SHARE



ABOUT THE AUTHOR


Elka Popova
Elka Popova, a program director with Frost & Sullivan, has 15 years of market analysis and strategic consulting expertise with...
Read Full Bio >>
SHARE



Elka Popova | March 07, 2018 |

 
   

What's in Store for the UCaaS Market in 2018?

What's in Store for the UCaaS Market in 2018? Providers will capitalize on healthy IT budgets and customer readiness to adopt cloud solutions.

Providers will capitalize on healthy IT budgets and customer readiness to adopt cloud solutions.

The year 2018 has already proven eventful for the enterprise communications industry, with several mergers and acquisitions (M&A) and major vendor restructuring initiatives (e.g., Avaya's emergence from bankruptcy) marking the first couple of months. Frost & Sullivan customer research shows that companies will make significant investments in communications and information technologies this year, creating growth opportunities for both established participants and new market entrants.

To position for future success, communications solutions providers must accurately assess market trends and gain a deeper understanding of customer challenges and investment drivers. No doubt, customer migration to cloud architectures and delivery models is one of the overarching trends in the industry and must define providers' visions, portfolios, and go-to-market strategies. But will 2018 be "the" year of cloud? If so, how can providers differentiate and deliver a more compelling value proposition to customers to beat the competition?

Cloud Adoption Goes Mainstream, but Remains a Daunting Task
Compelling evidence suggests that the move to cloud is happening in earnest. A recent Frost & Sullivan survey of nearly 2,000 global IT and telecom decision makers reveals that a surprising 80% to 90% of respondents in all industry verticals are already using a cloud communications provider. Digging deeper into the data we see that 54% of those using a cloud provider have moved part or all of their enterprise telephony solutions to the cloud and another 31% plan to do so in the next couple of years. These data suggest considerable opportunities for unified communications-as-a-service (UCaaS) providers offering PBX and key telephony system replacement solutions.

An even larger percentage of respondents -- 61% and 59%, respectively -- have moved part or all of their video and Web conferencing solutions to the cloud. Furthermore, 62% of respondents are consuming instant messaging solutions as cloud-based services. More than a quarter of respondents plan to move part or all of their video and Web conferencing and instant messaging to the cloud in the next two years. This creates growth opportunities for standalone conferencing and messaging application providers, as well as UCaaS providers with compelling conferencing and messaging capabilities in their portfolios.

The UCaaS market has evolved dramatically over the past couple of decades. Most businesses are aware of the benefits offered by cloud delivery models and are considering cloud options for their future communications solutions. However, many decision makers also acknowledge the risks and challenges associated with the move to cloud. Existing premises-based UC investments, particularly in more complex IT and telecom environments, often delay cloud adoption. Control and security remain top concerns related to cloud solutions: 49% of non-cloud users wish to retain full control of their communications solutions and 46% consider hosted communications a security risk.

Frequent shifts in service provider portfolio roadmaps and competitive position represent another major concern for IT and telecom decision makers. Intensifying M&A activity in the service provider community is creating a particularly strong sense of uncertainty among businesses evaluating UCaaS solutions and providers. While competitor consolidation is likely to have an overall positive impact on industry health, it also causes customer hesitation and/or churn.

IT Budgets Favor New Investments, but Voice Isn't a Top Priority
As we face the possibility of a global recession, UCaaS providers and other communications vendors fear delays in customer technology upgrades, including the move to cloud solutions. Frost & Sullivan's customer data provides some comforting insights: 62% of global decision makers state that their IT and communications budgets will increase in 2018, whereas only 5% expect their budgets to decrease this year.

Reducing operational costs and improving the customer experience will represent the main IT investment drivers in 2018 for 33% and 32% of respondents, respectively. A factor for communications supplier concern is that UC ranks low among technologies expected to impact revenue growth and margins. Overall, respondents expect that cyber security, big data and analytics, and data center investments will be the most impactful for their revenue growth and cost reduction efforts. The good news is that more than half of the respondents plan to invest in UC in 2018 and 2019.

Among communications technologies, Web conferencing ranks highest in terms of 2018 budget priority (selected by 26% of respondents), whereas IP telephony is a priority for 19% of respondents.

Continue to Page 2: Winners and Losers





COMMENTS




June 20, 2018

Your enterprise may have adopted SIP Trunks, but are you up to date on how the latest technology is driving evolution in approaches?

In this webinar, youll learn how the new generation of SI

June 6, 2018

The two largest strategic vendors-Cisco and Microsoft-have been busy making changes to their enterprise communications roadmaps, incorporating collaboration applications as fundamental components.

May 23, 2018

If Cisco is a critical strategic supplier for you, then its vital for you to understand the most recent announcements around Webex Teams, and how to build your migration path for the next generatio

March 12, 2018
An effective E-911 implementation doesn't just happen; it takes a solid strategy. Tune in for tips from IT expert Irwin Lazar, of Nemertes Research.
March 9, 2018
IT consultant Steve Leaden lays out the whys and how-tos of getting the green light for your convergence strategy.
March 7, 2018
In advance of his speech tech tutorial at EC18, communications analyst Jon Arnold explores what voice means in a post-PBX world.
February 28, 2018
Voice engagement isn't about a simple phone call any longer, but rather a conversational experience that crosses from one channel to the next, as Daniel Hong, a VP and research director with Forrester....
February 16, 2018
What trends and technologies should you be up on for your contact center? Sheila McGee-Smith, Contact Center & Customer Experience track chair for Enterprise Connect 2018, gives us the lowdown.
February 9, 2018
Melanie Turek, VP of connected work research at Frost & Sullivan, walks us through key components -- and sticking points -- of customer-oriented digital transformation projects.
February 2, 2018
UC consultant Marty Parker has crunched lots of numbers evaluating UC options; tune in for what he's learned and tips for your own analysis.
January 26, 2018
Don't miss out on the fun! Organizer Alan Quayle shares details of his pre-Enterprise Connect hackathon, TADHack-mini '18, showcasing programmable communications.
December 20, 2017
Kevin Kieller, partner with enableUC, provides advice on how to move forward with your Skype for Business and Teams deployments.
December 20, 2017
Zeus Kerravala, principal analyst with ZK Research, shares his perspective on artificial intelligence and the future of team collaboration.
December 20, 2017
Delanda Coleman, Microsoft senior marketing manager, explains the Teams vision and shares use case examples.
November 30, 2017
With a ruling on the FCC's proposed order to dismantle the Open Internet Order expected this month, communications technology attorney Martha Buyer walks us through what's at stake.
October 23, 2017
Wondering which Office 365 collaboration tool to use when? Get quick pointers from CBT Nuggets instructor Simona Millham.
September 22, 2017
In this podcast, we explore the future of work with Robert Brown, AVP of the Cognizant Center for the Future of Work, who helps us answer the question, "What do we do when machines do everything?"
September 8, 2017
Greg Collins, a technology analyst and strategist with Exact Ventures, delivers a status report on 5G implementation plans and tells enterprises why they shouldn't wait to move ahead on potential use ....
August 25, 2017
Find out what business considerations are driving the SIP trunking market today, and learn a bit about how satisfied enterprises are with their providers. We talk with John Malone, president of The Ea....
August 16, 2017
World Vision U.S. is finding lots of goodness in RingCentral's cloud communications service, but as Randy Boyd, infrastructure architect at the global humanitarian nonprofit, tells us, he and his team....
August 11, 2017
Alicia Gee, director of unified communications at Sutter Physician Services, oversees the technical team supporting a 1,000-agent contact center running on Genesys PureConnect. She catches us up on th....
August 4, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, has lately been working on integrating enterprise communications into Internet of Things ecosystems. He shares examples and off....
July 27, 2017
Industry watcher Elka Popova, a Frost & Sullivan program director, shares her perspective on this acquisition, discussing Mitel's market positioning, why the move makes sense, and more.
July 14, 2017
Lantre Barr, founder and CEO of Blacc Spot Media, urges any enterprise that's been on the fence about integrating real-time communications into business workflows to jump off and get started. Tune and....
June 28, 2017
Communications expert Tsahi Levent-Levi, author of the popular BlogGeek.me blog, keeps a running tally and comprehensive overview of communications platform-as-a-service offerings in his "Choosing a W....
June 9, 2017
If you think telecom expense management applies to nothing more than business phone lines, think again. Hyoun Park, founder and principal investigator with technology advisory Amalgam Insights, tells ....
June 2, 2017
Enterprises strategizing on mobility today, including for internal collaboration, don't have the luxury of learning as they go. Tony Rizzo, enterprise mobility specialist with Blue Hill Research, expl....
May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.