News: Sector as a whole sees 16 percent annual growth.
The boundaries between the two segments of the Unified Communications as a Service (UCaaS) market could be set to blur.
Research from Synergy Research Group found that with the total UCaaS market growing 16 percent annually, revenues from the smaller business suite segment were growing faster than those of the UCaaS standalone applications segment.
While standalone applications and business suites account for 67 percent and 33 percent of the market respectively, the latter is growing at 23 percent annually.
This compares to only 13 percent annual growth in the standalone applications market.
SRG also showed that each market was dominated by a distinct set of players: Cisco, Citrix, Microsoft, inContact and Genesys controlled the standalone applications market.
Meanwhile, RingCentral, 8×8, Vonage, ShoreTel and Mitel were the biggest players in the smaller but faster-growing business suite market.
Rob Bamforth, Principal Analyst at Quocirca, explains that the division in the market arises due to a difference in approach and customer base:
"Although it’s aaS, there may be a tendency for the big players offering standalone apps UCaaS to be more led by IT rather than telecoms decision makers and to be selling into larger organisations (it’s the larger part of the market still), or at least those that have more capacity for implementation support (i.e. More internal IT departments)
"The business suite providers tend to have a stronger historic focus on telephony, and perhaps take more of a ‘set up and go’ without needing much internal (IT) support, in the past having sold to telecoms and facilities minded buyers, and now offering a breadth of communications products: ‘your complete business communications solution’ as one says."
Bamforth explains, however, that this split could be set to disappear, but this would be dependent on the right choices by suppliers.
"It’s not a strong split, however, once services are factored in, and hence the prospect of blurring. But, and this is the big but, can the larger more IT-led players (and their channels) offer the right mix of services?
"This is one of those tricky consequences of convergence where it’s not just about having IT skills for complex and cloud managed deployments, but understanding the business communications needs of non-IT people.
"On the basis of how long it took UC to get going, partly because of the focus on ‘plumbing’ and a lack of understanding of the impact on people and business process, I think there is still a good opportunity for the business suites providers to continue their strong growth, while the standalone providers sort out their services, and perhaps crucially, engage with the right types of channel partners who can help with this."
Monica Visconti-Patel, Senior Director of EMEA and Marketing at RingCentral, a leader in the business suite segment, said:
"The statistics from Synergy Research Group on the continuing growth of UCaaS demonstrates that business communication is still evolving.
"Companies now understand that they need to be able to support a mobile dispersed workforce with video and audio conferencing, collaboration and instant messaging to effectively communicate in the modern world of work; however, they don’t want multiple tools to manage."