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The global unified communication as a service (UCaaS) market size was USD 25.85 billion in 2020. The impact of COVID-19 in the market has been impartial, with the product witnessing a slight declining demand across the region during the pandemic. Based on our research, the global market exhibited a substantial growth of 11.9% in 2020, as compared to the average year-on-year growth during 2017-2019. The market is expected to grow from USD 28.96 billion in 2021 to USD 69.93 billion in 2028 at a CAGR of 13.4% during the 2021-2028 period.
Businesses worldwide are adopting unified communication as a service (UCaaS) platforms to leverage services such as video & audio conferencing, messaging, and other collaboration tools. The advancement in cloud infrastructure has driven the demand for unified communication services extensively.
The emerging trend such as distance learning and remote working is supporting the adoption of UcaaS solutions. For instance,
Also, the increasing adoption of the communications platform as a service (CPaaS) and application program interfaces (APIs) are expected to drive the growth of the unified communication as a service market. Further, innovative technologies such as Artificial Intelligence (AI), Machine Learning (ML), voice assistance and others, are empowering the use of unified communication services.
Remote Working during COVID-19 Pandemic to Boost Demand for Unified Communications
Since the beginning of the COVID-19 pandemic, organizations worldwide have shifted to remote working platforms to safeguard employee safety and diminish COVID spread. Since employees have started functioning from their homes, there is a sudden rise in demand for online communication and collaboration platforms equipped with advanced technology.
An increase in distance learning and work from home guidelines has further enhanced the adoption of services. Resulting in the swift shift of enterprises to the cloud service model to manage their teams and increase employee productivity. It is further escalating the consumption of enterprise communications services. This way, the COVID-19 pandemic has 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 preparation for the pandemic situation, governments across the globe have started supporting digital learning approaches. The provider in the market is focused on providing superlative digital learning experiences through several UCaaS platforms such as Zoom and others. For instance,
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Integration of Unified Collaboration Tools with Programmable Capabilities is Emerging Trend
Key market players are utilizing various tactics to provide end-users with effective communication and collaboration tools, as well as 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 unified communication as a service (UCaaS) market growth.
Adoption of Distributed Workforce and Remote Work Approaches to Accelerate Demand
The increasing adoption of smart mobile devices, as well as advancements in collaboration tools, is enabling 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 in increasing productivity, improving internal communication, and eliminating additional costs. For instance, according to Bitglass data, around 85% of companies already permitted their employees to bring your own device (BYOD) environments for both 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 are enabling developers to focus on the application's most important key aspects. Thus, the market is likely to show exponential growth by the increasing significance of API-driven programmable communication features. For Instance,
Data Security Concerns and Regulatory Risks to Restrict Adoption
Ideally, providers in the UCaaS market should offer security to organizations’ data through their own severely controlled data centers. However, not all unified communication service providers possess their own 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 have an impact on business risk and compliance laws. Apart from that, reselling services hosted at a third-party data center is a major security concern that is limiting unified communication service adoption.
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Telephony Segment to Grow Rapidly in the Near Future
Based on components, the unified communication as a service (UCaaS) market is segregated as telephony, unified messaging, collaboration platform, conferencing, and reporting & analytics.
Among these, telephony is likely to hold the major share in 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 are empowering 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.
The conferencing is set to be the fastest-growing segment throughout the forecasting period. Increasing the use of cloud-based web conferencing solutions will help to boost the market growth. According to Gartner, in 2020, end-user spending on cloud-based web conferencing solutions increased by over 25% globally.
Adoption of Conferencing Services to Drive Hosted/Cloud Services Segment Growth
Based on the delivery model, the market is bifurcated into managed services and hosted/cloud services.
Among them, the hosted/cloud services are 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.
Small and Medium-sized Enterprises Segment to Grow Fueled by High IT Spending
Based on the organization size, the market is bifurcated into small and medium-sized enterprises and large enterprises.
The 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 unified communication as a service.
Most of the large enterprises, on the other hand, have adopted approaches such as work from home, bring your own device (BYOD), and remote working. These approaches are relying on advanced collaborative communication. Thus, the large enterprise segment is likely to fuel the market growth significantly.
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, others.
Among them, IT & telecommunication is likely to hold the major share in the market. The growth is owing to the digital transformation of businesses that has led to the robust adoption of cloud-based unified communication services. Also, work from home, remote working, and others are further stimulating the demand for IT-enabled services across the sector. Hence, IT and telecommunication are some of the significant segments contributing to the growth.
Retail and consumer goods are likely to hold a significant market share owing to the adoption of unified communication services for enhancing customer experience. The technology is helping retailers to enhance their customer interaction through a cost-optimized and collaborative platform. Such advantageous factors are therefore driving the growth across the retail and consumer goods industry.
North America Unified Communication as a Service (UCaaS) Market Size, 2020 (USD Billion)
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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 is holding a major share in the global market, 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, mails, voice, and others, as an integrated part of their operations.
The adoption of trends such as ‘bring your own device’ (BYOD), telepresence systems, and other, 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 models, 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 the services.
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.
Collaborations and Partnerships Are Key Strategies Adopted by Players to Advance their Offerings
Key players are primarily focusing on completing strategic collaborations and partnerships to enhance their unified communication as a service product and service portfolios. Besides, investment across customized product and service launches is helping key companies to strengthen their market positions. Various key companies have extended their partnerships with cloud service providers to optimize performance. For instance,
An Infographic Representation of Unified Communication as a Service (UCaaS) Market
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The global unified communication as a service market research methodology 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 advanced market over recent years.
Value (USD billion)
Component, Delivery Model, Organization Size, Vertical and Region
By Delivery Model
By Organization Size
Fortune Business Insights says that the global market value stood at USD 25.85 billion in 2020
By 2028, the market size is expected to reach USD 69.93 billion.
The market is expected to grow at a CAGR of 13.4% during the forecast period (2021-2028).
The hosted/cloud segment is expected to lead the global market.
The increasing adoption of remote work policy and distributed workforce approaches is expected to drive the market.
Cisco Systems, Inc., RingCentral, Inc., Microsoft Corporation, Zoom Video Communications, Inc., and others are the major players in the market.
North America holds the highest market share.
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