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The unified communication as a service market size is estimated to grow by USD 103.56 billion at a CAGR of 25.36% between 2022 and 2027. Market growth is contingent on various factors, notably the transition from capital expenditure (CAPEX) to operational expenditure (OPEX) models. This shift reflects a broader trend toward cost-effective and scalable solutions. Additionally, the rising adoption of Unified Communications as a Service (UCaaS) by small and medium-sized businesses (SMBs) is a significant driver. SMBs are increasingly leveraging UCaaS to streamline their communication and collaboration needs while minimizing costs. Furthermore, the growing need for global collaboration and communication is fueling the demand for UCaaS solutions. These factors collectively contribute to the market's growth, highlighting the importance of UCaaS in today's business landscape.
It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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This market report extensively covers market segmentation by application (enterprise collaboration, enterprise telephony, and contact center), end-user (BFSI, ICT, healthcare, retail, and others), and geography (North America, Europe, APAC, South America, and Middle East and Africa).
The Unified Communication as a Service (UCaaS) Market share by the enterprise collaboration segment will be significant during the forecast period. Enterprises are shifting towards UC solutions for more effective customer and employee communications and collaboration. Moreover, they are cheaper, more convenient, and more technologically advanced than on-premises options. They have also resulted in ease of usage of technologies, such as e-mail, unified messaging, calendaring, instant messaging, mobile UC, and voice mail. Analysts at Technavio predict a rise in the integration of specific collaborative applications in business processes to bring in more automation.
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The enterprise collaboration segment showed a gradual increase in the market share of USD 11.89 billion in 2017. Additionally, companies are also providing video infrastructure as a service, that too with low implementation and maintenance costs. Within this segment, SMBs are a prime market as they receive business customizable and specific solutions through a variety of companies to opt for who might be channel partners As a result of these factors the global Unified Communication as a Service market will grow significantly during the forecast period.
Enterprise telephony segment is also another key segment of UCaaS. The pay-as-you-go pricing model and flexibility are added benefits for SMBs. However, challenges that enterprise telephony companies encounter include uncertainty in decision-making, budget constraints, and long sales cycle. companies have shifted to the cloud-based UC deployment model as the demand for on-premises telephony services is gradually being replaced. Hence, the growth of cloud-based enterprise telephony solutions will increase the growth of the global Unified Communication as a Service (UCaaS) market share during the forecast period.
The BFSI segment includes insurance companies, non-banking financial companies, cooperatives, commercial banks, and insurance companies. These sectors heavily rely on digitalization of all core processes and procedures and invest massively into cost cutting and are adopting UCaaS to contribute towards this effort. The financial sector seeks to improve customer services and improve workflow automation of core and allied activities, such as deposits, lending, leasing, and regulatory compliance during the forecast period. The addition of features including real-time speech recognition technologies and advanced IT security are also likely to result in increased deployment of UCaaS solutions in organizations. These factors are likely to result in the growth of the market during the forecast period.
ICT firms also are utilizing UC systems to communicate and collaborate primarily due to the benefit of greater enterprise mobility. Also, the adoption of the BYOD model in the IT industry has resulted in the adoption of cloud-based UC systems. UC&C, the latest ICT trend, provides more flexibility and scalability. Even remote connection can be achieved via home PCs, and mobile devices using session-based computing, ensuring client, ensuring both a rich client experience and employee flexibility. The shift towards digital platforms and virtual work has resulted in massive cost savings through deductions in capital investment of hardware. However, data privacy and security risks are likely to result in a reduction of the market share during the forecast period and protection of company online data is a key challenge that cloud security management should address. Regardless, on-premises options of business analytics and intelligence are more expensive than cloud-based ones and it is likely to reverse the market trend due to this fact.
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North America is estimated to contribute 44% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. In the North American region, the US was the largest contributor to the market in the region due to the presence of several firms, large-scale high-speed broadband networking, the growing trend of adoption of BYOD model, etc. Several enterprises are also encouraging this and enterprise spending for the purposes of client collaboration and telephony services is increasing. This includes investment into cloud-based PBX, data analytics, and cloud-based contact centers, for more robust management of both domestic as well as international business processes. The increased demand for the UCaaS market in North America is also due to it being both cost-effective and user-friendly.
Additionally, it is also witnessing a growth in demand in colleges and universities for digitalizing the learning experience boosted by a high adoption of smartphones by students. Tuition fees of distance learning programs also are lower, compelling several students to opt for the same. All these factors have resulted in a rising number of colleges offering MOOCs and distance education programs which shall all contribute towards the growth of the UCaaS market during the forecast period.
The market is witnessing rapid growth, driven by the increasing adoption of emerging technologies such as artificial intelligence and machine learning. UCaaS offers a range of telephony, conferencing, and collaboration solutions through the cloud, making it ideal for organizations of all sizes, including small and medium enterprises (SMEs) and large enterprises. Key companies like Altura and RingCentral are providing innovative UCaaS solutions that include video, chat, and collaboration tools, enhancing employee productivity and customer satisfaction. The shift towards UCaaS is driven by its ability to offer secure, scalable, and cost-effective communication solutions for modern businesses.
The shift from CAPEX to OPEX is significantly driving market growth. Due to the popularity of enterprise mobility and the BYOD model, global businesses are increasingly adopting Cloud-based UC. It helps replace existing on-premises communications and collaboration systems with SaaS-based UC software, eliminating the huge expenditure cost and other costs of in-house maintenance of hardware and software for UC systems.
Additionally, the unified communication-as-a-service model gives enterprises the flexibility of adding or reducing the number of users and ensures the most modern and technologically advanced software solutions, enhancing employee productivity and customer satisfaction. It incorporates features such as video and audio conferencing, messaging, and collaboration tools, all integrated into a cloud infrastructure. Furthermore, the integration of artificial intelligence, machine learning, and other emerging technologies further enhances the capabilities of UCaaS. The Unified Communication as a service solution facilitates hosted VoIP by possessing functions such as Outlook integration, collaboration, instant messaging, video conferencing, and high-definition voice. Therefore, due to several such factors, the market will grow significantly during the forecast period.
The increased adoption of BYOD and mobility is a key trend in the market growth. Firms in various industries have increasingly shifted towards the BYOD model which enables employees to utilize their personal devices in the workplace. This is being driven by the focus on user preference, increasing mobile usage, and the potential to work remotely. Mobility is also increasingly seen in enterprises as it reduces latency and improves overall business efficiency. Smartphones assist in mobility by helping in tasks such as online chatting, instant messaging, telephony, speech recognition, integrated voice mail, e-mail, unified messaging, and SMS.
Features such as voice mail-to-text, fixed mobile convergence, and mobile presence have been introduced to enhance communication for smartphone users. Additionally, the requirements for ease and convenience of communication between employees, customers, partners, and suppliers are even more vital and the implementation of the UC system satisfies this requirement. Hence all these factors are likely to result in the growth of the market during the forecast period.
The intense market competition is challenging market growth. Cloud computing services operate on a pay-as-you-go pricing model and are not long-term agreements that have intensified company competition in the market. Hence due to the possibility of subscription of UCaaS at any point in time companies are under immense pressure to invest in R&D and stay in the competition by creating the largest market innovations.
Additionally, rising compliance to dynamic consumer demands has also resulted in investment in risk management options to maximize their revenue and make them more visible in the market. Moreover, the intense market competition is characterized by market entrants, particularly by expanding their user base by reducing prices. This can eliminate market competitors and result in low capital and profit margins, which could all result in a serious threat to the market during the forecast period.
The market industry report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the Unified Communication as a Service (UCaaS) Market share.
NetScout Systems Inc.-The company offers unified communication as a service such as nGenius Enterprise Performance Management.
Telefonica SA - The company offers unified communication as a service such as pay as you go model and integrated cloud-based and AI-enabled collaboration services and solutions for businesses.
Tata Sons Pvt. Ltd. - The company offers unified communication as a service such as RingCentral MVP.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
The market is experiencing rapid growth driven by trends such as Bring Your Own Device (BYOD) and the increasing demand for telephony and conferencing solutions. Organizations are adopting collaboration platforms and applications from multiple companies to enhance communication and productivity. The shift towards cloud communications is driving the adoption of UCaaS deployment across various organization types, including government sectors. Key players like Poly and ScanSource are offering innovative cloud-based communication solutions to meet the evolving needs of businesses. The market is also witnessing the integration of AI and ML for features like voice assistance and remote working platforms, ensuring employee safety and enhancing online communication and collaboration.
Furthermore, the market is evolving rapidly, offering a wide range of solutions to meet the communication needs of modern businesses. These solutions include contact center solutions and unified communications platforms, which are increasingly being deployed over traditional on-premises business communication systems. A variety of UCaaS companies are competing in the market, offering solutions with innovative features and functionalities such as Zoom integration, chat channels, and video & audio conferencing. The market is also witnessing the rise of Communications Platform as a Service (CPaaS), enabling businesses to leverage Application Program Interfaces (APIs) for enhanced communication capabilities. The integration of Artificial Intelligence (AI) and Machine Learning (ML) is further enhancing UCaaS offerings with advanced technology, programmable capabilities, and unified collaboration tools. This includes features like voice calling, file sharing, screen sharing, and teamwork tools, all accessible through a Contact Center as a Service (CCaaS) model.
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Market Scope |
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Report Coverage |
Details |
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Page number |
178 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 25.36% |
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Market growth 2023-2027 |
USD 103.56 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
25.1 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 44% |
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Key countries |
US, Canada, India, UK, and France |
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Competitive landscape |
Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
8x8 Inc., ALE International, AT and T Inc., Avaya Inc., BT Group Plc, Microsoft Corp., Mitel Networks Corp., NEC Corp., NetScout Systems Inc., NTT Communications Corp., Oracle Corp., Orange SA, Sify Technologies Ltd., Tata Sons Pvt. Ltd., Telefonica SA, Telstra Ltd., Verizon Communications Inc., Vonage Holdings Corp., PanTerra Networks Inc., and RingCentral Inc. |
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Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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