Unified Communication as a Service (UCaaS) Market Size, Share & COVID-19 Impact Analysis, By Component (Telephony, Unified Messaging, Collaboration Platforms, Conferencing, and Others), By Delivery Model (Managed Services and Hosted/Cloud Services), By Enterprise Type (Large Enterprises and Small and Medium-sized Enterprises (SMEs)), By Vertical (BFSI, IT and Telecommunications, IT-enabled Services (ITeS), Education, Retail and Consumer Goods, Government and Defense, Healthcare, and Others), and Regional Forecast, 2023-2030

The global Unified Communication as a Service (UCaaS) market size was valued at USD 28.43 billion in 2022 and is projected to grow from USD 32.01 billion in 2023 to USD 85.77 billion by 2030, exhibiting a CAGR of 15.1% during the forecast period.

Unified Communications as a Service (UCaaS) is a cloud delivery service model that provides communication & collaborative application services via telephony, video, and chat channels. Unified Communication as a Service helps people to carry the communication service across the globe without considering geographic and device boundaries. It helps to boost employee productivity and improves customer satisfaction.

Businesses worldwide are adopting Unified Communication as a Service platform to leverage services such as video & audio conferencing, messaging, and other collaboration tools. The advancement in cloud infrastructure has extensively driven the demand for unified communication services.

Also, the increasing adoption of the Communications Platform as a Service (CPaaS) and Application Program Interfaces (APIs) are expected to drive the growth of this market. Further, innovative technologies such as Artificial Intelligence (AI), Machine Learning (ML), voice assistance, and others empower unified communication services.

COVID-19 Impact

Remote Working during COVID-19 Pandemic Boosted Demand for Unified Communications

Since the beginning of the COVID-19 pandemic, organizations globally shifted to remote working platforms to safeguard employee safety and diminish COVID spread. Since employees worked from their homes, there was a sudden rise in demand for online communication and collaboration platforms equipped with advanced technology. The impact of COVID-19 in the market has been impartial, with components witnessing slight declining demand across the region during the pandemic.

An increase in distance learning and work from home guidelines further enhanced the adoption of services. This resulted in the enterprises’ swift shift to the cloud service model to manage their teams and increase employee productivity. It further escalated the consumption of enterprise communications services. This way, the COVID-19 pandemic created new growth opportunities for industry players.

In addition, nationwide lockdowns resulted in school closures, which had a tremendous impact on the global education scenario. According to a blog by World Economic Forum, since April 2020, around 1.20 billion scholars in more than 186 countries have been impacted by the unpredicted school closures. In the provision of the pandemic situation, governments globally have started supporting digital learning approaches. The provider in the market is focused on providing superlative digital learning experiences through several Unified Communication as a Service platform such as Zoom and others.

LATEST TRENDS

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Integration of Unified Collaboration Tools with Programmable Capabilities is an Emerging Trend

Key market players utilize various tactics to provide end-users with effective communication and collaboration tools and subscription models depending on usage and user.

As a result, the Unified Communication as a Service portfolio is augmented with innovative features, services, and functionalities. Further, key players have initiated integrating programmable communication and collaboration capabilities into their current UCaaS offerings. These strategies would assist providers in catering to customized demand across industries such as government, healthcare, and corporate.

Moreover, key companies, such as Cisco System, Inc., Nice Ltd., and others, are widening their offerings by integrating with capabilities such as Communications Platform as a Service (CPaaS), Contact Center as a Service (CCaaS), and others. The integration and convergence of unified communication services with programmable capabilities are likely to drive the Unified Communication as a Service market growth.

DRIVING FACTORS

Adoption of Distributed Workforce and Remote Work Approaches to Accelerate Demand 

The increasing adoption of smart mobile devices, and advancements in collaboration tools, enable remote work and distributed workforce strategies. Also, organizations are implementing a ‘Bring Your Own Device’ (BYOD) policy across their business units. This strategy will assist organizations to increase productivity, improve internal communication, and eliminate additional costs. For instance, according to Bitglass data, around 85% of companies already permitted their employees to Bring Your Own Device (BYOD) environments for employees and partners. This would create market opportunities for key players to expand their product offerings.

Rising Usage of API-driven Programmable Communication to Aid Market Growth

Business applications are enabled with audio, messaging, programmable video, and other services to automate the communication process. These built-in features enable developers to focus on the application's most important key aspects. Thus, the market will likely show exponential growth by the increasing significance of API-driven programmable communication features. For instance,

• Key players such as Avaya, Inc. and IntelePeer Cloud Communications are currently focused on developing innovative API-based programmable solutions to streamline communication and complex business processes.


• Also, key players such as Twilio, Inc. and Vonage Holdings Corp. are strengthening their growth and innovation indices through developing API-driven programmable communication solutions.

RESTRAINING FACTORS

Data Security Concerns and Regulatory Risks to Restrict Adoption

Ideally, Unified Communication as a Service (UCaaS) providers should offer security to organizations’ data through their own severely controlled data centers. However, not all unified communication service providers possess their data centers. This might result in concerns regarding data security breaches and regulatory risks. The lack of remote backups and various power sources may also impact business risk and compliance laws. Also, reselling services hosted at a third-party data center is a major security concern limiting unified communication service adoption.

SEGMENTATION

By Component Analysis

Telephony Segment to Grow Rapidly Backed by Cloud Service

Based on component, the market is segregated as telephony, unified messaging, collaboration platforms, conferencing, and others (reporting & analytics).

Among these, the telephony segment is likely to hold the major share of the market. Owing to the transformation of the enterprise communication infrastructure, the demand for cloud (IP) telephony is escalating. The market's growth has been assisted by enterprises switching from traditional PBX telephone systems to Voice over Internet Protocol (VoIP) solutions.

Advanced collaborative tools empower employees to work efficiently. These tools augment employee productivity by aligning with each team member. Also, the adoption of remote working is likely to drive the adoption of collaboration tools. According to Gartner, by the end of 2021, 51% of global knowledge workers will be working remotely.

Conferencing is set to be the fastest-growing segment throughout the forecast period. Increasing use of cloud-based web conferencing solutions will help to boost the market growth.

By Delivery Model Analysis

Adoption of Conferencing Services to Drive Hosted/Cloud Services Segment Growth

Based on delivery model, the market is bifurcated into managed services and hosted/cloud services.

The hosted/cloud services segment is likely to dominate the market. Innovative cloud services, such as cloud-based conferencing and cloud telephony, are the key factors driving the adoption. Managed services include features such as customizations, dashboards, multiple functions, analytics, portals, and others. Owing to this, managed service market size is likely to grow with a significant CAGR during the forecast period.

By Enterprise Type Analysis

Small and Medium-Sized Enterprises Segment to Grow with a High CAGR Fueled by IT Spending 

Based on enterprise type, the market is bifurcated into small and medium-sized enterprises and large enterprises.

Small and medium-sized enterprises segment is projected to exhibit a significant CAGR, even after being impacted by the COVID-19 pandemic. According to IDC, small and medium firms have concentrated their total IT spending by 4.9% and 2.7%, respectively. This alteration in IT spending is projected to lead to a gradual transition by SMEs from traditional applications to cloud-based UCaaS.

Most large enterprises, on the other hand, have adopted approaches such as work from home, Bring Your Own Device (BYOD), and remote working. These approaches rely on advanced collaborative communication. Thus, the large enterprise segment is likely to fuel the Unified Communication as a Service market growth significantly.

By Vertical Analysis

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Digital Transformation & Remote Working to Favor Growth of IT & Telecommunication Segment

By vertical, the market is segmented into BFSI, IT and telecommunications, IT-enabled Services (ITeS), education, retail and consumer goods, government and defense, healthcare, and others (media and entertainment, manufacturing).

Among them, the IT & telecommunication segment is likely to hold the major share in the market. The growth is due to businesses’ digital transformation that has led to the robust adoption of cloud-based unified communication services. Also, work from home, remote working, and others further stimulate the demand for IT-enabled services across the sector. Hence, IT and telecommunication is a significant segment contributing to the growth.

The retail and consumer goods segment is likely to hold a significant market share owing to the adoption of unified communication services to enhance customer experience. The technology is helping retailers to enhance their customer interaction through a cost-optimized and collaborative platform. Such advantageous factors drive growth across the retail and consumer goods industry.

REGIONAL INSIGHTS

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

North America holds a major global Unified Communication as a Service market share, owing to the adoption of advanced business communication services. End-use enterprises across this region have already adopted services such as video & audio conferencing, chat, mail, voice, and others, as an integrated part of their operations.

The adoption of trends such as ‘Bring Your Own Device’ (BYOD), tele-presence systems, and others are the key factors driving the growth of the market in the region. Apart from this, the presence of key players such as IBM Corporation, Verizon Communication Inc., Google LLC, Avaya Inc., and others are further supporting the growth.

Europe is likely to exhibit moderate growth during the forecast period. The growth is owing to the adoption of communications tools, usage of pay-per-use model, increasing mobility trends, and others across the education and healthcare sector. Additionally, the popularity of cloud communication is further stimulating the demand for unified communication across European countries.

Asia Pacific is likely to grow with the highest CAGR during the forecast period. The growth is owing to the increasing demand for internet-based communication services across small and medium enterprises. Communication services, including Voice over Internet Protocol (VoIP), audio & video conferencing, are highly adopted across countries such as India, South Korea, China, Japan, Oceania, and others. Also, the large cloud traffic across the region is likely to drive the demand for Unified Communication as a Service services.

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The growing demand for advanced collaborative tools and the rising adoption of remote working are the key factors driving the market across Latin America. The Middle East is anticipated to be the most opportunistic region for the market to grow, owing to adopting Unified Communication as a Service based on the cloud platform.

KEY INDUSTRY PLAYERS

Collaborations and Partnerships are Key Strategies Adopted by Players to Advance their Offerings

Key players primarily focus on completing strategic collaborations and partnerships to enhance their UCaaS product and service portfolios. Besides, investment across customized product and service launches is helping key companies to strengthen their market positions. In the scope of the study, we have included a few key players and their offerings such as UCaaS solutions and services by Wipro Limited, Unified Communications Solutions & UCaaS Platform by Tata Communications Limited, Unified Communications as a Service by RingCentral, and others. Further, companies have extended their partnerships with cloud service providers to optimize performance.

LIST OF KEY COMPANIES PROFILED:

• RingCentral, Inc. (U.S.)


• ALE International (France)


• Sify Technologies, Ltd (India)


• Tata Communications, Ltd. (India)


• Verizon Communication, Inc (U.S.)


• Metaswitch Networks Ltd (U.K.)


• Mitel Networks Corporation (Canada)


• 8x8, Inc. (U.S.)


• Zoom Video Communications, Inc. (U.S.)


• Vonage Holdings Corp. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• February 2023 – Zoho Corporation launched a unified communications platform named Trident to deliver easy communication by combining audio/video calls, mail, messages, calendar, and more channels to provide a comprehensive customer experience.


• June 2022 – Acronym Solutions Inc. introduced a cloud-hosted Unified Communications as a Service solution that helps to connect employees and customers to work together and aims to enhance business growth by delivering valuable insights to the customers present across the globe.


• November 2021 – Tata Communications deployed “GlobalRapide,” an end-to-end managed Unified Communications as a Service solution for enterprises to offer suitable collaboration and communication platforms to the users.


• March 2021 – RingCentral, Inc. partnered with Ecotel Communication AG to develop a unified cloud communication solution. The platform offers clients unified functionalities, team messaging, video meetings, and a cloud phone system.


• February 2021 – Masergy developed Unified Communications as a Service (UCaaS) in collaboration with Cisco Webex. This solution is integrated with network services, which can be used for calling and messaging to provide a better end-user experience.

REPORT COVERAGE

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The research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and prominent applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, it encompasses several factors that have contributed to the growth of the market in recent years.

Report Scope & Segmentation