UCaaS Market Report – The Industry that is Growing Exponentially

The global unified communications market size is expected to reach USD 167.1 billion by 2025. In 2020, this market has grown 29.1% and an average of 7.1% quarter over quarter, which also is equivalent to $13.1 billion according to Worldwide Quarterly Unified Communications & Collaboration Q View

As many trends have emerged in the last couple of years and even boosted by the pandemic, the use of cloud-based solutions is expected to positively impact market growth. 

Vendors and service providers have also experienced an exponential growth in the number of video and collaboration end users last year. During this year and 2022, many reports forecast an increase in the use of UC solutions by businesses of all size segments with interest in UCaaS, digital transformation, and mobile applications.

Due to intense competition among market players, they are striving to offer diverse solutions along with several features such as email platform, video & audio conferencing, unified messaging, and instant messaging. Hence, several features offered by industry players are expected to boost the unified communication market growth over the forecast period.

UCaaS Market Growth

ucaas growth graphic

All analysts agree that there will be a huge growth in the industry. For example, Gartner expects a 10.9% growth for CRM software between 2018 and 2024, while the IDC is expecting 12.2% growth for Customer Service Applications between 2018 and 2023.

It’s important to mention that some analysts have seen a decline in the traditional telecom market. This suggests that businesses are moving their in-house Private Branch Exchange to the cloud.

Some UCaaS market movements:

  • UC collaboration increased by 48.0% reaching $6.2 billion at the end of 2020. 
  • IP Phones revenue declined by 22.8%, reducing its market to $1.9 billion in 2020.
  • Enterprise Videoconferencing Systems increased by 12.4%, reaching $2.6 billion in 2020.
  • Hosted Voice/UC Public Cloud increased its revenue by 21.2%, reaching $16.4 billion in 2020.

A regional view of the UCaaS Market:

  • In North America, revenue was up 26.1%, reaching $22.9 billion in 2020.
  • Asia/Pacific revenue increased by 28.1%, reaching $8.4 billion in 2020
  • Europe, the Middle East, and Africa revenue increased by 20.9% reaching $14.3 billion in 2020.
  • Latin America revenue increased by 27.6%, reaching $1.6 billion in 2020.

Why is the UCaaS Market growing? 

Many UCaaS solutions are becoming increasingly entwined for the demand for better collaboration in the workforce.

Your UCaaS solution can show you who’s offline and online at any given time.

While cloud technology is growing rapidly in popularity, some organizations are still struggling to move beyond their on-premises strategies. 

For many organizations, it’s no longer a question of “if” they should be moving to the cloud, but “when” they’re going to start their transition.

According to Metrigy’s 2021-2022 global study on workplace collaboration, 47.5% of the 467 companies benchmarked now fully rely on the cloud for their communications needs or run a combination of UC as a service (UCaaS) and on-premises UC. Of the 28.6% still using UC on premises, just over one-quarter (25.4%) are moving to the cloud or evaluating such a transition.

In the last year also, UCaaS providers have rapidly improved their video meeting experiences, adding new features including recording, transcription, and translation, as well as AI-enabled features to improve voice and video quality. 

Most UCaaS vendors now provide a team collaboration experience as the core UI, and at least 57.6% view it as a work hub, meaning that they integrate other apps into team collaboration platforms.

Companies choose collaboration and communication products based on the future direction of the platform. Selecting the right platform helps companies reduce IT costs, reduce IT management overhead, and reduce integration challenges. Moreover, taking a holistic platform approach results in substantial benefits in end-user training, end-user adoption, and finally, business value.

The pandemic also has an impact in the growth of the UCaaS market 

In response to the pandemic, the vast majority of the companies adopted different collaboration applications to help communicate with their team while working remotely. However, this also started the plan of many IT and security leaders to secure those collaboration apps. 

Besides, the work-from-home measurements have created more challenges for IT organizations that have boosted their trust towards UCaaS solutions.

Why should you invest in UCaaS solutions?

One of the main reasons why you need to adopt UCaaS solutions is that you’re falling behind. Other companies are already investing in communication solutions and giving it a huge part of their annual budgets. 

Besides, communication is the number one challenge for teams of any type, especially when companies count on poor communication tools. As employees keep struggling with communication, their performance is affected.

In the same sense, as the remote work environment keeps growing, companies will need to put more attention to the cloud. For example, companies that are already using UCaaS solutions are increasing access to innovative functions not available from legacy tools. (Mitel cloud adoption white paper)

In the Frost and Sullivan eBook, it is mentioned that by this time, already 33% of companies have moved to the cloud, and another 38% are planning to do so in a couple of years. 

Another report from Cleveland Research Company mentions that there is an increasing positive sentiment towards UCaaS. As it is growing at a rate of 20-30% per year, it is pushing more companies to adopt UCaaS technologies to serve their people and clients.

StrataCore can help you make the smartest decision

Finding the best UCaaS solution in a competitive market where all vendors and providers are fighting for your attention can be tough. 

However, we can make this process so easy for your company. At StrataCore we count with a full team of experts that will get you the most suitable solutions at the best prices in the market.

With us, you can save a bunch of time and money. Try us for Free.

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