Being a successful UCaaS provider means battling for market share in an increasingly competitive environment while adhering to a constantly growing list of requirements to please customers.
A steady stream of acquisitions, like Mitel swallowing up ShoreTel and Cisco buying BroadSoft, have narrowed the playing field. Analysts and members of Channel Partners’ Editorial Advisory Board shared their views with us on what it now takes to succeed in in UCaaS.
“A successful, cutting-edge UCaaS provider nowadays will look much different than what it did 20 years ago,” said Raul Castanon-Martinez, 451 Research’s senior analyst of workforce collaboration. “What I’d be looking for these days is a vendor that is able to provide a platform that (gives) organizations the software building blocks they need for easy and agile customization of the digital experience for customers, partners and employees. This includes different forms of engagement including chat, voice, video. Another key component I’d be looking for is the use of real-time analytics that leverage all the unstructured data that business communications generate; this entails the use of machine learning and natural language understanding.”
Among the many challenges UCaaS providers face are getting businesses to trust the cloud, the ability to support hybrid UC so businesses can migrate to hosted at their own pace, making UCaaS appealing to the channel and giving them room to add value of their own, and competing with adjacent offerings, namely CPaaS and team messaging offerings, said Jon Arnold, principal analyst at J Arnold & Associates.
“Value proposition is messy, and hard for end buyers to understand the landscape to make good decisions,” he said.
UCaaS providers need completeness of offerings across the portfolio, reliability, quality of service, predictable and consistent costs, and responsiveness in service and support, said Larry Walsh, CEO and chief analyst of The 2112 Group, and editorial advisory board member.
“It really doesn’t get much simpler than that,” he said. “Cutting-edge is a different issue. It’s interesting, but doesn’t necessarily define success. You have plenty of examples of companies with ‘cutting-edge’ technology that fails because they didn’t deliver on the above attributes. Cutting-edge in UCaaS to me means consistency in service, simple and easy-to-use technology, speed of delivery, and extensibility to different technologies (integration/interoperability).”
It’s getting tougher to compete as the market saturates with numerous successful companies, said Sean Riley, research director at IDC and editorial advisory board member.
“What makes it even harder for a new competitor to compete is the reliability aspect, as the major players boast enviable reliability stats,” he said. “Many of the larger providers also have interoperability partnerships with major VoIP manufacturers.”
Based on feedback from analysts, editorial advisory board members, recent news reports and Gartner’s 2017 Magic Quadrant for WorldWide UCaaS, we’ve compiled a list, in no particular order, of 20 top UCaaS providers that are making the most of the current competitive landscape and charting success.
RingCentral capped off 2017 with fourth-quarter revenue and profit that topped analysts’ expectations, and annual recurring revenue for RingCentral Office, its UCaaS offering, grew 36 percent year over year to more than $466 million.
“RingCentral is a good example of a successful UCaaS provider,” Larry Walsh said.
MSX International (MSXI), a business-process outsourcing company that provides technology-based services to enterprises, recently selected RingCentral to connect its 6,000 global employees.
Julie Dzubay, WTG’s vice president of sales operations and Channel Partners editorial advisory board member, cites 8x8 as a successful UCaaS provider. Gartner lists 8x8 among the leaders in the industry, saying it “continues to win enterprise accounts in the 1,000-to-5,000-employee range.”
In the past year, 8x8: expanded growth into value-added distribution by partnering with Ingram Micro, Jenne and ScanSource; teamed with PCI Pal, a provider of secure and compliant payment offerings for customer engagement; extended U.S. relationships with Ingram Micro Cloud, CDW and ScanSource into the United Kingdom and Ireland; and experienced accelerated growth with master agents/technology service distributors such as Avant, Intelisys, TBI and Telarus.
Jon Arnold cites Vonage among the providers that do a good job. Bob Crissman, Vonage’s senior vice president and channel chief, says his company’s “secret sauce” is the ability to offer both UCaaS and communications platform as a service (CPaaS).
Vonage recently received 15 new patents from the U.S. Patent and Trademark Office. Benefits of the new patented technologies include enhanced network reliability and privacy, tools for increased employee productivity, and capabilities to enable improved customer connections.
Verizon also is listed among the leaders in Gartner’s Magic Quadrant. In addition, the carrier was ranked behind only 8x8 and RingCentral on IHS Markit’s 2017 UCaaS Scorecard for North America.
Verizon’s UCaaS services are available in more than 150 countries and supported by six data centers around the world. It supports more than 4,000 customer networks.
Orange Business Services
Orange Business Services is listed among the leaders in Gartner’s Magic Quadrant. The company has registered more than 200,000 user subscriptions for Cisco Spark and hundreds of Spark Boards for more than 20 multinational enterprise customers.
The company has more than 11,400 customer connections managed throughout the United States.
Gartner said West remains a strong Cisco UCaaS stack partner. It has expertise across a range of Cisco UCaaS-related offerings, such as HCS, Spark, Expressway and Contact Center Enterprise, it said.
In January, West acquired the assets of PhoneTree, a provider of automated appointment reminder services and patient communication software to physician practices, enterprise health care organizations and other niche vertical markets.
Both Jon Arnold and Julie Dzubay say Mitel is among the best and most successful UCaaS providers. Mitel completed its acquisition of ShoreTel last fall, which Mitel said accelerates its move-to-the-cloud strategy, shifting it into the No. 2 market share position for UCaaS globally.
Mitel ended 2017 with an installed UCaaS subscriber base in excess of 1.1 million seats, and with UCaaS revenue up 158 percent from a year ago. Also, MiCloud seats installed via service providers in Europe crossed the 1 million seat mark.
Avaya, among the UCaaS leaders cited by Jon Arnold, emerged from chapter 11 bankruptcy in December and says it continued adding customers throughout the process. It since has announced aggressive growth plans and has launched an organization focused on driving cloud products and services, including UC.
Avaya recently announced updates to Equinox, its UC app, including: enhancements to Equinox Meetings Online, a cloud-based meeting and conferencing service; the extension of Equinox benefits to midmarket IP Office users; and the addition of Equinox Attendant, a PC-based software application that allows attendants and receptionists to manage inbound calls.
Julie Dzubay cited Five9 as a successful UCaaS provider.
“The challenge the UCaaS providers are having is consistent post-sale performance,” she said. “If a UCaaS carrier can provide a consistent, above-average post-sale performance, they are winning the mindshare of the channel.”
For 2017, Five9 reported record annual revenue of $200 million, up 24 percent year over year. It also set an all-time record for enterprise bookings in the fourth quarter and full year.
Star2Star Communications began the year by merging with Irish cloud communications company Blueface, and going global in the process. Larry Walsh said Star2Star is a good example of a successful UCaaS provider.
In its recent report on the North American hosted IP telephony and UCaaS market, Frost & Sullivan said Star2Star is gaining ground with its business model and hybrid architecture.
Nextiva is one of the best examples in terms of having a forward-looking vision, Raul Castanon-Martinez said.
“The main distinctive feature in their platform is their focus on workflows rather than tools,” he said. “Rather than providing an integrated set of communications tools (chat + voice + video, etc.) they focus on how communications fit within the users’ and company’s workflows.”
Last fall, Nextiva announced NextOS, its new communications platform. The company had been developing it over the last several years with the intention of unifying the various business applications within a workplace.
Intermedia also is cited by Castanon-Martinez as a strong UCaaS player.
“They have put together a comprehensive communications and collaboration system that brings together ‘best of breed’ business applications,” he said.Intermedia recently unveiled a next-generation platform designed for SMBs and partners that extends its UCaaS lineup. Intermedia Unite includes a phone system, plus integrated screen sharing, video collaboration, and backup and file sharing.
Gartner cites AT&T as a UCaaS challenger. AT&T is strong across both the Cisco and Microsoft UCaaS stacks, while adding its internal functionality and professional services, it said.
In its recent report on the North American hosted IP telephony and UCaaS market, Frost & Sullivan said AT&T is among a group of providers vying for a leadership position through technology prowess and effective growth strategies.
Jon Arnold cited Cisco as a successful UCaaS provider. It recently closed its acquisition of BroadSoft, a global leader in UCaaS and CCaaS, with more than 19 million business subscribers and a presence in about 80 countries.
Last November, Cisco announced Spark Assistant, an enterprise-ready voice assistant for meetings. It is the latest innovation on the Cisco Spark platform.
Google, Amazon and Microsoft
Larry Walsh said RingCentral, Start2Star and others are going to come under increasing pressure from the likes of Google, Amazon Web Services (AWS) and Microsoft, "who are taking a software-only approach.”
“Microsoft Teams, while still a work in progress, is putting together the pieces for the business communications and collaboration platform of the future,” Raul Castanon-Martinez said. “They have an advantage with the company’s collaboration and productivity tools; AI (artificial intelligence) is also a key strength and differentiation.”
AWS rolled out its Chime UCaaS offering a year ago, and its Chime partners include CenturyLink and Vonage. 2nd Watch, a managed cloud provider and AWS consulting partner, listed Chime as one of the fastest-growing AWS products among its customers.
Cited by Gartner as a visionary, Fuze set sales records in 2017, posting a 50 percent increase in subscription revenue year-over-year, and pulling in $134 million in new financing, bringing its total funding to more than $300 million.
In 2017, Fuze took on hundreds of new customers and introduced strategic product enhancements.
Gartner lists Masergy as a niche player, but points out it has a focused strategy to combine network, UCaaS and security services to midsize enterprises with global footprints. Adding UCaaS to its foundational network services has been a successful decision, it said.
Last fall, Masergy rolled out its Communicator HUB, which improves worker productivity by organizing on a single screen all contextual information relevant to a call, such as notes, emails and shared documents, captured from Google Suite, Microsoft Office 365, Salesforce, Twitter and other collaboration applications.
Though not a traditional provider of UC as such, Tango Networks allows mobilization of UC via full integration to the mobile network, something that most UC providers are unable to do, Raul Castanon-Martinez said.
Tango Networks and Samsung Electronics America are collaborating to deliver mobile UC to enterprises. It combines Samsung’s smartphones, and its Knox security and management capabilities, with Tango’s Kinetic Communications mobile UC platform.
Nontraditional competitors (Skype, Slack, Zoom)
“UCaaS providers won’t compete exclusively against their peers, but also with alternative communications systems, such as Skype, Slack and Zoom,” Larry Walsh said. “It’s getting increasingly easier to replace telephony and adjacent technologies that fall under UCaaS with flexible, lightweight and inexpensive applications — particularly those that are hardware-agnostic.”
Reuters recently reported that Slack now has more than 150 customers using the enterprise version of its workplace collaboration software.