Team Collaboration Software Market Size, Share & COVID-19 Impact Analysis, By Component (Solution, Services), By Deployment (Cloud, On-premises), By Enterprise Size (Small & Medium-sized Enterprises, Large Enterprises), By End-User (Banking, Financial Services and Insurance, IT and Telecommunications, Manufacturing, Retail and Consumer Goods, Healthcare, Transportation and Logistics, Education, and Others), and Regional Forecast, 2021-2028

The global team collaboration software market size was USD 15.25 billion in 2020. The market is projected to grow from USD 17.15 billion in 2021 to USD 40.79 billion in 2028 at a CAGR of 13.2% during the 2021-2028 period. The global market size is inclusive of several team collaboration tools offered such as IceWarp Mail Server by IceWarp Ltd., Zoom Cloud Meetings by Zoom Video Communications, Inc., among others. The global impact of COVID-19 has been unprecedented and staggering, with team collaboration software and solutions witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a significant growth of 12.3% in 2020 as compared to year-on-year growth during 2017-2019. The steady rise in CAGR is attributable to this market’s demand and growth rate, returning to pre-pandemic levels once the pandemic is over.

The rising trend among companies in implementing intelligent meeting solutions for remote working provides exciting business growth prospects. Modern and creative technology makes seamless collaboration among employees easier and more profitable, stimulates innovation, and provides companies with a competitive edge. In addition, collaboration tools allow participants to record meetings and take points from a meeting that has already been held. The growing need for employees to enter immersive meeting rooms without interruption would further boost the development of the industry. Key players are collaborating with other significant players to provide remote solutions to automate work processes from any region, to collaborate effectively, and to maintain communication among teams.

• For instance, in May 2020, Cisco Systems Inc. acquired BabbleLabs, Inc. to enable businesses and teams to cut down unwanted noise in meetings. With this acquisition, Cisco will use BabbleLabs’s advanced Artificial Intelligence (AI) techniques to enhance the quality of communications in web conferencing applications. 

In countries such as China, India, and Japan, the emergence of the COVID-19 pandemic would accelerate the demand for team collaboration software to efficiently carry out team meetings and conferences. Cloud computing services are being widely used to promote business development in the region. The rising popularity of work from home trends in startups and small and medium-sized companies is also set to contribute to the global team collaboration software market share.

 COVID-19 Impact

Team Collaboration Software to Power Remote Work and Video Conferencing amidst COVID-19 Pandemic

The outbreak of COVID-19 prompted several businesses to take priority in revising their IT strategies. A large number of companies have implemented work from home programs for their workers in order to fight against the threat of coronavirus. Business trips are being cancelled and organizations are gradually preferring audio and video conferences and other platforms for data sharing. Such interactive collaboration systems by making communication safe and cost-effective, will not only help tackle this continuing problem, but will also increase productivity in long-term operation. Although several businesses have seen their stock prices battered by the destruction of the virus, some software providers, such as Zoom, have seen their share value rise considerably.

• According to a blog published by Vyopta Incorporated in April 2020, there has been a 3X increase in the number of participants joining online meetings, as compared to January.

With technological advancements in the enterprise collaboration technology, the adoption of video conferencing and team meeting solutions is expected to increase for effectively communicating with partners, customers, and onshore teams. Corporations that have been proactively investing in virtual communication tools will now prove their operations in the future and maximize the impact of remote work practices. Also, businesses should be assured that the right technological innovations will pave the way to discover new and unexpected opportunities while also enhancing business efficiency.

LATEST TRENDS

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Bring-Your-Own-Device (BYOD) Trend to Bring Substantial Enterprise Benefits and Enhance Productivity

The usage of personal or enterprise-owned devices such as laptops, mobile phones, and tablets has increased enormously in recent years. The integration of such solutions in personal devices can enable employees and businesses to attend conferences and meetings regardless of the place.

In addition to that, the cumulative number of Small and Medium-sized Enterprises (SMEs) are leading to the rising adoption of Bring-Your-Own-Device (BYOD) practices in order to reduce or restrict the initial infrastructure costs. As a result of the rising start-up culture in both emerging and developed economies, BYOD technology will create enormous growth opportunities while ensuring operational flexibility.

• According to a report published by Cisco Systems Inc. in March 2016, companies adopting BYOD technology can save approximately USD 350 per year per employee.


• A global survey conducted by IBM Corporation in March 2019 states that 82% of the workers witnessed high productivity while using their own device and believes that smartphones will play a critical role in the coming years.

Successfully adopting BYOD technology at workplaces is likely to benefit companies in terms of corporate performance, workplace efficiency, and employee satisfaction, thus contributing positively to the global market.

DRIVING FACTORS

Adoption of Collaboration Software and Conferencing Tools among Businesses to Drive Growth

Advanced technologies are playing a crucial role in enabling businesses to create an environment that would encourage employees to achieve business goals with creativity to develop lasting economic values. Digital transformation produces new product and service possibilities that would enable businesses to raise sales significantly and reduce costs by achieving higher performance. The next-generation collaboration and enterprise productivity tools are playing a significant role in establishing efficient business communications that encompasses richer team communication, co-creation, and document sharing. Thus, adoption of advanced technologies such as Machine Learning (ML), Artificial Intelligence (AI), and others have enabled businesses to efficiently manage communication and collaboration between teams. In order to offer companies with better team communication and collaboration tools, key players are launching different work environments. For instance,

• In September 2020, Google launched Google Meet Series One, a new video conferencing hardware solution to effectively manage communication and collaboration.

Collaboration tools deliver a wide range of advantages from cost savings to increased productivity, and enhanced security. These tools allow virtual teams to work together across geographies, functions, and organizations to boost efficiency and innovation. Thus, businesses are shifting from traditional communication techniques to advanced solutions and are building holistic collaboration strategies. The usage of team collaboration software is thereby expected to showcase an exponential growth during the forecast period.

Adoption of Collaboration Tools to Efficiently Manage Projects will Boost Growth

In recent times, the collaboration tools have become the most widely used tools by distributed project teams. Team collaboration software enables businesses to plan and manage all phases of the project and share ideas between all team members. It also helps the team members to make informed choices by combining all the project details. For instance, Asana Groupware provides team management and collaboration solutions that enable project teams to schedule daily meetings and conferences just in one click.

The coordination of project activities among various team members and teams is much easier with collaborative software solutions. The details can be exchanged and deadlines can be set easily so that the management process is highly reliable. Control of the project progress is important for companies for long-term success and to gain a competitive edge. Technology integration plays a significant role in the management of the project phases and makes it possible to ensure that the projects are completed on time. Thus, the adoption of collaboration tools to easily manage projects is expected to contribute to the team collaboration software market growth.

RESTRAINING FACTORS

Risks of Cyber Security Attacks and Loss of Important Data May Hinder Growth

With businesses embracing more diverse interactive technical methods, security issues are growing. For businesses that invest in software, safety is the top priority – this includes tools for collaboration that can accommodate company details, customer data, as well as the latest product ideas in a single platform.

Depending on the configuration of network security, the adoption of collaboration tools may open an insecure channel that can introduce malicious code or other forms of ransomware. It can also open a path for hackers to access the network and compromise personally identifiable information (PPI) or sensitive data that can harm business processes. Some hackers are able to reach corporate websites simply by following the standard web-based protocols. Many applications often collect metadata from the device itself in URLs, so that sensitive data can be exposed unintentionally. This, in turn, is expected to hinder the market growth.

SEGMENTATION

By Component Analysis

Solution Captured Maximum Market Share

Based on component, the global market has been segmented into solution and services.

The solution held the largest market share in 2020 and is expected to maintain its dominance over the forecast period. The market size is inclusive of various team collaboration software and solutions offered by key players such as Microsoft Corporation’s Microsoft Teams, Workplace by Facebook, Oracle Beehive by Oracle Corporation, among others. This growth is mainly due to the rising demand for visual meetings in all the international companies, along with a growing knowledge of the advantages of team collaboration software among businesses. The most significant revenue share was generated in 2020 by the use of team collaboration software for conferencing. Collaboration tools enable data sharing in real time and allow cross-functional teams to remain linked through emails, direct messages, voice mails, and conferences. Effective contact between teams enables the development of content for internal and external audiences, for production and publishing. The ability to monitor different activities, such as meetings and deadlines, allows businesses to work efficiently, thereby enabling corporate adoption.

The services segment is expected to grow at the highest CAGR over the forecast period. Along with solutions, organizations are also offering managed and professional services. Professional services include integration and implementation, training and education, and support and maintenance. Among them, the integration and implementation sub-segment would hold the largest market share in the forecast period.

By Deployment Analysis

Cloud to Grow Significantly Backed by Need to Reduce IT Infrastructure Costs

Based on deployment, the market is segmented into cloud and on-premises.

The on-premises captured maximum market share. The on-premises deployment of collaboration tools guarantees low latency at data transfer levels, which, in turn, allows enterprises gain control over enterprise data. Adopting on-premises implementation mitigates the need to invest in costly internet services that provide companies with cost-saving opportunities and also ensure stable business practices in the event of data failures. These solutions also require greater control of server hardware and versatile storage delivery configuration.

The cloud segment is expected to be the fastest growing segment during the forecast period. This segment comprises of team collaboration tools deployed on cloud environments. For instance, ProofHub, a team collaboration tool offered by ProofHub LLC, is deployed on cloud environment and delivers streamlined experience with a hassle free work management system. The ability of cloud deployment practices to reduce IT infrastructure costs and cost related to staff training is promoting the widespread adoption of this model. In addition, cloud deployment guarantees operational flexibility of the remote task force to access data from any location at any time. The ease with which cloud systems are implemented gives users competitive advantage over peers, offering significant opportunities for development.

By Enterprise Size Analysis

Large Enterprises to Dominate Market Fueled by Demand for Digital Collaboration

Based on enterprise size, the global market is segmented into large enterprises and SMEs.

The large enterprises segment accounted for the largest market share in 2020. The need to initiate digital collaboration among large, dispersed teams and manage projects efficiently is contributing to the growth of this segment.

In the forecast period, the SMEs segment is projected to rise at the highest CAGR. This growth is due to the increasing digitalization of small and medium-sized enterprises. The emergence of virtual business is enabling SMEs to use collaborative software to enhance communication across businesses. Also, the growing demand for collaboration applications across SMEs is driven by the increasing operational costs for managing large offices. The rising BYOD trend in small and medium-sized enterprises would also support the growth of this segment.

By End-User Analysis

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IT and Telecommunications Segment to Show High Growth Backed by Demand for Video Conferencing Solutions

Based on end-user, the market is segmented into BFSI, IT and telecommunications, manufacturing, retail and consumer goods, healthcare, travel and transportation, education, and others.

The IT and telecommunications segment had the largest market share in 2020. The segment covers the team collaboration software adopted by IT and telecom companies. The example includes nTask, a solution offered by nTask that is vigorously adopted by IT companies globally. The adoption of unified communication solutions by IT companies to promote efficient communication and cooperation is set to boost the growth of this segment. In addition, the increased demand among companies for video conferencing solutions to promote the sharing of information is also an important driver of the growth of the segment.

The BFSI sector captured considerable market share in terms of revenue. The trend for digitization in banking among employees in order to increase their production efficiency would provide an impetus for business growth. The emergence of a number of branches and the high demand among policy makers and influencers to engage in meetings and discussions to strategize successful banking systems are further boosting the growth of this segment. Apart from that, the reducing contact time across different departments improves operational efficiency and enhances the ability to generate profit.

The healthcare sector is expected to witness exponential adoption of collaboration tools and will grow at highest CAGR over the forecast period. The growth of the segment would occur on account of rising expenditure in healthcare industry and adoption of collaboration tools to effectively manage communication among healthcare professionals and teams.

REGIONAL INSIGHTS

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Geographically, the market is segmented across five major regions, namely, North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America.

North America dominated the global market in 2020. The growth of the region is mainly owing to the technological advancements and stable economic growth. Organizations in the region are showcasing lucrative growth in the adoption of collaboration and enterprise communications tools for internal team communications and for efficiently carrying out project activities. Businesses are increasing their IT expenditures as a result of enhanced security measures such as data encryption and access to end-to-end transfers, which is expected to have a favorable influence on the market in the area. Moreover, the penetration of high-speed Internet in many countries makes it easier for employees to flexibly use the software in the area, thus raising their demand. The outbreak of the COVID-19 epidemic prompted SMEs and large companies in the region to adopt collaboration tools to meet work from home needs.    

Asia Pacific is expected to be the fastest growing region in the global market in terms of CAGR. The growth is mainly attributed to the increasing investments in advanced technology, availability of cloud service providers, and large number smartphone users in the region. The rapid industrialization in countries such as India and Japan is further strengthening the importance of developing efficient team coordination structures. Also, due to the improving government initiatives such as Make in India and Startup India and the 2018 immigration bill adopted in Japan would aid growth. In addition to this, the emerging trend of BYOD among businesses will have a positive effect on the market growth in this region.

Europe is expected to lead the global market and is set to expand by exhibiting an exceptional CAGR by 2028. The region is one of the most technologically developed regions, mostly because of the highest mobile usage and industrial developments. Furthermore, virtual companies are emerging that would help the businesses to grow in the region.

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In accordance with the increased emphasis on upgrading networking technology to cope with the COVID-19 pandemic, the Middle East and Africa and Latin America accounted for a substantial revenue share in 2020. In the future years, the regional market will be driven by continued enterprise digitalization.

KEY INDUSTRY PLAYERS

Major Players to Focus on Mergers to Cater towards Rising Demand among Consumers

Companies operating in the market such as Oracle Corporation, Slack Technologies, Inc., TeamViewer GmbH, Zoom Video Communications, Inc., Trello (Atlassian Corporation Plc), Cisco System, Inc., LogMeIn, Inc., nTask, Citrix Systems, Inc., AT&T, Inc., among others are focused on developing and offering different types of software and tools. Also, the high competition in the market is forcing companies to adopt different business strategies to gain optimal market share.

• June 2020 - Slack Technologies LLC, Salesforce company launched Slack Connect to facilitate the communication among enterprises. Slack Connect is a secure communication environment offered by the company to help companies to move conversations with clients, external partners, vendors, into slack solution.

LIST OF KEY COMPANIES PROFILED:

• Microsoft Corporation (Washington, United States)


• TeamViewer GmbH (Göppingen, Germany)


• Slack Technologies, Inc. (California, United States)


• Trello (Atlassian Corporation Plc) (Sydney, Australia)


• Cisco System, Inc. (California, United States)


• Zoom Video Communications, Inc. (California, United States)


• LogMeIn, Inc. (Massachusetts, United States)


• nTask (California, United States)


• Citrix Systems, Inc. (Florida, United States)


• AT&T, Inc. (Texas, United States)

KEY INDUSTRY DEVELOPMENTS:

• December 2020 – Adobe Inc., a global technology company acquired Workfront, a software company that offers web-based work management software. Through this acquisition, the companies are planning to offer a suite of team management, collaboration, and planning support solutions.


• September 2020 — Google LLC and Cisco System, Inc. announced strategic partnership to provide interoperability for their different conference room hardware and collaboration software solutions to serve the growing need for team collaboration and communication tools.

REPORT COVERAGE

An Infographic Representation of Team Collaboration Software Market

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The global market research report provides an in-depth analysis of the market. It focuses on key aspects such as leading companies, product Industry, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several key factors that have contributed to the market's growth over recent years.

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