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Unified Communication as a Service (UCaaS) Market Size, Share & COVID-19 Impact Analysis, By Component (Telephony, Unified Messaging, Collaboration Platforms, Conferencing, Reporting and Analytics), By Delivery Mode (Managed Services, Hosted/ Cloud Services), By Enterprise Size (Large, Small and Medium Sized (SME’s)), By Vertical (BFSI, IT and Telecommunication, IT-Enabled Services, Retail and Consumer Goods, others), and Regional Forecast, 2020–2027

Region : Global | Format: PDF | Report ID: FBI101934

 

KEY MARKET INSIGHTS

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The global unified communication as a service (UCaaS) market size was USD 22.97 billion in 2019 and is projected to reach USD 59.51 billion by 2027, exhibiting a CAGR of 12.8% during the forecast period.

COVID-19 Cover

This report covers COVID-19 impact analysis on Unified Communication as a Service (UCaaS) Market

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Businesses across the world have gained significant profits by adopting unified communication platforms that offer access to video, audio, messaging, and web conferencing anywhere and at any time. The emergence of cloud infrastructure has reshaped the demand for unified communication as a service platform extensively. The shift of enterprise workload to the cloud to achieve competitive advantages such as enhanced employee productivity and business agility are supporting remote working, bring your own device (BYOD), or distributed workforce. Such mobility services are highly demanding dynamic, collaborative, and multimodal communication platforms, thereby resulting in the overall market growth.


The trend of distance learning is also supporting the demand for unified communication services. According to the Remote Work Trend report published in April 2020 by the Microsoft Corporation, almost 183,000 occupants in 175 countries across the world are using Microsoft Teams communication platform for distance learning. Thus, distance learning, remote working, and BYOD are likely to drive the adoption of UCaaS platforms.


The cumulative demand for the communications platform as a service (CPaaS) and application program interfaces (APIs) is likely to drive the market growth in the forecast years. Further, innovative technologies such as artificial intelligence (AI), machine learning (ML), and voice assistance are empowering the use of unified communication as a service for increasing growth opportunities.    


Remote Working during COVID-19 Pandemic to Augment Demand for Unified Communications


Since the COVID-19 pandemic began, the world has moved to remote working platforms to ensure employee safety and reduce the spread of coronavirus. Since the workforces have started working from home, there is an exponential demand for communication and collaborative platforms equipped with advanced technologies. Acceleration of the work from home culture has further enhanced the adoption of services such as mobile telephony, video conferencing, web conferencing, as well as collaborative meetings. Alternatives to solutions for securing cloud connectivity are enticing organizations to replace the traditional VPN scenarios with cloud-based managed UCaaS services. It is resulting in the rapid shift of enterprises towards the cloud service model to manage their teams and boost employee productivity. It is further escalating the consumption of enterprise communications services. This way, the COVID-19 pandemic has unlocked new opportunities for the UCaaS market to grow. 


Apart from this, nationwide lockdowns led to school closure, which has significantly impacted the global education scenario. According to the World Economic Forum, since April 2020, over 1.2 billion students across 186 countries have been affected by the sudden school closures. In provision of the pandemic situation, governments across the globe have started supporting digital learning approaches. The unified communication as a service provider has showcased the potential contribution to provide superlative digital learning experiences through several UCaaS platforms, such as Zoom.



  • For instance, in June 2020, Zoom Video Communications, Inc. supported over 100,000 K-12 schools by providing them access to their unified communication service platform during the crisis.


This way, the COVID-19 crisis has driven higher demand for collaborative, face-to-face, & interactive communication, and data sharing tools, which is likely to drive the market growth considerably.     


LATEST TRENDS


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Convergence and Integration of Unified Communication & Collaboration Products is a Prominent Trend


Key players in the market are adopting different strategies to provide businesses with efficient communication and collaboration tools, as well as usage and user-   based subscription models. As a result, new services, features, or functionalities are augmenting the unified communication service portfolio. Further, software firms have started supplementing programmable communication and collaboration capabilities into their current business productivity solutions. This would result in progressive investments for developing a comprehensive portfolio of unified communication as a service with additional functionalities.


Moreover, key companies such as Cisco System, Inc., NICE Ltd., and others have started widening their business portfolios by converging new capabilities, namely, contact center as a service (CCaaS), communications platform as a service (CPaaS), and more. Hence, the integration and convergence of unified communication products and services are likely to drive the market growth. 


DRIVING FACTORS


Adoption of Remote Work and Distributed Workforce Approaches to Accelerate Demand


The increased adoption of mobile devices and developments in network architectures are supporting remote work or distributed workforce approaches. The remote working approach demands an intuitive user interface (UI) with a robust, collaborative, unified communication ability that would drive the adoption of unified communication as a service platform.


Also, organizations these days are implementing ‘bring your own device’ (BYOD) policy for increasing productivity, improving collaboration, and cutting costs which would develop stronger lines for unified communications. Besides, the expansion and evolution of the network perimeter is creating an exceptional demand for a secure communication infrastructure that is set to drive market growth. Also, the rapid transition of the enterprise workload towards clouds is further set to accelerate opportunities for the market to grow.    


Rising Usage of API-driven Programmable Communication to Aid Growth


Various consumer and business applications today are embedding programmable video, audio, messaging, or chat services to automate the communication process. These embedded features are enabling developers to focus on the mission-critical aspects of the application. Thus, the market is likely to show an exponential growth stoked by the increasing significance of API-driven programmable communication. Open APIs are also enabling better integration of unified communication platforms with the business process workflow and other enterprise applications.


For example, IntelePeer Cloud Communications and Avaya, Inc. are putting their efforts to innovate API-based programmable solutions to streamline the business communication and complex business processes. Further, key players such as Twilio, Inc. and Vonage Holdings Corp. are strengthening their growth and innovation indices through various API driven solutions and programmable communication. Thus, augmenting the API economy, coupled with the adoption of programmable communication would drive the unified communication as a service demand.    


RESTRAINING FACTORS


Concerns Regarding Data Security & Regulatory Risks to Confine Adoption


Ideally, UCaaS providers 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 which might result in concerns regarding data security breaches and regulatory risks. Also, the lack of remote backups and multiple power sources may impact the business risk and compliance regulations harshly. Apart from this, reselling the services hosted at a third-party data center is a key security concern, which is confining the adoption of unified communication as a service.


SEGMENTATION


By Component Analysis


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Telephony Segment to Grow Rapidly Backed by Work from Home Practices amid COVID-19


Based on the components, the market is segregated as telephony, unified messaging, collaboration platform, conferencing, and reporting & analytics. Among these, the collaboration platform segment is likely to hold the major share in the market.


In the unified communication services, collaboration is an integral and crucial part of the system. The recent trend of digital workplaces has augmented the obligation of collaborative features. Modern collaborative tools are empowering employees to work smarter together. This tool augments employee productivity by aligning each team member. Thus, the adoption of remote working is likely to drive the adoption of collaboration software. The COVID-19 pandemic has further accelerated investments into remote communication and collaboration solutions. Thus, the collaboration platform segment is set to hold the major share in the market.


Owing to the transformation of the enterprise communication infrastructure, the demand for hosted internet protocol (IP) telephony is escalating. The shift of businesses from PBX telephony systems to voice over internet protocol (VoIP) solutions has validated the constant growth of the IP telephony industry. Moreover, the enforcement of work from home amid the COVID-19 pandemic has further aided substantial demand for IP voice telephony. Hence, the telephony segment is set to be the fastest-growing segment throughout the forecasting period.


Featured functionalities of the UCaaS technology that include video conferencing, web conferencing, and screen sharing proficiencies, promote real-time collaborative workplaces. Thus, the conferencing segment is likely to demonstrate significant growth during the forecast period.


By Delivery Model Analysis


Opportunistic Functionalities and Future Scope to Drive Hosted/Cloud Services Segment


Based on the delivery model, the market is segregated into managed services and hosted/ cloud services. Between these, the hosted/cloud services segment is likely to dominate the UCaaS market, as compared to the managed services segment. New generation hosted services such as cloud-based video conferencing and cloud private branch exchange (PBX) telephony are the key factors driving its adoption. As the cloud-based platform includes multiple functions, analytics, features, dashboards, and portals, these services are likely to hold a high CAGR during the forecast period.


By Enterprise Size Analysis


SMEs Segment to Grow Steadily Fueled by Reduction in IT Spending


Small and medium enterprises (SMEs) around the globe have been hit by the COVID-19 pandemic. Several small vendors had to shut down their businesses permanently during this global crisis. Thus, the pandemic is likely to slow down the adoption of unified communication services across small and medium-sized enterprises, which is set to affect market growth. However, according to IDC, small and medium businesses have reduced their total IT spending at 4.9% and 2.7%, respectively. This reduction in IT spending is expected to result in the progressive shift of SMEs from redundant applications to cloud-dependent UCaaS. Therefore, the SME segment is projected to exhibit a significant CAGR even after being impacted by the COVID-19 pandemic.


Large enterprises, on the other hand, have adopted work from home, bring your own device (BYOD), and remote working approaches that are relying on highly collaborative communication. Unified communications ensure an advanced level of interaction across the globally distributed workforce. The cloud-based unified communication service streamlines numerous functionalities including file sharing, video conferencing, voice calling, video calling, messaging, and team collaboration over a single interface. It offers better productivity, stronger performance, and superior user experience in a cost-effective manner, which is flourishing the demand for such services across large enterprises. Thus, the large enterprise segment is likely to fuel the market growth significantly.


By Vertical Analysis


Adoption of BYOD & Remote Working to Favor Growth of IT & Telecommunication Segment


By end-user, the market is segmented into banking, financial services, and insurance (BFSI), IT and telecommunication, IT-enabled services, healthcare, retail and consumer goods, government & defense, manufacturing, and others.


The emergence of digital banking has enforced the leadership team to plan for a unified strategy that would collaborate with the entire financial communication process over an interactive, unique, and collaborative interface. Banking authorities are finding a more ubiquitous solution to offer flexible digital banking solutions, along with a better communication interface.



  • For instance, the National Payments Corporation of India (NPCI) has taken initiatives such as Bharat Bill Payments System (BBPS) and Unified Payments Interface (UPI).


Therefore, the BFSI industry will emerge as the fastest-growing segment in the UCaaS market. 


The digital transformation of businesses has led to the strong adoption of cloud-based unified communication as a service across the IT and telecommunication industry. Besides, work from home, remote working, or BYOD systems are further stimulating the demand for IT-enabled services across the sector. Hence, IT and telecommunication is one of the major segments contributing to the market growth.


The retail and consumer goods segment is 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. The capability of unified services to improve the internal communication by connecting with every communication service is likely to fuel the adoption of services across the retail industry. Similarly, cost-effective unified communication and collaboration solutions offer improved operations, closure control, and coordination, to the logistics and transportation industry. Such advantageous factors are therefore driving the market growth across the retail and consumer goods industry.


REGIONAL INSIGHTS


North America Unified Communication as a Service Market Size, 2019 (USD Billion)

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Presently, North America is holding a major share in the global market owing to the early adoption of modern business approaches. Businesses across this region have already made chat, mails, voice, video conferencing, or web conferencing an integrated part of their operations. Besides, increasing popularity of the cloud infrastructure across numerous enterprises has further intensified the demand for cloud-based unified services.


The trend of ‘bring your own device’ (BYOD), telepresence systems, and remote working are the key factors driving the market growth across North America. Apart from this, the presence of a large number of key players across the United States is further supporting the market growth in the region. Moreover, the development of artificial intelligence (AI)-based applications in the region is supporting the acceptance of AI-driven unified communication services. This way, North America is set to majorly contribute to the global market growth.   


Europe is likely to exhibit moderate growth during the forecast period as the region is showcasing a natural progression of technology-driven businesses. The popularity of cloud communication is further stimulating the demand for unified communication across European countries.  


Asia Pacific is likely to show a high CAGR during the forecast period owing to the increasing demand for internet-based communication services. The value-added internet communication services including the voice over internet protocol (VoIP), web conferencing, video conferencing, and chats are highly demandable across the developing Asian IT infrastructure. Besides, the large cloud traffic across the region is likely to augment growth.


The enhanced demand for advanced collaborative platforms and the rising adoption of remote working are the key factors that are set to drive the market across Latin America. The Middle East is anticipated to be the most opportunistic region for the market to grow owing to the evolving adoption of cloud-based services.


KEY INDUSTRY PLAYERS


Collaborations and Partnerships are Key Strategies of Players to Develop Unique Communication Platforms


Key players are primarily focusing on strategic collaborations and partnerships to enhance their product and service portfolios. Various key companies have extended their collaborations with top cloud service providers to optimize the performance.



  • In March 2020, Avaya, Inc. partnered with RingCentral, Inc. to introduce a unified cloud communication solution named ‘Avaya Cloud Office’. The platform offers unified functionalities and features including chat, calling, video, collaboration, and many more. It features integration capabilities with several cloud business applications such as ServiceNow, Google G-Suite, Salesforce, Zendesk, and Microsoft Office 365.


Besides, new product and service launches are helping key companies to strengthen their market positions. Emerging market players are also strategically collaborating with the existing key companies to augment their businesses.



  • For instance, in March 2020, Cisco System, Inc. introduced a software platform called the Internet Communications Software Group (ICSG) aimed to enhance the effectiveness of personal and business communication by unifying integrated data and voice solutions.


LIST OF KEY MARKET PLAYERS PROFILED IN THE REPORT:



  • ALE International (Boulogne-Billancourt, France)

  • AT&T, Inc. (Texas, United States)

  • Avaya, Inc. (California, United States)

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

  • Genesys (California, United States)

  • Google LLC (California, United States)

  • Huawei Technologies Co., Ltd (Shenzhen, China)

  • IBM Corporation (New York, United States)

  • IntelePeer Cloud Communications (California, United States)

  • Metaswitch Networks Ltd (London Borough of Enfield, United Kingdom)

  • Microsoft Corporation (Washington, United States)

  • Mitel Networks Corporation (Ottawa, Canada)

  • Polycon, Inc. (California ‎, United States)

  • Ribbon Communications (Massachusetts, United States)

  • RingCentral, Inc (California, United States)

  • Sify Technologies, Ltd (Chennai, India)

  • Tata Communications, Ltd. (Maharashtra, India)

  • Twilio, Inc. (California, United States)

  • Verizon Communication, Inc (New York, United States)

  • Vonage Holdings Corp (New Jersey, United States)

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


KEY INDUSTRY DEVELOPMENTS:



  • June 2020 — Genesys launched its unified contact-center-as-a-service solution named ‘Omnipremise’ along with Arvind Limited. The platform is leveraging technologies, such as Artificial Intelligence (AI) and cloud to deliver personalized experiences to consumers.

  • April 2020 – Ribbon Communications Inc. is providing a free unified communications and collaboration (UC&C) technology on the IBM public cloud for supporting the clients of IBM enterprise amid the COVID-19 pandemic.


REPORT COVERAGE


An Infographic Representation of Unified Communication as a Service (UCaaS) Market

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The unified communication as a service market 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 advanced market over recent years.


Report Scope & Segmentation














































 ATTRIBUTE



  DETAILS



Study Period



  2016-2027



Base Year



  2019



Forecast Period



  2020-2027



Historical Period



  2016-2018



Unit



  Value (USD billion)



Segmentation



By Component



  • Telephony

  • Unified Messaging

  • Collaboration Platforms

  • Conferencing

  • Reporting & Analytics



By Delivery Model



  • Managed Services

  • Hosted/Cloud Services



By Enterprise Size



  • Large Enterprises

  • Small & Medium Sized Enterprises



By Vertical



  • Banking, Financial Services and Insurance (BFSI)

  • IT and Telecommunications

  • IT-enabled Services (ITeS)

  • Healthcare

  • Retail and Consumer Goods

  • Government and Defense

  • Manufacturing

  • Others (Media and Entertainment, Construction, etc.)



By Region



  • North America (The U.S., and Canada)

  • Europe (The U.K., Germany, France, Italy, Spain, and Rest of Europe)

  • Asia Pacific (China, Japan, India, Australia, Southeast Asia, and Rest of Asia Pacific)

  • Middle East & Africa (GCC, South Africa, and Rest of the Middle East & Africa)

  • Latin America (Mexico, Brazil, Argentina, and Rest of Latin America)



Frequently Asked Questions

Fortune Business Insights says that the global market size was USD 22.97 billion in 2019 and is projected to reach USD 59.51 billion by 2027.

In 2019, the value of the market in North America stood at 8.96 billion.

Registering a CAGR of 12.8%, the market will exhibit steady growth in the forecast period (2020-2027).

The hosted/cloud segment is the leading segment in this market.

The growing acceptance of remote working is the key factor driving the market.

Cisco Systems, Inc., RingCentral, Inc., Microsoft Corporation, Zoom Video Communications, Inc., and others are the major players in this market.

North America dominated the market in terms of share in 2019.

Increasing adoption of remote work and distributed workforce approaches is expected to drive the adoption.

The consumer goods and retail end user segment is expected to lead the unified communication as a service (UCaaS) market.

Unified Communication as a Service (UCaaS) Market Size, Share and Global Industry Trend Forecast till 2026
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