The global unified communication as a service market size was valued at USD 38.74 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 23.6% from 2021 to 2028. The outbreak of COVID-19 is compelling enterprises to adopt a hybrid business model. As a result, enterprises are particularly consolidating multiple communication features and enabling cross-functioning to ensure efficient collaboration. The growing number of employees working from home is also prompting companies to implement UCaaS (Unified Communication as a Service) solutions. Companies are also adopting UCaaS platforms and tools as the outbreak of the COVID-19 pandemic prompts them to reevaluate their operational costs and protect their margins amid dwindling revenues.
The latest technologies such as Artificial Intelligence (AI) are playing a vital role in helping organizations in achieving their digital transformation goals. AI-enabled solutions can help organizations in effortless transcriptions, intelligently tracking speakers, intuitively recording calls, understanding users’ needs, and offering relevant services. AI-enabled UCaaS solutions can also help in sentiment analysis. As such, AI-enabled UCaaS solutions can typically leverage data mining techniques to analyze discussions, reviews, and comments, direct mentions related to brands, products, and services, and help enterprises in strategizing accordingly.
The adoption of video conferencing and video communication practices gained significant traction in 2020. The trend was particularly highlighted by the rapid adoption of video conferencing and communication services offered by Microsoft Corporation; Cisco Systems, Inc.; and Zoom Video Communications, Inc.; among other vendors. For instance, Zoom Video Communications, Inc. registered a growth of 88% in 2020, thereby illustrating the growing preference for video conferencing solutions among enterprises. Video conferencing enables users to foster healthy interpersonal relationships and facilitates more efficient decision-making during meetings and conferences.
The continued rollout of high-speed 5G data networks bodes well for the growth of the market over the forecast period. The high-speed, low-latency connectivity enabled by 5G networks can significantly enhance video and audio conferencing and meetings and strengthen collaboration. The cloud-specific network function virtualization (NFV) and multi-access edge computing (MEC) capabilities offered by 5G technology for scalable and self-healing networks are particularly encouraging the adoption of UCaaS solutions, platforms, and services. The customizable user interfaces and application functions, which can potentially enhance workplace collaboration, are also expected to contribute to the growth of the market over the forecast period.
The public cloud segment accounted for the largest revenue share of over 73.0% in 2020. Public cloud technology helps in reducing lead times in testing and deploying new products. Public cloud-based deployment models offer the opportunity to deploy scalable, subscription-based UC platforms. As a result, organizations of all sizes can conveniently shift from legacy communication practices and platforms to more advanced and efficient public cloud UCaaS solutions. The growing preference among companies for a flexible environment that can potentially aid in deploying changes more efficiently is also prompting organizations to opt for public cloud-based platforms.
The private cloud deployment model is expected to offer significant growth opportunities for the market over the forecast period. Private clouds offer a greater degree of customization and enable companies to subscribe to services according to their needs and specifications. Deploying private cloud-based UCaaS solutions also benefits enterprises in the form of 24/7 support services, contracted capabilities, and service-level agreements, and guarantees more secure and personalized experiences. Several companies such as Kandy Communications, LLC offer UCaaS services to their clients and enable them to transform legacy communication applications into a private cloud deployment model.
The IT and telecom segment dominated the market with a revenue share of 19.9% in 2020. The strong emphasis of several IT and telecom companies to roll out more efficient collaboration among their globally-distributed teams is driving the need to deploy UCaaS solutions. Incumbents of the IT and telecom industry often have to work with high-profile clients, such as government departments and federal organizations, which calls for secure and efficient exchange of information. The growing need for data security and privacy protection is driving the adoption of UCaaS solutions by IT and telecom companies.
The healthcare industry gained a significant revenue share in 2020 as patients remain keen on striking efficient communication with healthcare officials and caregivers to obtain better care. As a result, doctors and healthcare providers also remain keen on accessing critical patient data from various sources in real-time to optimize healthcare experience and improve operational efficiency. The growing adoption of UCaaS solutions by healthcare systems, including the National Health Service (NHS), is also encouraging other regional healthcare establishments to deploy the technology at the organizational level. Regulations such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA) are particularly prompting healthcare organizations to deploy private cloud UCaaS solutions to ensure adequate data security and privacy protection.
North America dominated the global market in 2020 with a revenue share of over 31.0%. Given that the U.S. has been among the worst-affected countries by the outbreak of the COVID-19 pandemic, government bodies, healthcare providers, and offline and online distribution channels in the U.S. are looking forward to efficient communication and collaboration to ensure adequate care and diagnosis. This is driving the adoption of UCaaS solutions in the U.S.
Asia Pacific is expected to witness substantial growth over the forecast period owing to the continued digitization and the growing mobile workforce in the region. An aggressive rollout of high-speed internet at affordable tariffs and rapid smartphone proliferation in the region are particularly allowing people to work remotely and subsequently encouraging enterprises to opt for UCaaS solutions. Furthermore, the presence of a significant AI-development hub in several Asian countries, including Singapore, has led to the rise of several startups that offer AI-related services to clients across the globe. This is typically driving the adoption of UCaaS solutions and platforms in the region and is expected to contribute to the growth of the market over the forecast period.
Incumbents of the UCaaS market are diversifying their service offerings and ensuring a better user experience as part of the efforts to strengthen their market share. For instance, in December 2020, 8x8, Inc. announced new features to its Open Communications Platform, which helps organizations in optimizing employee productivity and accelerating digital workplace initiatives via a microservices architecture. Similarly, in April 2020, Verizon acquired Blue Jeans Network, Inc. to combine its UCaaS offerings with Blue Jeans Network, Inc.’s meeting platform and provide better services to users. Integration of AI capabilities with UCaaS technology has been one of the significant trends being followed by several companies, such as Microsoft Corporation and Verizon, to improve their respective service offerings.
Service providers are putting a strong emphasis on innovation and new product launches to open new revenue generation channels. They have also started offering a Communication Platform as a Service (CPaaS) to their customers, thereby helping companies in connecting people with services, processes, and applications. For instance, ALE International offers products related to UCaaS and CPaaS to customers looking for more efficient communication and collaboration among employees, people outside the company, and other clients. This is allowing end users to subscribe to services according to their changing needs and requirements. Some prominent players in the global unified communication as a service (UCaaS) market include:
8x8 Inc.
Amazon.com, Inc.
Avaya Inc.
CenturyLink, Inc.
Cisco Systems, Inc.
Fuze, Inc.
Report Attribute |
Details |
Market size value in 2021 |
USD 47.64 billion |
Revenue forecast in 2028 |
USD 210.07 billion |
Growth Rate |
CAGR of 23.6% from 2021 to 2028 |
Base year for estimation |
2020 |
Historical data |
2017 - 2019 |
Forecast period |
2021 - 2028 |
Quantitative units |
Revenue in USD billion and CAGR from 2021 to 2028 |
Report coverage |
Revenue forecast, company ranking, competitive landscape, growth factors, and trends |
Segments covered |
Deployment, industry vertical, region |
Regional scope |
North America; Europe; Asia Pacific; Latin America; MEA |
Country scope |
U.S.; Canada; Germany; U.K.; China; India; Japan; Brazil; Mexico |
Key companies profiled |
8x8 Inc.; Amazon.com, Inc.; Avaya Inc.; CenturyLink, Inc.; Cisco Systems, Inc.; Fuze, Inc. |
Customization scope |
Free report customization (equivalent to up to 8 analyst working days) with purchase. Addition or alteration to country, regional, and segment scope. |
Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2028. For the purpose of this study, Grand View Research has segmented the global unified communication as a service (UCaaS) market report based on deployment, industry vertical, and region:
Deployment Outlook (Revenue, USD Billion, 2017 - 2028)
Public Cloud
Private Cloud
Industry Vertical Outlook (Revenue, USD Billion, 2017 - 2028)
Automotive
Education
Healthcare
BFSI
Hospitality
Real Estate
Legal
IT & Telecom
Others
Regional Outlook (Revenue, USD Billion, 2017 - 2028)
North America
U.S.
Canada
Europe
Germany
U.K.
Asia Pacific
China
India
Japan
Latin America
Brazil
Mexico
MEA
b. The global UCaaS market size was estimated at USD 38.74 billion in 2020 and is expected to reach USD 47.64 billion in 2021.
b. The global UCaaS market is expected to grow at a compound annual growth rate of 23.6% from 2021 to 2028 to reach USD 210.07 billion by 2028.
b. The IT and telecom segment dominated the global UCaaS market with a share of 19.88% in 2020. This is attributable to the increasing demand for the transformation of IT infrastructure for upfront collaboration and communication practices.
b. Some of the key players in the global UCaaS market include 8x8, Inc.; ALE International; Avaya Inc.; Cisco Systems Inc.; IBM Corporation; and RingCentral, Inc.
b. Key factors that are driving the market growth include the pay-as-you-go model for end-users, technological proliferation in UCaaS systems, and the rise of cloud and as-a-service models.
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In order to ensure business continuity amidst the COVID-19 crisis, business organizations, especially in highly affected countries are allowing their employees to work from home. The increase in people working from home has led to a surge in demand for online video viewing, downloading, and communication through video conferencing, all of which are leading to increased network traffic and data usage. COVID-19 shall accelerate the demand for agile and flexible work styles and further push the adoption of communication services that tend to improve work-life balance. On the flip side, telecom regulators worldwide have postponed their plans of 5G spectrum auction amidst the global pandemic. This is expected to have an impact on the commercialization of commercial 5G standalone deployments and revenue generated through 5G services. The ongoing pandemic has forced telecom operators worldwide to test their network resiliency and revisit their planned investments, especially in 5G technology. The report will account for Covid19 as a key market contributor.
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