Microsoft Leads Gartner UCaaS Magic Quadrant, But There's a Catch

Microsoft leads Gartner's latest Magic Quadrant for unified communications as a service (UCaaS), though the vendor continues to bridge gaps in telephony through partnerships, and research and development.

Microsoft and Cisco landed at the top of the Leaders quadrant in Gartner's annual rankings. Next come Zoom, RingCentral and 8x8 occupying the Leaders quadrant. Google featured as the only company in the Challengers quadrant, and the Niche Players quadrant contained five companies: GoTo, Vonage, Dialpad, Sangoma and Wildix.

The research firm defines UCaaS as a multitenant, cloud subscription service with business telephony and collaboration features. The telephony side most importantly includes public switched telephone network (PSTN) connectivity, and the collaboration side includes messaging and meetings.

Cloud9's Andy Torres

Andy Torres, CEO of Cloud9 Technology Consulting, said the Gartner UCaaS Magic Quadrant has proven helpful in advising business customers on the wide field of UCaaS vendors and solutions.

"I educate clients on the differences among providers, discussing their strengths and weaknesses. Some are better suited for SMBs, while others excel in serving enterprise clients. Execution and customer support vary significantly, according to Gartner’s research," Torres told Channel Futures.

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Gartner called Microsoft Teams the "most popular choice" in UCaaS and credited its development of Copilot AI. The firm also credited Microsoft for possessing a wide range of PSTN connectivity options through programs like Operator Connect and Direct Routing.

However, observations from Gartner and channel partners highlight Teams' weaknesses in telephony.

"Show me the Microsoft UCaaS product. They're going say it's Teams. Well, tell me how Teams can can have basic UCaaS features and functionality on its own, without RingCentral, 8x8 or Zoom, and you can't," said Michael Agri, who advises and services UCaaS customers for North Atlantic Consultants.

Agri said he has found Teams lacking in features like call queues, auto attendants and call groups.

"These are all things that come standard with any UCaaS platform. Teams can't do that. You need to have the integration," Agri said.

North Atlantic's Michael Agri

Those concerns aside, the Microsoft 365 suite is one of the most popular software suites on the planet, and Agri said many customers have elected to use it. However, those clients depend on integrations with UCaaS vendors to get the features they need.

Gartner echoed that trend. It noted that Microsoft has launched a Queues application for Teams, but only for "lightweight, voice-only call center capabilities."

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"Organizations with advanced telephony use cases – such as SMS, CRM integration, attendant consoles and advanced call recording – find gaps in Microsoft Teams. Organizations with such requirements for a small group of users often adopt telephony specialist UCaaS solutions, then provide integration with Teams," the firm said.

Gartner at multiple points in its report cites the convergence of UCaaS and contact-center-as-a-service (CCaaS) platforms. Microsoft in the summer announced a new CCaaS offering, intent on matching a field of vendors that have launched integrated solutions.

UCaaS Providers and the Channel

Gartner's list of "Strengths" and "Cautions" provides interesting insights on how the research firm perceives the role of the indirect sales channel.

For example, it praises Cisco's depth of product features yet dings the vendor for relying on channel partners for support and management. The vendor in 2021 added an agent/advisor model — a notable move because in the advisor model, the vendor bears responsibility for managed services and often professional services.

But while criticizing Cisco for relying too much on partners, Gartner says Dialpad "lacks a deep community of systems integrator (SI) and value-added resellers (VARs), with expertise in implementing unique configurations and capabilities."

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If you ask a channel partner about their experiences with a UC vendor, their response might depend on their partnering model. Some vendors work predominantly with technology advisors (TAs) like Cloud9 and North Atlantic, while others might focus more on value-added resellers (VARs) and system integrators (TAs).

Torres said she has found RingCentral and Zoom to be "the most channel-friendly options."

"I’ve sold Microsoft Teams, but the implementation experience can be challenging. A customer of mine has struggled with support from 8x8, so we’ve stopped referring them," she said. "I lack experience with Cisco/Webex, but they don’t seem particularly channel-friendly."

Cloud vs. On-Prem

UCaaS, the cloud-based, as-a-service version of unified communications, has emerged as the "de facto" choice for businesses across most parts of the world, according to Gartner. It is the "preferred deployment model" for SMBs (fewer than 1,000 employees), "well-suited" to large enterprises (1,000 to 5,000) and has recently become a default for very large enterprises, Gartner wrote.

Gartner admits that some large businesses with significant investments in premises-based UC continue to maintain those systems. However, Gartner said vendors themselves may discontinue those platforms in the next five years.

"If organizations buy a new system today, they are unlikely to see significant innovation or enhancements during a typical five- to eight-year product life cycle. Most future enhancements (such as AI, mobility, analytics and advanced UX) will only be available on UCaaS platforms. Nonetheless, premises-based deployments will persist for reasons of regulation and the unavailability or unsuitability of UCaaS in specific region," Gartner wrote.

Hybrid solutions, often fueled by partnerships between hardware and software vendors, persist. That includes a recent agreement between Zoom and Mitel.