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Examining the Magic Quadrant for UCaaS

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Gartner Research just released its 2020 Magic Quadrant (MQ) for UCaaS report. The MQ is an influential annual report that plots most of the major UCaaS providers on a two-axis graph: completeness of vision and ability to execute. The providers in the upper right, known as the Leaders quadrant, have the most complete vision for the future and the best ability to deliver on it.
 
This year, 13 providers are included in the report, five of which are in the Leaders quadrant. The same four as last year: 8x8, Cisco, Microsoft, and RingCentral with the addition of Zoom.
 
There are several differences in this year’s report, likely attributable to some additional authors. This year’s analysts offer three strategic planning assumptions. The first is that at least 5% of an organization’s on-site employees will be switched to remote working roles — I’d put emphasis on the “at least.” They also see an increase in “direct cloud connectivity” to UCaaS providers. Certainly, there has a shift away from OTT. Gartner also predicts that by 2024, 74% of new UC licenses will be UCaaS licenses, up from 48% in 2019. In other words, cloud adoption is accelerating. That’s aggressive but plausible.
 
There is no mention of last year’s planning assumption that by 2023 40% of new licenses would be in an Office 365 or G Suite bundle, which seemed very aggressive. Considering how there are now five Leaders (and Google isn’t one of them), perhaps they reconsidered.
 
Understanding the Report
The MQ reports are very successful templates that can be applied to hundreds of sectors and provide a great starting point in understanding the vendor landscape. Gartner follows a detailed process to complete these reports that evaluates market data, information from the providers, and customer interviews. The reports offer an informed opinion on the relative positioning of the covered providers.
 
Unfortunately, a lot of the analysis that goes into these reports is kept confidential. This makes it difficult to apply the report’s findings to specific scenarios. For example, an organization might value global reach or advanced telephony features, but there’s no way to know how the analysts weighted those categories in this report.
 
Furthermore, the slippery definition of UCaaS also complicates matters. This report defines UCaaS as voice, messaging, and meetings and offers an analysis of providers that offer these three services. But some organizations value fewer servers and some more. For example, an organization that uses Slack may only value UCaaS for voice and meetings. Other organizations may want to include contact center or CPaaS in their requirements. In the MQ for UCaaS, CCaaS and CPaaS are positioned as optional services, yet “contact center” appears 26 times, mostly within provider strengths and cautions.
 
These sectors clearly overlap, but you really must know what you want bundled. Gartner offers other more specialized reports. Earlier this week, Gartner published its MQ for CCaaS. The report included 12 providers, two of which are in the UCaaS report. Among the recommendations, organizations should include workstream collaboration solutions (messaging) when creating a customer service strategy. Last week, Gartner published a Magic Quadrant for Meetings Solutions that included 15 vendors —five of which are in the UCaaS report.
 
Another consideration is that the UCaaS report only included providers that own and control their core technologies. This eligibility policy excludes several very good providers and creates a gap in regions that don’t have such providers create their own software. A multinational organization with offices in India, Brazil, or Turkey may favor a UCaaS solution that local carriers can host, such as those from Cisco.
 
The MQ UCaaS report offers a lot of valuable information, but you should understand its limitations, and it isn't a definitive guide for all situations.
 
The Dots
I know that these reports are difficult to produce and done with extraordinary due diligence, and they provide a great canvas to share my opinions.
 
First, I think Zoom deserves a hat tip. Zoom Phone made it into the Leaders quadrant before its second birthday, an extraordinary accomplishment. Oddly, Zoom received a caution that its calling plans were only available in 42 countries ( which it already increased to 43). For comparison, Microsoft Teams received a similar caution for supporting calling plans in just 11 countries.
 
There are a few areas where the Gartner analysts seemed too generous. Google, for example, was rated as the third highest provider for its ability to execute — that’s questionable to me. There were very few changes from Google last year regarding voice, messaging, and meetings. There have been some recent improvements, but that was after the May deadline Gartner imposed.
 
Microsoft has come a long way with Teams, but there is a dissonance between its limited telephony features and its upper right placement. Teams is very strong in messaging and meetings but relatively weak in telephony. To be that close to RingCentral suggests that messaging and/or meetings were given much stronger weight than voice. That’s further validated as three of the four Cautions listed for Teams are voice-related. Regardless, it seems odd for Teams to be in one of the top positions in a UCaaS study with such limited telephony.
 
I was surprised that Vonage wasn’t rated higher on Completeness of Vision. Vonage was the first UCaaS provider on this report that expanded into telephony, messaging, meetings, CCaaS, and CPaaS (and AI). It expanded into CPaaS when it acquired Nexmo back in 2016. Since then, we have seen several other providers follow that path. Vonage preaches communications-enabled business processes and is included in the CCaaS report.
 
Dialpad also seemed low on the vision axis. Dialpad was early with AI and among the first to introduce entire call transcriptions in 2018. It was early with SMS integration too and has done well internationally with localized versions that includes Japan — a very difficult expansion market. I expect its position will improve next year considering its successful investment round and acquisition of Highfive.
 
Actually, there’s a pretty consistent pattern in this report that suggests voice wasn’t given much weight this year. That goes back to defining UCaaS. Historically, it was voice-centric, and if anything, it dragged meetings. For many of these providers today, it’s meetings sometimes dragging voice.
 
The de-emphasis of voice is certainly reasonable for a 2020 report. It will be interesting to see if that holds up after the pandemic. I still expect meetings to remain important, but with everyone at home this year, enterprise telephony is just as important.
 
It is pretty extraordinary to me how much the industry has changed. Microsoft and Zoom are Leaders with products that didn’t exist a few years ago. Cisco is there largely due to its 2018 BroadSoft acquisition. 8x8 and RingCentral have endured well, but both completely changed their approach to meetings in the past few years.
 
Dave Michels is a contributing editor and analyst at TalkingPointz.

Comments

Hi Dave, I think many would join me in asking you to expand on your comments that "Teams is very limited in Telephony," paraphrasing. Not because I agree, or disagree, I would just love to hear more of what your perspective is, and the specifics you had in mind in making that comment. I suspect your insight would be worthwhile to hear in further detail. Thanks!