CF20: 2023's Top UCaaS Providers You Should Know
Microsoft, Avaya, Cisco and Zoom are all here. See who else made it and why.
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Microsoft Teams has emerged in a short period of time as a leading UCaaS player, said S&P Global’s Raul Castanon.
“It continues to add numerous third-party integrations and product certifications,” he said. “This should enable it to continue expanding its global footprint and cement its position in the market.”
“Microsoft owns the desktop so they are going to be impossible to displace,” said Jon Arnold. “They’re doing too good of a job. And this is the time now when most of the market has kind of conceded you’re not going to beat Microsoft, you’re just not going to throw them out. They have too many advantages that others don’t. So it’s either you’re with them or you’re against them almost.”
Avaya still belongs among noteworthy UCaaS providers, Arnold said. Avaya filed for chapter 11 bankruptcy in February and has since completed its last major milestone of financial restructuring, officially reducing its total debt by more than 75%.
“The good news is they’ve come out of their latest round of chapter 11 in a very healthy state,” Arnold said. “And one of the things that they’ve done is reworked their agreement with RingCentral, and that’s a very positive development. That partnership is when customers sign up for RingCentral, those customers remain Avaya customers, whereas with the previous agreement, those customers signed on RingCentral’s paper so they were losing control of some of that base. I still view them as a bona fide UCaaS player. I would keep them in the mix like anybody else because RingCentral isn’t the only thing they have with UCaaS. They do support their premises-based customers with premises-based solutions, too, So they’re very much there.”
Zoom has successfully expanded beyond its initial positioning as a video conferencing provider to become a leading UCaaS player with strong brand recognition, Castanon said. This includes new email and calendar offerings announced last year and the recent acquisition of employee experience platform Workvivo.
“Zoom now offers a communication and collaboration suite akin to Microsoft Office 365’s capabilities,” said Omdia’s Tim Banting. “Adding email, calendaring, UC, contact center and AI-driven features put Zoom in an enviable position relative to its rivals.”
Cisco is a top UCaaS provider with its Webex solution, according to Arnold and Castanon.
“As far as anyone who’s going to try to displace Cisco or Microsoft, or Zoom, no way,” Arnold said. “It’s just too late. They’re too well entrenched at this point.”
AWS, like Google, belongs among major UCaaS providers simply because of its size, Arnold said.
“They’re kind of on the fringes because they’re a bit like Google, no one’s really sure how badly they want to be in this market or not,” he said. “They don’t need to be here, but their sheer size makes them impossible to ignore.”
Dialpad is a player that emerged during the microservices era, Castanon said. Its cloud-native platform architecture and proprietary AI technology place it in a strong position to differentiate its UCaaS and CCaaS offerings.
“They’re doing good things,” Arnold said. “They may not have the mindshare of a RingCentral, but they’re doing AI as well as anybody else. And they’re innovating a lot. And they’re a very entrepreneurial player. They’re still trying to disrupt the market a little bit.”
8×8 is among top UCaaS contenders, Arnold said.
“I was at their analyst event last month in New York and they are definitely trying to stay in the game,” he said. “Their stock price is really low. Their CEO changed over. They’re not a top-of-mind brand, but where they play, they play well. And so you could argue can they really make it in this market and stay long term? You could argue if somebody really wanted to take them out, that could happen because they’ve been around forever. But they’re still definitely in the game.”
RingCentral is a top contender in UCaaS, Castanon said. In March, RingCentral launched RingSense, an AI platform that brings conversation intelligence to business communications and collaboration. The product leverages AI and enables organizations to turn their conversation data into insights. RingCentral officials say RingSense will unlock productivity and drive business outcomes.
Intermedia remains a strong contender with its partner-centric go-to-market (GTM) approach, Castanon said.
“Its recently introduced Intermedia Unite Archiving helps customers preserve, protect and access information across different channels, including chat, SMS, phone call recordings and voicemails,” he said. “[That] should enable it to further differentiate and deliver a compelling value proposition.”
Banting said Intermedia is an up-and-coming prospect in the UCaaS market.
Ooma is a noteworthy UCaaS provider, Castanon said.
“Recent Omdia research shows that at least 40% of companies have more than one UCaaS platform for internal collaboration, with most organizations using multiple UCaaS solutions to communicate and collaborate externally,” Banting said. “Despite uncertainty around the economy, few businesses are consolidating their platforms onto a single service.”
BCM One is a top UCaaS provider, and it’s noteworthy for its acquisitions, Arnold said. It acquired SkySwitch, a prominent white-label UCaaS provider, in early 2021. And then it closed out 2021 by acquiring CoreDial. That deal positioned BCM One as one of the largest channel-focused UCaaS providers in the United States.
“They are investor-backed, private equity, so they have money to make acquisitions to consolidate and become a bigger player,” he said. “They want to grow.”
Castanon said Alianza is a top UCaaS provider due to its strong partner-centric approach. In December, Alianza commited $200 million to R&D for accelerating cloud communications growth for service providers. That was after increasing engineering and development spending by 44% in 2022.
GoTo is among top UCaaS providers, Castanon said. In February, GoTo announced the launch of GoTo Customer Engagement. This new multichannel solution brings together GoTo Connect’s phone system and customer communication tools, analytics and the digital channels so customers can reach a larger audience and grow their business, all within a shared unified inbox.
Slack is a noteworthy provider in UCaaS, Arnold said. Salesforce completed its $27.7 billion acquisition of Slack in 2021.
“Slack is not a platform, it’s mostly messaging so they call it a team messaging platform,” he said. “But you know what? You can do most of what you need to do in Slack. And because Salesforce is there, who knows where they’re going to take this stuff? We don’t know. Slack might be an orphan the way Skype was with Avaya at one point. But on the other hand, you can’t rule them out.”
Vonage is a top contender in UCaaS, Castanon said. Last summer, Ericsson completed its $6.2 billion acquisition of Vonage.
“UCaaS innovation is replicated quickly, with little sustainable differentiation between key vendors,” Banting said. “Therefore, the ability of a vendor to continue to capitalize and sustain growth is slowing and highly dependent on replacing or complementing premises-based telephony. Consequently, the UCaaS market is looking for new market adjacencies and technologies to differentiate.”
Google Cloud belongs among top UCaaS providers, Castanon said. And Arnold said Google is among top providers for just their sheer size and market footprint.
“They kind of go in fits and starts,” Arnold said. “It’s never clear how serious a player they want to be. They’re in the market. They do everything everybody else does. But this is such a small thing for for Google, with ChatGPT driving everything. They’re much more concerned about stuff like that than Google Meet or Google Suite. If anything, they keep everybody honest, I suppose, because Google is just so big and powerful.”
Mitel belongs among noteworthy UCaaS providers, Arnold said. In January, Mitel announced it’s in negotiations with Atos to acquire Unify, the UCC services businesses of the Atos group. The company said Unify’s portfolio, partners and talent would significantly expand Mitel’s scale and offerings.
“I wouldn’t call Mitel a tier one, but I would certainly call them a leading tier-two player,” Arnold said. “And this is their 50th year in business, so that’s quite a milestone in this industry. So I’m not going to be the guy who says, ‘Oh no, not Mitel, no way.'”
2600Hz is a fringe UCaaS provider worth watching, Arnold said. 2600Hz’s cloud communications platform, Kazoo, offers UCaaS, CPaaS and CCaaS solutions. For developers building their own telephony apps, 2600Hz offers 300-plus APIs and provides access to the building blocks of the platform.
Nextiva is among noteworthy UCaaS providers. This week, Nextiva announced its acquisition of Simplify360, an AI customer experience platform based in India. Simplify360 uses AI and automation to enable more than 5,000 global businesses to deliver customer support across multiple channels, including email, live chat, social media, online reviews and e-commerce.
Nextiva is among noteworthy UCaaS providers. This week, Nextiva announced its acquisition of Simplify360, an AI customer experience platform based in India. Simplify360 uses AI and automation to enable more than 5,000 global businesses to deliver customer support across multiple channels, including email, live chat, social media, online reviews and e-commerce.
UCaaS providers continue to see strong market demand as hybrid work and economic uncertainty have made UCaaS an even more compelling option for many organizations.
UCaaS remains a highly competitive market with little room for newcomers. And UCaaS providers are continuously adding new capabilities to keep up with competitors.
According to Fortune Business Insights, expect the global UCaaS market to grow from nearly $30 billion in 2021 to nearly $70 billion in 2028. That’s a compound annual growth rate (CAGR) of more than 13%.
This is our third annual “CF20” focused on UCaaS providers, and the sixth if you count our previous CP lists. Analysts share their views on what it takes to succeed with the technology. It includes an updated list and fresh views on changes in the competitive landscape.
Pressure on UCaaS Providers
Raul Castanon, senior research analyst at 451 Research, part of S&P Global Market Intelligence, said with organizations looking to streamline and reduce or eliminate unnecessary expenses, the battle is shifting from “best of breed” to “best of suites.”
451 Research’s Raul Castanon
“UCaaS has been ahead of the curve with all-encompassing suites featuring messaging, presence, telephony and video conferencing capabilities,” he said. “However, there is increased pressure on vendors to deliver on the synergies that bringing these capabilities together can deliver. For instance, Microsoft Teams and Google Workspace will have an advantage in UCaaS with their productivity suites, and have already announced a tight integration between these, allowing users to communicate in real time while collaborating on a spreadsheet or document.”
The UCaaS space has experienced steady consolidation over the past few years, Castanon said. While there has been some M&A activity, this consolidation has been mostly the result of vendors exiting, namely vendors like Avaya, Mitel and others partnering with RingCentral to focus on other opportunities.
Expectations of UCaaS Providers Haven’t Changed
Tim Banting, Omdia’s Digital Workplace Practice lead, said customer demands haven’t changed. (Omdia and Channel Futures share a parent company, Informa Tech.)
Omdia’s Tim Banting
“The UCaaS market has always addressed the fundamental need to help a diverse, distributed, increasingly digital workforce communicate and collaborate more effectively and efficiently,” he said. “These platforms’ capabilities also extend to partners, suppliers and guests to unify extended teams (intercompany collaboration) and, typically, help teams to focus by collecting conversations and content in specific channels or rooms, creating a single repository for workflow. UCaaS platforms also provide increased transparency through centralizing content and discussions, which helps team members solicit ideas, garner feedback and build consensus with their colleagues.”
Plenty of Low-Cost Options for Cash-Strapped Organizations
Jon Arnold, principal of J Arnold & Associates, said there are a lot of low-cost UCaaS options for organizations impacted by economic uncertainty.
J Arnold & Associates’ Jon Arnold
“However, for companies that want to get a little more exploratory with things like virtual environments, metaverse, they’ll probably cut back on that a bit because that’s probably a little too much of a frill for now,” he said. “So that might put a bit of a hold back on adopting those virtual workplace environments.”
Consolidation is continuing because the “space is so crowded,” Arnold said.
Based on feedback from analysts and recent news reports, we’ve compiled a list, in no particular order, of 20 UCaaS providers that are making the most of the competitive landscape and charting success. The list in the slideshow above offers a mix of well-known providers as well as lesser-known companies that are making big strides in UCaaS.
Want to contact the author directly about this story? Have ideas for a follow-up article? Email Edward Gately or connect with him on LinkedIn. |
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