At Frost & Sullivan, we recently completed a study that provides a detailed overview of the state of the global cloud meetings and team collaboration market. We analyzed these categories:
- the mature, but still viable stand-alone audio meetings market
- the evolving cloud web/video meetings market
- the booming team collaboration services market
Besides the fact that I really enjoyed having conversations with more than 50 cloud meetings and team collaboration market providers, seeing how the market continues to evolve shaped by newer technologies, emerging providers, strategic consolidation, and newer generations of work styles is fascinating.
What follows is a summary of our main findings in the study.
Strategic Imperatives
The cloud meetings and team collaboration services market continues to evolve with participants either opting to beef up their entire communications and collaboration portfolios or enhance their best-of-breed/point solutions to better compete in an ever-more crowded market. Simplicity, intuitiveness, ease of use, extensibility, reliability, security, control, interoperability, and speed of innovation are the key characteristics that providers must focus on when evolving their cloud meetings and team collaboration portfolios. Successful providers will lead with the latest innovations, including: AI and machine learning; internal and external team collaboration capabilities; gamification; analytics; and enterprise social features. Also, the need to extend the meetings and team collaboration experience to more environments and target markets, including meeting spaces/huddle rooms and firstline workers, is becoming crucial for future success.
Stand-alone Audio Meetings
Revenue from stand-alone audio meetings continues to decrease. The falling trend that started around five years ago continues to exacerbate every year. Market revenue is expected to decline considerably at a compound annual growth rate (CAGR) of -30.6% from 2018 to 2025. Price compression and user migration to integrated multimedia meeting services and all-in-one UC-as-a-service (UCaaS) solutions will continue to impact stand-alone audio meetings.
Cloud Web/Video Meetings
Cloud web/video meeting revenue continues to grow despite its maturity. The market is expected to continue on a growth track with revenue CAGR of 9.9% from 2018 to 2025. The changing workplace demographics, combined with technology advancements enabling portability and reduced cost of delivering video, are making rich group interactions using integrated media mainstream and ubiquitous.
Team Collaboration Services
We expect team collaboration services market revenue to reach $2.46 billion in 2020 and enjoy a noteworthy CAGR of 33.4% from 2018 to 2025. Key drivers that will contribute to the growth of team collaboration services include:
- the rise of persistent chat rooms as a new collaboration modality for ad-hoc team interactions
- the need for teams to access, organize, and synthesize information in structured collaboration hubs
- the desire to replace email’s inefficiencies with tools that enable better team coordination
- the searchable and permanent nature of conversations in team spaces
- the continuous innovation enriching team collaboration service offerings
In terms of usage, daily active users of team collaboration services increased by 93.3% to 25.3 million from 2017 to 2018. As more business users become accustomed to persistent messaging services for team work, daily active users of team collaboration services are expected to increase rapidly, reaching 247.6 million daily active users by 2025.
Competitive Landscape
The global cloud meetings and team collaboration services market visibly transforms year over year.
Cisco and Microsoft continue to disrupt the enterprise communications and collaboration market by offering all-in-one communications and collaboration services that include a comprehensive set of productivity tools, posing a threat to smaller competitors. The two providers already include unlimited video meetings in their enterprise subscriptions and use team collaboration interfaces as a center piece of their offerings.
Video meeting providers, such as Zoom and BlueJeans, disrupted the market significantly with frictionless video collaboration services that redefined cloud web/video meetings in terms of quality, simplicity, versatility, and value. While both strategically integrate with main team collaboration providers, Zoom also already offers its own team messaging and chat functionalities. Both have grown at a rapid pace.
Team collaboration providers have emerged in the past five years to create a new category of software focused on communications and collaboration around projects or activities. Many of these team collaboration providers already include one-to-one or limited group video calls as part of their plans, while others, such as Slack, integrate with third parties to facilitate large web/video meetings.
Enterprise telephony-centric providers have moved their stand-alone communications portfolios to all-in-one UCaaS licenses, with many introducing home-grown, scalable cloud web/video meetings and team collaboration offerings that directly compete against existing providers.
With rapidly changing and evolving market dynamics, all major enterprise communications and collaboration providers have considerably repositioned their value propositions to fit evolving workplace requirements. As a result, significant price pressures and market consolidation are inevitable. A steady trend of mergers and acquisitions is anticipated. The winning vendors will be those that deliver an end-to-end platform or a point solution that complements industry-leading platforms.
Growth Opportunities
In the report, Frost & Sullivan identified 15 different growth opportunities cloud meetings and team collaboration providers could leverage to grow their businesses more effectively. Enterprise buyers should be aware of how these might affect the products they select.
The list comprises multiple factors, from key characteristics that an offering must have in order to be successful in a crowded market (e.g., ease of use, security and compliance, app/service integration, and mobile offering), to advanced elements that could visibly enhance a current provider’s offering (e.g., AI, gamification elements, analytics, and enterprise social), to specific growth areas that could extend the cloud meetings and team collaboration providers’ addressable market (e.g., meeting spaces/huddle rooms, firstline workers and industries, and external team collaboration). Finally, and among the growth opportunities, Frost & Sullivan has identified important brand and demand focal points (e.g., channel strategy, innovation and transformation, and social media marketing) that cloud meetings and team collaboration providers must address to succeed.
If you wish to obtain the complete market analysis, do not hesitate to
contact me.
