Market share reports are a curious thing. They are a nice confirmation when they validate my thoughts; but when there are surprises, I question their (and my) conclusions.
Synergy Research Group recently published its Q4 2016 collaboration market data, showing strong performance from Cisco, which is joined by other market leaders Microsoft, IBM, and Avaya. Beyond these top four vendors, Synergy named AT&T, Verizon, Polycom, Mitel, Unify, and ALE as other major collaboration market players.
Stop-and-Think Results
Looking at Synergy's data, I was surprised that the company performed so well overall. I don't really associate IBM strongly with newer forms of collaboration, but the company does well in email. Other surprises in the report were strong showings for Citrix, Polycom, and Novell. BroadSoft and Genband are both in the report with deceptively low shares, but that's because many of their customers are reported separately.
I was also surprised at how far Cisco is ahead of Microsoft, particularly since the report includes email, a category that Microsoft dominates. Cisco is beating Microsoft in overall collaboration and has increased its share for three consecutive quarters. This is largely due to Cisco's premises-based solutions and WebEx.
Both Cisco and Microsoft are monomaniacally focused on cloud-delivered solutions, but neither has yet to offer a UCaaS solution that matches the features and functionality of their premises-based offers. That may prove to be a problem because Synergy reports that cloud-delivered services grew 9% year-over-year while premises-based solutions declined 4%. Even so, the hosted/cloud collaboration market appears to be up for grabs. Synergy doesn't show any single provider with a share in double digits.
Synergy Research publishes its report (to customers) in the form of an interactive database. Customers can zoom in on particular segments, vendors, or regions. The leaders in the hosted PBX and UCaaS category were all carriers: Verizon, AT&T, CenturyLink, Telstra, and BT. In the premises-based PBX and endpoints category, the leaders were Cisco, Avaya, Mitel, and Unify.
This is the first report I've seen that attempts to measure workstream messaging. Synergy refers to this category as teamwork applications. Synergy claims it's growing faster than any other hosted category at a rate greater than 400%. The other fastest growing cloud services were contact center as a service, video as a service, and file-sharing services.
I believe the ultimate winners in the teamwork category will be the companies with a solution tightly integrated with UCaaS services. Cisco, Unify, and RingCentral have a head start, but several providers are on their heels, including BroadSoft.
I consider the teamwork applications to be highly disruptive, and many UC vendors have shifted their priority and focus toward these new services. Microsoft Teams is the wildcard due to the company's large Office 365 subscriber base. Since Teams was made generally available last month, I've been getting very different types of inquiries. The non-IT Teams prospects often approach the service as a conversational version of SharePoint rather than as an alternative to email or a hub for integration. Also, they are not familiar with competitive services.
Synergy data also shows how collaboration varies around the world. For example, Cisco is the overall leader and very strong in North America. However, the picture was different in Europe, where Microsoft and in-market carriers are much stronger.
Sharing Market Share
Market share reports are inherently flawed. I don't intend offense to any of the publishers -- Synergy does a great job. The problem is the reports are quarterly snapshots. And most market share reports do not measure the installed base or reward vendors for creating long-lasting solutions. Also, market share reports look backward. There's some logic to the concept that the past predicts near-term trends, but this approach is less reliable in disruptive times. Think about the market leadership positions both Blackberry and Nokia held in 2006 prior to the iPhone.
Last, and this is often true of analyst research, these reports force the grouping of unlikely bedfellows. For example, Synergy's report on collaboration includes enterprise voice, UC applications, telepresence, email software, enterprise content management, enterprise social networks, and a range of hosted/cloud communications and applications -- it takes a village to collaborate.
This makes perfect sense because all those categories indeed foster collaboration. However, they include dissimilar vendors and providers. For example, IBM has a strong showing in this report, but they don't offer UC, or at least not call control.
Dave Michels is a Contributing Editor and Analyst at TalkingPointz.
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