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State of the UC Market

In preparation for my Unified Communications Market Update session at Enterprise Connect (Tuesday March 27 at 3:45), I've updated my UC market numbers--again. As most U.S. Presidents say during their State of the Union addresses, I can attest that the state of the UC market is strong. While 2010 was not a banner year, mostly because of the worldwide economic downturn, things picked up in 2011, and I expect this momentum to continue for the next few years.

In 2008 and early 2009, the UC market was starting to pick up steam, with companies trying out Microsoft OCS and IBM Lotus Sametime, as well as UC clients and servers from the various switch vendors. But the spending significantly slowed down in the in the middle of 2009 during the recession, and didn’t pick up again until late 2010/early 2011.

As many of you know, forecasting the UC market is no piece of cake. Many vendors don't yet provide or break out UC shipment data to analysts, or they just call unified messaging and conferencing sales UC sales. Many vendors include all of their IP-PBX shipments in their UC data, but there’s no way of knowing whether those IP-PBXs are being used as part of a UC solution. The same is true for IM and presence; only a small portion of the enterprise IM/presence seats or licenses shipped are used as part of a UC solution, as opposed to being used on a standalone basis.

So, in order to measure the UC market, I've developed a methodology for determining what I call the "True" UC market, as opposed to the Total or UC-Enabled Market. The Total or UC-Enabled market includes all the revenues for IP-PBXs, unified messaging, conferencing, instant messaging, etc., added together, providing the total potential UC opportunity. The net or "True" UC market is the sub-segment of UC that is being used as part of a UC solution.

Source: COMMfusion LLC March 2012

In 2011, the total or UC-capable worldwide UC market grew by 8%, while the net or true UC market increased by 20% (note: this market is starting from a much smaller base). The key drivers behind this growth are, no surprise, the need to support mobile workers regardless of where they’re located and the device they're using, and the need for collaborative tools within the organization. The BYOD trend is having a big impact on the mobile tools that companies are deploying, and this will continue for the foreseeable future.

When looking at the individual elements or components that make up a UC solution (UM, conferencing/collaboration, IM/presence, call control/IP-PBX/UC servers, and UC clients), the component showing the most growth is conferencing/collaboration. More and more companies are moving to bring conferencing capabilities in house as part of an overall UC solution, giving their users easier access to audio, web, and video conferencing. Web conferencing, as well as collaboration tools such as document sharing and shared workspaces, are being purchased and deployed at increasing rates, since more workers are remote and/or geographically distributed, and need these tools to be more effective. Desktop and mobile video are showing strong growth and this will accelerate in the next few years, especially since most if not all new laptops now have built in video, and tablet devices are becoming key business tools.

Mobile capabilities, such as mobile extension and single-number reach are also growing significantly for similar reasons. As the number of people working remotely and away from the office continues to rapidly increase, the need to be in touch and have access to their enterprise communication capabilities increases. All UC vendors are adding mobile clients that help mobile workers stay in touch with customers, partners, suppliers, and colleagues regardless of where they are or what device they're using.

This is only a peek into the forecast. I'll be sharing greater detail about the market numbers, solution categories, and forecasts, as well as information about the trends, the players, and other issues impacting the UC market at Enterprise Connect. Hope to see you there!