Research Firms Missed Again on UC

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Research Firms Missed Again on UC

MarketsandMarkets states that the UCaaS market size is expected to grow from USD 17.35 Billion in 2016 to USD 28.69 Billion by 2021, at a Compound Annual Growth Rate (CAGR) of 10.6% during the forecast period.


In contrast, Transparency Research claims, "The opportunity in the global UCaaS market was pegged at US$8.23 bn in 2015 and is projected to be worth US$79.3 bn by 2024. The market is likely to expand at a remarkable CAGR of 29.4% during the forecast period." [TMR]

Last year, TMR predicted, "The global unified communications as a service market is poised for staggering growth, and will be worth US$37.85 billion by 2022, finds Transparency Market Research's latest report. The market will expand at a CAGR of 23.4% between 2014 and 2022 upon its 2013 valuation of US$5.68 billion." So it went from $5.7B to $8.2B in a year . WOW!

How are they both so far off? Wait, there's more. "Gartner predicts that the UC market will grow slightly from $41 billion in 2014 to $42.4 billion by 2019," according to a CRN article.

Where Gartner did get it right is here: "The stakes are high for vendors in the enterprise unified communications space as the market is now mature while overall growth has slowed. Under-performing UC providers will be forced to exit the market with vendor consolidation expected, according to Gartner's 2016 Magic Quadrant for Unified Communications."

Transparency noted, "The lack of awareness regarding UCaaS solutions and the benefits they offer threatens to hamper the adoption rate of UCaaS by SMEs." In other words, the marketing sucks in UCaaS. But when you want to be everything to everybody and grow up to be a unicorn that is what happens.

"The top five companies in the Unified Communication as a Service (UCaaS) market together accounted for a share of just under 57% in 2015. Transparency Market Research observes that the key opportunity for these players - 8X8 Inc., West Corporation, Cisco Systems Inc., Microsoft Corporation, and Fuze Inc. - lies in the integration of business processes and applications. This is expected to further the adoption of UCaaS solutions across the globe." I think they forgot Vonage at 600K seats but whatever. No one has any idea how big the UC business line is at West. And where does slack fit in? WIth video and voice calling added to Slack plus slackbots and the integrations, 3 million users makes them bigger than many of the top 5.

I will say that it is slowing - otherwise the SPIFF war wouldn't be needed.

Some of it is UCaaS isn't easy to sell - or even fun to sell. Some of it is that the marketing sucks. The software is bloated with too many features aimed at everyone instead of someone.

Other factors:

Deployment - when you suck at deploying it, partners stop selling it. So does direct sales! User Adoption - if the users don't use it, it goes away. Training, ease of use and a good GUI/UX design is needed so people use the system!! Replaced by others - Office365 with Skype4B, Slack, Google for Work and smartphones.

Seth Godin writes 4 simple marketing steps: make it worth talking about; design it so people use it; tell the story to people who will benefit the most; and grind it out daily.

Now go sell something.

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