Unified Communication As A Service Market Size, Share & Trends Analysis Report By Deployment (Public Cloud, Private Cloud), By Industry Vertical, By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global unified communication as a service market size was valued at USD 31.52 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 23.5% from 2020 to 2027. The rising acceptance of Cloud as a Service (CaaS) model across organizations is providing an impetus to the industry growth. Cloud-based Unified Communication (UC) solutions have prompted organizations to shift to cloud platforms owing to their continuous innovation and collaborative capabilities. Furthermore, the lowering of entry barriers in the CaaS market has facilitated the entry of new players in the industry, resulting in intense competition. Incremental deployment of Artificial Intelligence (AI) in the communication industry has greatly helped organizations in catering to digital transformation needs.

AI-enabled solutions have empowered organizations to facilitate effortless transcriptions, intelligently track speakers, intuitively record calls, offer relevant services, and understand user needs. Service providers have also started providing conversational-AI enabled tools for data interpretation, faster information analysis, and better machine guidance. For instance, in March 2019, Masergy Communications, Inc. launched the Masergy Intelligent Virtual Agent, a conversational AI agent that powers virtual assistant and chatbot features for the company’s global Unified Communication as a Service (UCaaS) solutions.

The industry is anticipated to witness an increase in the adoption of UCaaS solutions, as the service providers have begun developing mobile-first collaboration platforms. Mobile-first collaboration platforms leverage Voice over Long-Term Evolution (VoLTE) and cloud technologies for establishing smooth business communications. For example, in 2018, Mavenir launched a Mobile-Native Unified Communications and Collaboration as a Service (mUCaaS) solution, a mobile-first collaboration platform designed to meet the needs of medium-sized organizations and small offices. The shift to a mobile-native cloud-based platform enables companies to ensure better capacity and higher flexibility to roll out new features. These platforms also enable the seamless integration of multi-identity systems and business messaging for safe communication practices amongst users and customers.

UCaaS solutions also encourage the pay-as-you-go model for its users, thereby enabling enterprises to capitalize on operational revenue for business expansion by providing the ability to redirect resources to priority areas. Service subscription capability offered by the pay-as-you-go model allows enterprises to practice scalable and sustainable profit generation models, thus catering to the clients’ needs. For instance, 8x8, Inc. and RingCentral, Inc. offer bundle services to its customers, which aid in overall cost saving.

Deployment Insights

The public cloud segment accounted for a revenue share of over 74% in 2019, as public cloud technology reduces lead times in testing and deploying new products. SMEs are the main benefactors of this technology as public cloud deployment is cost-efficient and offers better utilization rates compared to private cloud deployment. Moreover, the incremental need for a flexible environment in companies, to deploy changes more efficiently, has led several organizations to use public cloud-based UCaaS platforms. 

Private cloud solutions are gaining gradual acceptance in enterprises owing to the growing needs of organizations for highly safe and secure environments for the deployment of solutions and tools. Service providers such as NEC Corporation and Avaya, Inc. offer dedicated software to enable users to add custom security measures as and when required. Additionally, regulations in specific industries, such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA) in the healthcare industry, are encouraging organizations to use a private cloud deployment model.

Industry Vertical Insights

The IT and telecom segment dominated the unified communications as a service market with a revenue share of 20.77% in 2019. The rising demand for IT infrastructure transformation to facilitate upfront communication and collaboration practices is expected to drive the growth of the IT and telecom segment. Furthermore, telecom companies increasingly prefer the subscription-based model as it enables them to effectively utilize and invest resources in other business operations. Digital channels offer IT, administrators, the ability to access critical organizational data, which can be used for workflow management, customer engagement, and effective employee collaboration.

The BFSI sector has gained significant revenue share owing to the rising demand for better consumer engagement and support. The growing adoption of private cloud distribution model by banking institutions for securing critical and sensitive information is offering an impetus to the segment growth. UCaaS also allows financial institutions to exercise scalability for large-scale implementation, such as integrating phone assistance, mobile transactions, account monitoring, and chatbot-enabled messaging. Moreover, deploying cloud-enabled UC ensures more straightforward and better service and customer conversations for use cases such as approving loans.

Regional Insights

North America dominated the global UCaaS market in 2019 with a revenue share of 33.25%. The growing penetration of e-commerce and the subsequent need to deploy efficient communication solutions in and out of enterprises are promoting market growth in the region. Additionally, the U.S. government’s Trump-led initiative to facilitate technological advancements in AI is aiding market growth. Moreover, the availability of efficient infrastructure and a tech-savvy workforce is providing an impetus to the market growth.

The Asia Pacific region is expected to witness substantial growth over the forecast period owing to the rising deployment of Voice over Internet Protocol (VoIP) and hosted Private Branch Exchange (PBX) solutions. The growing trend of adopting cloud solutions in countries such as Japan, China, and Australia is expected to offer attractive growth prospects. Additionally, the rising need for flexible office spaces in the region is anticipated to drive the demand for cloud-based collaboration solutions.

Furthermore, the competition in the Asia Pacific region is highly concentrated by domestic players with system integrators and service providers becoming highly competitive. This competitiveness has aided service providers in enhancing and expanding their service portfolio in developing countries. The resulting continuous improvement of infrastructure in these countries is leading to the growth of cloud services capabilities, subsequently boosting the regional market growth. 

Impact of COVID-19

The COVID-19 pandemic has augmented the need to deploy UCaaS solutions in organizations worldwide. The rising incidences of lockdown in various regions and the adoption of Work-From-Home (WFH) initiatives have resulted in the adoption of UCaaS solutions. Deploying unified communications as a service tools and solutions at an enterprise level enables cross functioning teams and remote employees to indulge in effective communication practices. These tools are expected to allow companies to scale the WFH initiatives for driving cultural developments and workflows.

COVID-19 has also prompted companies to change their digital transformation initiatives drastically. The pandemic is expected to encourage several organizations and industries to integrate desktop tools, software support, chat, video, and online collaboration on a global scale. Such developments are expected to offer higher collaborative capabilities to employees and aid organizations in diverting their resources toward essential business operations. This paradigm shift in work scenarios is expected to further provide an impetus to the adoption of cloud-based communication practices, which is critical in transforming the market dynamics.

Key Companies & Market Share Insights

The key companies are integrating their services and products with ML and AI to offer differentiated solutions. For instance, RingCentral, Inc. partnered with Gong.io, Velvetech, and ThetaLake to enable the delivery of post-call real-time AI-enabled voice analytics services to its global customers. ALE International is working with IBM Corporation to include automation and AI in its communication network. Service providers, who were earlier providing only UCaaS solutions, are now including a host of other communication services via the cloud to expand their service offerings. This strategy has offered them a competitive advantage over other players. Furthermore, large enterprises are expected to provide an impetus to the market for unified communication as a service. Big players are recognizing and showcasing the strength to capitalize on the potential of cloud technology. Some of the prominent players in the unified communication as a service market include:

• 8x8, Inc.

• ALE International

• Avaya Inc.

• Cisco Systems Inc.

• IBM Corporation

Unified Communication As A Service Market Report Scope

Segments Covered in the Report

This report forecasts revenue growths at global, regional, and country levels and provides an analysis of the industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global unified communication as a service market report based on deployment, industry vertical, and region:

• Deployment Outlook (Revenue, USD Billion, 2016 - 2027)

  • Public Cloud

  • Private Cloud

• Industry Vertical Outlook (Revenue, USD Billion; 2016 - 2027)

  • Automotive

  • Education

  • Healthcare

  • BFSI

  • Hospitality

  • Real Estate

  • Legal

  • IT & Telecom

  • Others

• Regional Outlook (Revenue, USD Billion, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

  • Europe

    • Germany

    • The U.K.

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • MEA