No Jitter is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

UCaaS Market Bolsters Leaders in Different Segments: Page 2 of 2

Continued from Page 1

Mid to Large Market: 8x8 Enjoys First Mover Status

On-premises PBX deployments continue to dominate in the mid-market, with little UCaaS penetration in companies that have between 100 and 1,000 seats. That said, 8x8 finds itself the installed base market share leader in the UCaaS mid-market segment based on subscribers. It achieved this ranking thanks to its first-mover advantage and early investments into features that appeal to this upmarket segment.

As vendors strengthen their offerings to appeal to this segment, they are scoring more and more wins in this highly sought-after segment. In the long term, this activity could squeeze the lead 8x8 has today. Some fellow competitors in the SMB segment are very aggressive here, looking to translate their successes from SMB to bigger and higher-paying customers.

Fuze Strengthens Large Enterprise Leadership

Fuze has a story all to its own. The Fuze that exists today is a combination of two earlier pioneering collaboration ventures: ThinkingPhones and FuzeBox. The underlying call control that is part of the Fuze platform today derives from the foundational technology built out by ThinkingPhones. This cloud PBX platform found modest success with the sub-100 seat market when ThinkingPhones was a standalone UCaaS provider. However, after its corporate transformation, fueled by the merger, strategic change of direction, and significant financial investment, Fuze today is a serious UCaaS contender in the large enterprise category of deployments with more than 1,000 seats.

As a pre-IPO player, Fuze has been influential in investing in customer acquisition and shrinking sales cycles, which today translates into its large enterprise leadership, measured at more than 2x over its closest competitor. More impressively, Fuze has also managed consistent increases in its market share in this segment.

Microsoft: Where the Heck Is It?

Despite Microsoft's bold moves into the UCaaS space, including replacing Skype for Business Online with Teams, it's yet to penetrate the Top 10 UCaaS vendor list. In fact, given that Microsoft has announced 120 million active users on Office 365, our research shows penetration rate of UCaaS among this base remains less than 1%.

When Microsoft entered the highly fragmented under 100-seat market, it did so with a UCaaS solution that at the time wasn't very feature-rich. The majority of providers were able to position their offerings competitively against Microsoft, making the company a non-disruptor up to this point.


Understanding terminology is important in navigating the abundance of marketing confusion. Here are Synergy definitions for UCaaS and hosted PBX:

UCaaS -- a subscription service whereby a service provider hosts and develops its own proprietary cloud PBX platform, enabling PSTN connectivity and offering an integrated UC applications portfolio stack (conferencing, team collaboration, instant messaging/presence)

Hosted PBX -- a voice service for which service providers utilize third-party softswitch call control technology to build/manage/operate their own, branded hosted PBX voice services. The vendors that provide the call control technology to the service providers include BroadSoft (BroadWorks; now a Cisco company), Cisco (HCS), Genband, Metaswitch, 3CX, and Centile.

Recent roadmap updates from Microsoft seem more promising, but whether it'll be able to consolidate UCaaS into the broader office productivity space is yet to be seen.

UCaaS, the Best Is Yet to Come

By looking at the large size of the existing premises PBX installed base, as well as the changing nature of how organizations communicate internally and with customers and partners, Synergy's research indicates that the UCaaS opportunity couldn't be more promising. Synergy is currently gearing up for its 4Q17 and year-end market share reporting, targeted for end of February, and we're eager to analyze the year-end performances across the vendors, firmographic segments, and geographies.

Other UCaaS vendors we track in our study that we feel are worth mentioning are: Dialpad, Fonality, IP Telecom, Jive, Nfon, Panterra, and Star2Star. Also worth noting again is that Vonage doesn't get full credit for its unique approach to the hosted UC market, where it addresses the hosted UC market with both a UCaaS and hosted PBX platform. In this combined view we would see Vonage with a much larger subscriber base.

Given the continuing acceptance of software as a service as general business practice, and observing continued advancements in cloud communications and connectivity, we believe UCaaS has many years of strong growth and opportunity ahead of it -- and, from all the signs, the best is yet to come.

About Synergy Research Group

For nearly 20 years, Synergy Research Group has published in depth quantitative market reports for a variety of fast emerging technology markets. Synergy's data analysis is published quarterly through standard reports and also made available to its clients via a unique cloud-based research platform, designed specifically for the market intelligence community. A trusted source of accurate market data, Synergy is heavily quoted in the media such as the Wall Street Journal, New York Times, Washington Post, Economist, NPR, BBC, CNN, Financial Times, Forbes, Fortune, Bloomberg, Guardian and many more.

Learn more about Cloud Communications at Enterprise Connect 2018, March 12 to 15, in Orlando, Fla. Register now using the code NOJITTER to save an additional $200 off the Early Bird Pricing or get a free Expo Plus pass.