UCaaS Outlook for 2017: Consolidation to Continue
Improved user experience, simplified management, and lower TCO will continue spurring integration around a single cloud platform.
After many years, we finally are in a place where everyone more or less agrees on what UCaaS is from a functional perspective -- that being the combination of voice services, video collaboration, and team messaging delivered via a single cloud platform. As providers work to align their product portfolios with today's common view of UCaaS, we can expect industry consolidation to continue.
The drivers for this consolidation are twofold. First, UCaaS providers can improve the user experience by allowing group messaging, voice calling, and video collaboration from within the same software client. Having one client that covers multiple interaction modes versus requiring an individual software client for each interaction type minimizes the friction that typically comes with shifting between different communications channels. For example, a user could start collaborating with a colleague by exchanging messages, then within the same app escalate to a voice call as the interaction intensifies. Finally, the user could convert that 1:1 interaction to a group video session for real-time discussion among all team members.
Second, having a consolidated UCaaS platform reduces complexity and total cost of ownership (TCO) for IT. By moving from multiple, largely on-premises technologies to a single, cloud-based platform, IT can significantly drive agility and cost efficiencies in their organizations. The more fragmented and premises-based the starting point, the greater the TCO reduction an enterprise will realize from adopting UCaaS.
When it comes to consolidation, the contact center has been and will continue to be a logical adjacency for UCaaS providers. After all, if an enterprise initiates a UCaaS deployment so it can retire an aged on-premises PBX, it must also determine how to handle the contact center agents being served from that same PBX. Some UCaaS vendors include CCaaS natively on their platforms, while others resell CCaaS or partner with pure-play CCaaS vendors.
Significant consolidation took place in the CCaaS space this year, and I expect this to continue in 2017 in the face of mounting market pressure. The consolidation is a sign of the market recognizing that CCaaS is either going to combine with UCaaS or it's going to consolidate with workforce optimization/workforce management (WFO/WFM) platforms. In fact, many enterprise IT professionals would jump for joy if they could handle their UCaaS, CCaaS, and WFO/WFM requirements from one cloud platform without the need to coordinate with multiple vendors and orchestrate complicated integrations. Such a cloud solution would help them further simplify their environments and reduce TCO.
Consolidation might come from some wildcards, as well. One is CRM integration. Most, if not all, UCaaS and CCaaS providers already have integrations with CRM platforms from vendors such as Salesforce and Zendesk. To date, CRM vendors have largely tried to stay neutral when it comes UCaaS and CCaaS, offering APIs to any company that wants to integrate with their platforms. However, CRM vendors could change their strategies and look to own the end-user communications. Natively combining CRM with UCaaS and CCaaS could lead to simplified platform management while enabling the extension of the platform to everyone in the enterprise for an improved user experience.
Another wildcard could be from the enterprise social side, as a lot of what happens in enterprise communications these days follows what happens first on the consumer side. Enterprise social network providers might find a lot of value in combining with UCaaS to create differentiation and enable communications-based workflow automation.
Regardless of what ends up happening in 2017, the horizontal nature of UCaaS means that a lot of different consolidation opportunities are possible. The market will ultimately decide what combinations are the most efficient.