UCaaS: Not If, But When

Between the rapid growth of mobile communications, and the advent of the anywhere, anytime enterprise, Unified Communications as a Service (UCaaS) has been getting increased attention. Forecasts vary greatly, but one thing they have in common is that the UCaaS market is expected to grow substantially over the next few years. For many organizations, it’s not if you’ll move to a cloud-based Unified Communications (UC) utility model, but when.

Like the forecasts, definitions of UC vary. Gartner defines UC products (equipment, software, and services) as those that facilitate the interactive use of multiple enterprise communications methods. UCaaS supports the same functions as premises-based UC – voice and telephony, including mobility support; conferencing (i.e. audioconferencing, videoconferencing and Web conferencing); messaging, email with voice mail and unified messaging (UM); presence and instant messaging (IM); clients, including desktop clients and thin browser clients; and communication applications, (i.e. integrated collaboration and contact center applications) – with just the delivery model altered http://www.gartner.com/technology/reprints.do?id=1-20RB601&ct=140903&st=sb.

UCaaS is growing in popularity. Over 50% of medium and large organizations in North America will be running some of their unified communications applications over either a private or public cloud service by 2016 http://www.marketwatch.com/story/infonetics-businesses-detail-plans-to-move-unified-communications-to-the-cloud-name-top-vendors-2015-03-30-12173927.

“Businesses continue to migrate their unified communications applications to the cloud, citing flexibility as the key reason,” said Diane Myers, principal analyst for VoIP, UC and IMS at Infonetics Research. “Cloud solutions are inherently more flexible than premises-based solutions, offering businesses the ability to scale users up and down, centralize management, and deploy new features and applications quickly.”

Key findings of the survey included:

  • The number-one UC device is the smartphone, ahead of traditional computing devices such as laptop and desktop computers;
  • Web- and video-conferencing and text messaging are increasingly becoming part of businesses’ UC communication types, reflecting changing user behavior;
  • By early 2016, 93% of respondents plan to implement video conferencing into their UC solution;
  • When choosing a UC supplier, enterprises ranked product reliability and technology innovation as the most important criteria; and,
  • The most important criterion when selecting a cloud/hosted provider is security levels.

A recent study puts the annual growth at over 20% for the next seven years, with a market totaling almost $38 billion by 2022 http://blog.cdw.com/unified-communications-and-the-cloud-a-match-made-in-heaven/#.VWM5T6PbKUk. Another study expects the North American UCaaS market to be worth $5.95 billion in 2019, up from $1.09 billion in 2012 http://biztechreports.com/blog/2015/03/12/flexibility-drives-unified-communications-hosted-ip-telephony-frost-sullivan/.

“Small and medium businesses in North America use hosted services to gain greater flexibility and access to more advanced communications capabilities, while large organizations are making the switch to consolidate infrastructure and streamline vendor relationships,” said Elka Popova, Frost & Sullivan’s Program Director for Unified Communications in North America. “Going forward, the benefits of cloud solutions for mobile and remote workers, as well as increasing service provider focus on service quality and reliability will boost penetration in larger, geographically distributed organizations.”

A November study projected global UCaaS sales of $5.3B by 2018 with a 5-year compound annual growth rate of 24%, with considerable growth coming from the mid-to-large enterprise segment http://cp.wainhouse.com/content/wr-ucaas-forecast-2014-press-release.

“There’s a growing preference for cloud-based services, particularly in mid-to-large enterprises, and UCaaS is riding that demand,” notes Bill Haskins, Wainhouse Research Senior Analyst & Partner. “Putting unified communications in the cloud makes great economic sense: the infrastructure is there, the support mechanisms are in the place, the training program is ready. Plus, fewer IT and purchasing resources are required to manage it.”

The UC market has not enjoyed the success initially predicted for it, plagued by complexity and cost, but it looks like taking it to the cloud will make unified communications more accessible, and more popular. It only makes sense that a service which reduces complexity, and if not reducing cost, at least makes it more predictable with monthly billing, while providing more agility than trying to do everything in house, will gain increasing favor.

steve-wexler-wordslingers-ink

Steve Wexler, Wordslingers Ink (stevewexler.wordslingers@gmail.com) and IT Trends & Analysis (www.it-tna.com), has been writing about business technology since IT was called DP/MIS, and telecommunications was handled by the office manager (AKA the Big Iron Age). He has written for all the major IT publishers and vendors, and for all the IT audiences – builders, sellers, and buyers.

Share This