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It's a MultiCaaS World. Here's How to Live in It.
In their session, Living in the MultiCaaS: Comparing Microsoft, Cisco/Webex, Zoom, and RingCentral Solutions, at Enterprise Connect 2023, Brent Kelly, Principal Analyst with Omdia and Kevin Kieller, Co-Founder of enableUC, spent nearly two hours comparing and contrasting the material differences in capabilities of these major unified communications as service (UCaaS) platforms. And while the pair of presenters found more similarities than truly major differences, their commentary on where the vendors sit relative to one another strategically, pricing trends and increasing complexity of these platforms was the true takeaway.
The session was called “multi” CCaaS because, as Kelly said, “Most organizations rely on one or more different kinds of clouds. I use at least five in my company, and I use them for different things, so it's good to know about these other solutions.”
It’s a Big Market
Kelly continued with some comments about the difficulty of sizing the total market given all the categories of solutions/platforms and how unevenly the various vendors report information. But if one looks strictly at PBX manufacturer seats, Kelly said, and assuming that the average life of a PBX is 10 years, then “just counting the telephony seats, the total addressable market is more than 447 million seats. So there’s a lot of opportunity there.”
Note that each seat could potentially be counted multiple times because that TAM is just for telephony – UC incorporates much more. And, if each seat is using multiple CCaaS, then the market is theoretically even bigger. The limiting factor then becomes more about an enterprise’s budget.
Feature Comparison – Not Much in the Way of Contrast
Kelly and Kieller discussed many of the “buzzword” features touted by these companies – video, AI transcriptions and summaries, virtual backgrounds in video, gesture support in video, third-party device support, content sharing. They also looked at other important areas such as data security and residency, as well as redundancy, reliability, and failover.
After an in-depth look at the different devices supported, Kieller said, “the availability of specific device form factors that is unlikely to push you in a particular direction.”
With respect to AI features, Kelly said, “If you're going to use AI in your organization, you have to own the consequences. That's a given but just understand these solutions are not perfect.”
There were some differences among the platforms, and what those companies would likely call competitive differentiators, but Kieller and Kelly did not appear to find much that was substantially different among the solutions they looked at. What one company had, others also had – or had an integration or partnership that stood in for lack of a homegrown feature.
Differences in Market Strategies
In that vein, Kelly did draw attention to the different go-to-market strategies of the companies, which he likened to the Apple versus Microsoft model. “Cisco makes the whole stack – the software, they have the service, they have their devices,” Kelly said. “Whereas if we look at Microsoft, for example, they have this awesome service. And yet for the most part, they will farm out the devices to third parties.”
Kieller also shared a few observations about each platform (paraphrased here):
- Webex for the last two years has been reborn and so it's more like a new product.
- RingCentral is awesome at telephony. And that's where they started and they're really catching up in some of the other capabilities, as well.
- Zoom has been more of that “simplicity” approach, but from their keynote AI is going to be a potential new battleground.
- Microsoft has this giant snowball rolling downhill in Teams and the integrations its working on. It is certainly vying to be the “core” for this industry.
Kelly expanded on these points with a pragmatic question: “New, cool functionalities come out like every week, but honestly, how much are you going to be able to? What does all that do for your organizations in terms of training people to use these tools? Maybe you just want to do something nice and simple.”
Pricing Trends: Pay Attention to Who's Using New Features to Push New Price Tiers
With respect to pricing, Kelly ran through a few cost models that showed differences in costs based on number of seats, features chosen, etc., and all of it was based on publicly available pricing. “There's not enough difference in that pricing, in most cases to make that big of a difference,” Kelly said. “Pricing is hyper competitive, particularly in the large enterprise. These companies are not going to lose a deal over a 50 cent per seat or something. It will be something else to cause them to lose the deal.”
Kelly made the following observations (paraphrased here) about pricing trends over the last few years:
- Microsoft has raised its prices across the board. One of the strategies to justify the increases is the practice of reserving some capabilities for "premium" license tiers.
- Zoom: The company keeps adding functionality, like its email and calendaring functionality, which is rolling into Zoom One, but it does have some licensing options, too.
- Cisco: It's had real significant price decreases over the past few years. Kelly said, “Cisco used to be what I thought was super expensive. Now it's super inexpensive, though there are some discrete products or extensions to things like webinars that require an uplift.”
- RingCentral: It has kept their pricing pretty consistent even as they continue to add more and more functionality.
You Have to Live with Your Choice
Kieller concluded his portion of the presentation with a few thoughts on making the choice to invest in a UC platform and that means putting a lot of thought into the training, communication, and change management. “Beyond that, you have to figure out how you're going to operationalize the ongoing monitoring of quality reliability, usage, adoption, management and training and analytics are going to show you what's working and what's not,” he said. “People spend so much time figuring out what they should do that they forget that they're have to live with it for a period of time.”