Unified Communication As A Service Market Size, Share & Trends Analysis Report By Deployment (Public Cloud, Private Cloud), By Industry Vertical (IT & Telecom, Healthcare), By Region, And Segment Forecasts, 2021 - 2028

Report Overview

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.

Unified Communication as A Service Market Trends

For more than a decade, UCaaS has been a thriving industry. The technology promises a flood of new, integrated communications devices that will assist businesses in achieving a variety of benefits, including collaboration, improved corporate procedures, and lower overall communications expenses. Vendors who specialize in UCaaS services focus on making their products simple to acquire, deploy, and maintain. A greater emphasis has been placed on exploiting previous user experience as a significant tool for building new solutions and improving existing ones.

The enterprises are witnessing a rapid adoption of Artificial Intelligence (AI), and Machine Learning (ML) enabled communication solutions. AI in the UCaaS sector is paving the way toward an increasingly connected future. Organizations are deploying AI-based UCaaS for changing the way companies’ structure their workflows, decision-making processes, and strategy planning. For instance, Avaya Inc. has created an AI voice assistant application for desk phones, and Amazon released Chime a cloud-based UCaaS.

Additionally, due to the significant uptake of UCaaS services by SMBs over the last several years, suppliers have moved their focus to SMBs, which previously did not constitute the core market. UCaaS was once thought of as a separate application area; but, in recent years, companies have begun to include UC services as part of bigger apps and work areas. Increased demand for real-time communication has allowed vendors to offer Web RTC solutions, to facilitate faster video streaming and group chats in client devices. Companies aim for UCaaS services that help them achieve an overall improvement in the experience of the users working remotely and those at their desks.

Increased demand for real-time communication has allowed vendors to offer Web RTC solutions, to facilitate faster video streaming and group chats in client devices. Companies aim for UCaaS services that help them achieve an overall improvement in the experience of the users working remotely and those at their desks.Artificial Intelligence (AI) and Machine Learning (ML) advancements in the communications sector have provided opportunities for UCaaS companies. AI and machine learning skills enable new features like intelligent chatbots and predictive intelligence. The way businesses arrange their workflows is always evolving as a result of AI.

Deployment Insights

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.

Industry Vertical Insights

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.

Regional Insights

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, healthcare providers, government bodies, 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 predicted to develop significantly over the forecast period as a result of the region's continued digitization and growing mobile workforce. People can work remotely thanks to the aggressive implementation of high-speed internet at competitive prices and the rapid growth of smartphones in the region, which is driving businesses to use UCaaS solutions. In addition, the presence of a AI-development hub in a number of Asian countries has contributed in the growth of a number of organizations that provide services which is related to AI to clients across the globe. During the forecast period, this has been and will continue to be the driving factor behind the adoption of UCaaS solutions and platforms in the area.

Asia Pacific (APAC) is envisioned to be the market leader in the forecast period, closely followed by Europe. Increasing 4G penetration and the growing number of multinational companies operating in the region is surging the demand for UCaaS solutions. Furthermore, organizations are keen on moving their UC solutions directly to the cloud and enjoy the benefits of reduced capital expenditure, thereby bolstering the demand for UC solutions.

The growth in the Asia pacific region can be attributed to the rising emphasis on cost-cutting as well as demand for collaboration in the region. Sectors such as BPO (Business process outsourcing), BFS (Banking and financial services), LPO (Legal process outsourcing), telecom, automotive, and hospitality have been turning to UCaaS delivery model to enable efficient collaboration and communication as a single service. Another reason for the increasing adoption of UCaaS is cost saving by cutting on capital and operations expenditure on IT infrastructure development.

Key Companies & Market Share Insights

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.

Unified Communication As A Service Market Report Scope

Global Unified Communication As A Service Market Segmentation

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