8×8, AT&T, Comcast, Dialpad, Fuze, Intrado, LogMeIn, Lumen, Mitel, Nextiva, RingCentral, Verizon, Vonage, Windstream, and Zoom.

In the enterprise segment, the pandemic has already challenged the way large organizations enable their employees to communicate, share information, and have meetings as needed with colleagues, customers, and partners. But the needs of large organizations typically extend beyond the core capabilities of a UCaaS suite. Having security and network orchestration services across a broader set of voice and data communications services is an important differentiator, as is having a simplified administrator experience. Similarly, integrations with popular enterprise software, including collaboration suites, is increasingly important to enterprises. Ultimately, the ability to mix and match UCaaS bundles to cost effectively and efficiently meet an organization’s business needs is critical to any service provider’s success.

“Enterprises need a service provider that can deliver on the promise of UCaaS flexibility, reliability, security, integrations, and a vision for how it contributes to the broader role of unified communications and collaboration across their organization, especially as hybrid work models begin to emerge,” added Lund. “Paramount to success are a broad and rich portfolio of UCaaS services and integrations, as well as enterprise-grade support and implementation services.”

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