The North American hosted IP telephony and unified communications-as-a-service (UCaaS) market is anticipated to rack up double-digit growth through 2023 with rising demand for more flexible technology consumption models to support digital-transformation projects.
That’s according to a new report by Frost and Sullivan. Last year, the market grew more than 32 percent in terms of installed users and nearly 31 percent in terms of revenue. Through 2023, the compound annual growth rate (CAGR) should be more than 25 percent for installed users and nearly 22 percent for users.
Other market drivers include premises-based communication offerings reaching end of life and the increasing availability of “compelling” UCaaS offerings, Frost and Sullivan said.
Market leaders like 8×8, Fonality (now NetFortris) and RingCentral pioneered hosted IP telephony services more than a decade ago, and have evolved and realigned their strategies to become some of the most successful providers today, the report notes.
Evolving providers such as AT&T, CenturyLink, Comcast, Evolve IP, Fuze, Intermedia, NWN IT, TPx Communications and West are vying for a leadership position through technology prowess and effective growth strategies, the report adds.
“Currently, the market is relatively untapped and can support a large number of providers with a diverse background and skill set,” said Elka Popova, vice president of digital transformation at Frost and Sullivan. “As the market matures, highly diversified telecommunications companies and software-as-a-service (SaaS) providers are likely to dominate the market. Providers of non-unified communication (UC) backgrounds will increasingly disrupt the market. These new entrants must possess certain differentiators and competitive advantages to ensure a greater chance of success.”
Due to multiple acquisitions, Vonage now is second in hosted IP telephony revenue. Also, Cisco, Microsoft, Unify and Zang are challenging the status quo with packaging and pricing, while Star2Star is gaining ground with its business model and hybrid architecture.
Jive and Nextiva’s customer service are raising the bar for other market participants, while Mitel and Windstream are shifting the balance of power with large-scale acquisitions. PanTerra, Rogers Communications and Verizon are “disrupting the market with innovative new offerings,” Frost and Sullivan said.
“In spite of the compelling hosted/cloud services benefits, many businesses will continue to use premises-based systems for security, control, more flexible customization and other reasons,” Popova said. “Furthermore, the application programming interface (API) economy is driving the disintegration of the traditional telecommunication and information technology value chains. With the right set of telephony and messaging APIs, and a reasonable investment in software development, a data center/infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), or software-as-a-service (SaaS) company can become a UCaaS or contact center-as-a-service (CCaaS) provider and disrupt the status quo.”
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December 12 2018 @ 16:40:06 UTC