Services to Grab Increasing Share of UCC Revenue

**Editor’s Note: Read our list of 20 top UCaaS providers offering products and services via channel partners.**

Partners that provide unified communications and collaboration (UCC) services likely have a lot to look forward to in the coming years.

Services will reach 66 percent of revenue share from the $39 billion UCC market in 2019, as software, platform and endpoint revenues continue to steadily decline, according to Frost and Sullivan’s Global UCC Industry Outlook 2018.

The number of cloud UCaaS users, among the fastest growing segments, has exceeded 43 million, with net-new users expected to grow at a compound annual growth rate (CAGR) of 23 percent from 2016 to 2023.

Frost & Sullivan’s Rob Arnold

Frost and Sullivan expects customization and user adoption to be keys to ensuring UCC offerings deliver significant user and business benefits. UCC integration into workflows, automation, artificial intelligence (AI) and the Internet of Things (IoT) promises to enhance business outcomes, unlock next-level value, and produce greater return on investment, it said.

“Intensified competition and considerable price pressures are forcing providers and vendors to enhance their applications and services-based solutions portfolios,” said Robert Arnold, industry principal of conferencing and collaboration at Frost and Sullivan. “This will broaden their addressable market as well as expand cross-sell and up-sell opportunities. Providers’ future success will hinge on addressing the customer’s need for customized, reliable and flexible solutions, reducing costs and improving productivity.”

Transformations that are creating new growth opportunities include: as-a-service-based solutions and cloud services; integrating UCC with office productivity and other business software; new UC offerings such as IoT, social, IT, vertical and contact center UC; next-generation collaboration; social capabilities raising personalization to new levels; and adoption of hybrid solutions.

Intelligent networks, development of mobile-offerings support, network analysis giving way to app performance and usage, and prominence of video also are fostering opportunities.

“Progressive solutions such as AI, software-defined networking (SDN) and IoT are slowly making their way into enterprises, most of which have disparate networks, protocols and interfaces,” Arnold said. “For smaller organizations, these technologies may appear unattainable. Providers must recognize where most customers are in their readiness for such advanced capabilities and lay the necessary foundations for adoption. Security and privacy concerns, coupled with unclear IT strategy and managing multivendor solutions, will also need to be addressed.”