Unified Communications as a Service (UCaaS): Hosted, multitenant service used for placing and receiving calls across the PSTN, sold on a per-seat subscription basis; aggregates telephony, presence, messaging/chat, collaboration, and meetings
What We Count
In this service, we count vendor’s and provider’s relative revenue in US$ recognized during the calendar year for every category. We do not include revenue from management systems, service, or support within individual product categories.
UCaaS seats: number of business users supported
Regions
- Worldwide: all areas of the world
- North America: U.S. and Canada
- EMEA: Europe, the Middle East, and Africa
- Asia-Pacific: Asia and the Pacific, including Japan and Australia
- CALA: Caribbean and Latin America, including Mexico
There are a handful of stories in the unified communication and collaboration space that stand out in 2022, with Microsoft Teams’ expanded calling capabilities being front and center. It’s a story that starts in 2021 and picked up momentum in mid-2022.
Microsoft Teams has become a leader in the unified communications as a service (UCaaS) market but success with voice has never been at its core compared to most other providers. However, the demand for Microsoft Teams calling is high. The launch of Microsoft Operator Connect towards the end of 2021promised easier implementation of calling with Microsoft Teams. The cost and complexity of Microsoft Teams direct routing solution had previously put PSTN calling out of reach for many businesses, so Operator Connect had the potential to give Microsoft Teams users an easier path to PSTN-enabled voice connections.
The reality ended up being much harder than promised with Operator Connect and its SIP trunking partners. By summer 2022, Microsoft had launched the Operator Connect Accelerator Program, providing network operators with a turnkey solution to bring calling services to Microsoft Teams. The Accelerator program provides a suite of capabilities, including managed SBC as a service, API bridging to the Operator Connect APIs, integration into OSS/BSS platforms, and network as a service into the Microsoft Teams cloud. Vendors benefiting from the program include Audiocodes, NuWave, Ribbon, Sippio and Microsoft’s own Azure for Operators (formerly Metaswitch). And then there a number of UCaaS providers including RingCentral, 8×8, and Vonage that are taking advantage of the challenges around Microsoft Teams calling by aggressively marketing their own direct routing services coupled with their voice solutions.
Another story that shaped the UCaaS landscape this past year: While operators continue to be successful with voice trunking, they continue to see demand for UCaaS services but many are choosing not to manage and maintain their own platforms. Instead, there are more operators opting for partnerships. Notably, Lumen partnered with Alianza for its own branded UCaaS service, Lumen Cloud Communications, in April.
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Recent industry events point to more UC vendors adopting a platform approach as market competition heats up.
The last several weeks have been busy for the unified communications (UC) market. Google, Microsoft, Cisco, and Zoom held customer events, releasing a slew of new features, while RingCentral held an analyst event in October to share its accomplishments and future plans. Across all these events and introductions, one theme emerged — the UC platform.
UC vendors (including the above and 8×8, Dialpad, GoTo, Mitel, Vonage, and others) are rapidly broadening their product lines to add new capabilities like virtual events, digital whiteboards, office space reservation, remote support, analytics, AI-powered voice and video enhancements, virtual reality, expanded meeting features, and more recently, ad-hoc and asynchronous collaboration.
In addition, vendors are opening the doors to developers through expanded APIs and developer education efforts designed to make it easy for customers to adapt UC apps to specific business needs and use cases. For example, during an industry applications session at Zoomtopia, Zoom product leaders touted the ability to adapt Zoom to support use cases in education, healthcare, retail, and manufacturing. RingCentral noted that it currently has more than 75,000 developers who have built thousands of custom apps, and Cisco touted a two times increase in Webex API usage over the last year.
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UCaaS is becoming more popular as carriers roll out more sophisticated and integrated packages to users. Learn why it might make sense to consolidate your vendors.
Unified communications as a service continues to pick up steam. More than 45% of companies use UCaaS for their communications needs, according to Metrigy’s 2022 “Workplace Collaboration MetriCast” global study of 900 organizations.
Earlier Metrigy studies found that, when IT buyers were asked to identify their primary UC service provider, carriers often ranked first. This is especially true for global, multinational providers that must meet local regulatory requirements.
Thanks to a competitive market — as well as various go-to-market approaches by UCaaS vendors — buyers have a lot of choices when assessing UC. These include buying “over-the-top” services directly from vendors, among them Dialpad, 8×8, GoTo, Microsoft, RingCentral, Vonage, Webex and Zoom. Or they can create their own packages. Service providers such as Comcast Business/Masergy, Lumen and Verizon, for example, offer their own UCaaS, as well as provide managed over-the-top packages from partners.
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As organizations plan to increase CX spending over the next few years, they should pay attention to CCaaS trends, like agents changing workspaces and integrations with UCaaS.
Organizations spend just 3% of their revenue on CX technologies, according to Metrigy Research’s “Customer Experience Transformation 2020-21” study.
Depending on the technology, nearly 70% of the study’s 700 organizations plan to increase CX spending through 2025, while less than 10% plan to decrease spending. Contact center platforms are the most widely used CX technology, and organizations that already use contact center as a service (CCaaS) also plan to increase spending through 2025.
So, what makes CCaaS so ripe for investment? Aside from multichannel communication capabilities, CCaaS trends, like unified communications as a service (UCaaS) and AI, drive this technology’s usage.
1. Changing workplaces
Contact center agents began working remotely before the COVID-19 pandemic, but pandemic restrictions accelerated this move. More than 70% of organizations said their agents would continue to work from home indefinitely, either full time or part time.
CCaaS made the remote work shift easier than on-premises contact center services. CCaaS providers, like 8×8, Avaya, Cisco, Dialpad, Five9, GoTo — formerly LogMeIn — Nice inContact, RingCentral and Talkdesk, offered rapid deployments and some free services as agents moved to home offices in 2020.
After CX leaders saw deployment speeds and how easily they could add more applications from app stores, they also saw technology hurdles decrease. In fact, 56.3% of organizations said the remote work experience during the pandemic improved their perceptions of working remotely.
2. Integration of UCaaS and CCaaS
Organizations increasingly want to integrate their UCaaS and CCaaS platforms so contact center agents can pull in experts to help resolve customer issues. Other organizations want to give all employees access to contact center resources, such as voice of the customer analytics or streamlined ways to ask frontline agents for customer feedback. UCaaS and CCaaS integrations mean contact centers no longer operate as an island, but integrate into the organization.
Cloud providers, such as 8×8, Cisco, Dialpad, GoTo and Vonage, operate their own UC and contact center platforms. Some providers also have communications platform-as-a-service offerings that promote the value of an integrated service on a common native platform.
As visual engagement takes hold, Zoom has entered the contact center space with an offering that integrates video with basic contact center features and is geared toward smaller businesses.
3. Artificial intelligence
Contact center providers focus heavily on integrating AI into their platforms, with no shortage of apps that AI can benefit. Startup vendors that focus on AI for CX can drive innovation and acquisitions. Many acquisitions have also launched new divisions within companies that use AI for virtual assistants, agent assistance, knowledge management, self-service, natural language processing, etc.
Nearly all CCaaS providers have acquired other companies to enable AI innovation, including the following:
- Nice inContact acquired MindTouch for knowledge management.
- Five9 acquired Inference Solutions Inc. for intelligent virtual assistants.
- Cisco acquired CloudCherry for personalization and predictive analytics.
- Dialpad acquired Koopid and Kare for self-service.
The list will continue to grow for the foreseeable future.
CX leaders can buy AI-powered apps from startups and more established providers. They prefer to use a single provider whenever possible for tight integrations, common UIs and bundled licenses.
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Moving to UCaaS doesn’t absolve IT of management responsibility. It requires continued proactive efforts to ensure high-quality voice and video experiences.
The age of cloud communications has arrived. Metrigy’s data shows that more than 47% of companies now use unified communications-as-a-service (UCaaS) for all or some of their calling, meeting, and messaging needs. Among those still on-premises, more than one-quarter plan to shift to the cloud by the end of 2022.
The migration to UCaaS requires a rethinking of how companies address UC security, performance, administration, and endpoint management needs. Simply shifting application servers from on-premises to the cloud doesn’t absolve IT leaders of management responsibilities. It requires evolving management approaches to ensure acceptable performance for all employees and avoid finger-pointing between application providers and network service providers. This approach becomes more difficult with the rise of remote and hybrid work and the growing use of video.
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Successful companies are spending more, and are more proactive in supporting work from home.
In our recently published Workplace Collaboration: 2021-22 Research Study, Metrigy looked at the characteristics of organizations achieving measurable success from their investments in workplace collaboration technologies. This global study, based on data gathered from 476 end-user organizations across a range of sizes and verticals, identified ROI factors including cost savings and revenue gain, as well as productivity improvements.
We identified 85 participating organizations that exceeded mean benefit in one or more of these areas. We then analyzed their operational and technology deployment approaches to determine how they differed from those with low or no measured benefit, and identified major characteristics of successful organizations.
The five top characteristics are:
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