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UCaaS and SMB Adoption Expected to Propel UC Market Growth

By Laura Stotler TMCnet Contributing Editor

Unified communications and collaboration solutions are steadily migrating to the cloud, according to a new report from BCC (News - Alert) Research. The shift to the cloud is being fueled by increased adoption among SMBs, which also propelled the market value for UC&C offerings to $26.45 billion in 2015.

Increased SMB adoption along with innovative technologies and open platforms are expected to drive market growth to a whopping $62 billion by 2020, according to the report. And while on-premises deployment has been the standard configuration for UC offerings historically, the cloud is playing an increasingly larger role. In fact, the market for UCaaS is expected to reach $18 billion by 2020, growing at a healthy 22.5-percent CAGR. Hybrid deployments will experience the most growth over that five-year period, reaching $6.2 billion by 2020 and growing at a 28-percent CAGR.

“An aspect of the industry is the UC&C solution as a hosted or shared service in the cloud,” said Nandita Bhotika, analyst at BCC Research. “Private and public cloud-based UC as a service (UCaaS) solutions are expected to fuel the next phase of growth. The cost efficiencies and operational flexibility of these shared services are proving a potent model for market players. Although challenges in its adoption are still a concern, UCaaS is expected to give the UC&C market its needed boost."

Markets and Markets predicts an even more ambitious forecast for UCaaS, putting the market at $24.88 billion by 2020. Once again, the research firm attributes much of this growth to SMB adoption, particularly around the area of updating and simplifying communication processes at an affordable cost. SMBs are increasingly tasked with providing better customer service while increasing innovation and development, while simultaneously lowering operational and capital expenditures. Adopting cloud UC services and UCaaS can achieve these goals while helping SMBs adopt the latest communication technologies and tools.

The success of cloud-based models like Skype for Business (formerly Lync), Google, ShoreTel (News - Alert) and Cisco is also fueling growth of UCaaS, along with service providers like 8x8, Thinking Phone Networks and Orange. It’s also necessitating conferences and industry discussions, like the upcoming ITEXPO in Ft. Lauderdale, Fl. As SMBs increasingly search for more robust features and functionality from their communications systems at a competitive price point, UCaaS can be expected to grow exponentially and dominate the UC market.

Edited by Kyle Piscioniere