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UC Roundup: Red-Hot UC&C Market to Remain Strong Through 2020

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UC Roundup

The global unified communications and collaboration (UC&C) market will retain most of the momentum gained from the start of the COVID-19 pandemic through the end of 2020.

That’s according to IDC. UC&C revenue grew 25.1% year over year and 12.4% quarter over quarter to $11.5 billion in the second quarter, according to IDC’s latest QView.

In the second quarter, the UC&C market, including video conferencing software and cloud services, saw revenue grow almost 47% year over year and more than 22% sequentially, to $5.5 billion. The managed/hosted voice/UCaaS market, both public and private cloud, grew 20.4% year over year and 7.4% for the quarter.

Enterprise video conferencing systems rebounded from a weaker first quarter. They grew 21.5% from the first quarter and nearly 27% year over year. In the meantime, the on-premises market continued its downward trend amid the pandemic, declining almost 22% year over year in the second quarter.

From a geographic perspective, the UC&C market saw positive results across the globe in the second quarter.

Among company highlights:

  • Microsoft’s global UC&C revenue reached $4 billion, up 19.5% from the first quarter and up 49.1% year over year. That represented 35.2% of the global UC&C market in the second quarter.
  • Cisco’s global UC&C revenue reached $1.3 billion, up 11.7% quarter over quarter and 4.4% year over year. The company was second overall with 11.1% global market share in the second quarter.
  • Zoom‘s global UC&C revenue more than doubled (103.2%) over the first quarter and more than 363% year over year, totaling almost $649 million in the second quarter. Zoom’s overall UC&C market share was 5.6%.
  • Avaya’s global UC&C revenue was up 6.6% quarter over quarter and 7.1% year over year. That’s despite a 30.3% decline in the IP telephony/UC systems segment. Avaya’s UC&C and UCaaS revenue more than offset this decline, increasing 37.6% quarter over quarter and 104.4% year over year.
  • RingCentral’s global UC&C revenue grew 5.1% sequentially and 33.7% year over year. The company’s overall UC&C market share stood at 1.9% in the second quarter.

To find out more about the growth and outlook of the UC&C market, we spoke with Rich Costello, IDC’s senior research analyst of UC&C.

Channel Partners: Have UC&C companies been able to keep up with increased demand and other challenges associated with the pandemic?

IDC's Rich Costello

IDC’s Rich Costello

Rich Costello: For the most part, yes, the UC&C venders and service providers that supply software and cloud-based communications and collaborative solutions have been able to meet the challenge during the pandemic and, in my opinion, did yeoman’s work in initially scaling-up their offerings to support a sudden crush of new remote users, while meeting and maintaining high levels of performance and security. In many cases, these vendors and providers helped organizations meet work-from-home (WFH) requirements with minimal disruption.

There was more of a challenge with some UC&C hardware vendors meeting the huge demand in the second quarter for things like screens, cameras, headsets, accessories, etc., due to pipeline disruptions in the Asia Pacific region. But security was also a challenge for some vendors – Zoom in particular – in a few well-publicized breaches during the height of the early pandemic, making the company a target of competitors. But to Zoom’s credit, it recognized its issues and began a months-long program in 2020 to enhance its security and privacy capabilities.

CP: Has the pandemic and increased demand for UC&C products and services shaken up the competitive landscape? Have some companies gained market share over others?

RC: In the video collaboration area in particular, Zoom’s financial performance was …

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