A Look at the UCC Market
After a rough start, UC is becoming more mainstream. End user revenues will continue to increase, while vendors jockey for leadership positions.
At long last, my latest Unified Communication market study update is almost finished. It's been a labor of love, although frustrating at times, particularly when trying to size the market. The following are some of the topics covered:
1. We're finally at the point where people are no longer asking, "What is UC?" but rather, "How should we develop our UC strategy?" and "What are the best ways to deploy UC?" The next step in the evolution of UC is Unified Communications and Collaboration (UCC), or what we call Collaborative Communications. For many organizations, collaboration between workers, customers, suppliers, and others is the goal, with UC as the enabler to these collaborative endeavors.
2. The need for UCC has never been greater, as the growth of the mobile workforce has led to the need for workers to communicate regardless of their location or device, and the rise of video communication and tools such as social software have created new ways for people to interact. Among the elements coming together are: UC tools such as email, voice, text, video, presence, IM, click-to-communicate, mobility, and unified client; collaboration technologies such as shared workspaces, meetings and conferencing; social tools such as communities, user profiles, microblogging, and activity feeds. With an integrated UCC or Collaborative Communications solution, users can access the tools they need from whatever application they're in, without having to switch out from one to another. When tied in with a company's business processes, the result is optimized business processes.
3. Trends such as the consumerization of IT, Bring Your Own Device and virtualization are helping to propel the UCC market. The next opportunity for UCC is in hosted services, but expect to see most customers opting for a hybrid of premises and hosted solutions. With the exception of the SMB segment, hybrid solutions will dominate. Most premise-based UCC vendors are adding hosted services to their offerings, providing more choices for customers. Channel partners will need to get up to speed on selling hosted services, and vendors will need to find ways to incentivize and compensate the partners who are no longer "selling boxes."
Quantifying the UC market remains extremely difficult, as every vendor counts its UC shipments differently, and many components are now being bundled in with the UC server, and clients are often given away for free. I've identified the individual components that make up a UC solution, forecasting the total growth of each component in terms of revenues and seats, resulting in a Total Gross, or UC-Capable forecast. From that, I identify the Net or "True" UC market, which identifies the percentage of gross UC sales and seat shipments that are expected to be used for UC solutions rather than as a standalone or non-integrated product.
The worldwide Total or UC-capable market for premise-based UC was $12.23 billion in 2011, while the net or True UC market was $2.7 billion. The UC-capable market was up 8% from 2010, while the True UC market was up 20%. The component growing at the highest CAGR is conferencing/collaboration, growing at 50% CAGR,, while the UC Server/IM/Presence represents the largest portion of revenue each year, going from 70% in 2011 to 73% in 2016.
The UCC ecosystem is huge, and includes many different types of vendors--no one single vendor provides all of the UC elements for a complete UC solution. Each vendor has strengths and challenges that potential customers need to evaluate and understand--e.g., in terms of openness, innovation, vertical expertise, etc. The report identifies the vendors that COMMfusion believes are leaders in these areas.
After a rough start, UC is becoming more mainstream, especially as it morphs to UCC. End user revenues will continue to increase for the next few years, while vendors jockey for leadership positions. It'll be an interesting ride.