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Unified Communications
Market Trends

by Faulkner Staff

Copyright 2020, Faulkner Information Services. All
Rights Reserved.

Docid: 00018409

Publication Date: 2012

Report Type: MARKET

Preview

Unified Communications (UC) is a business capability that provides a single, integrated interface for voice and
data, such as Web, audio, and video conferencing, as well as for instant
messaging (IM), whether mobile or fixed. This type of platform allows for the
convergence of these applications so that employees – either in-office or remote
– can manage, send, and receive voice mail, text messages, faxes, IMs, and e-mails.
Options are also usually available to set up conferences, share documents, and access portals and third-party apps
when connected to the Internet or
corporate network. Most products today are found in a standalone suite. However, using integrated best-of-breed applications from multiple vendors is
also a viable choice. This report takes a look at the UC market in greater
detail.

Report Contents:

• Executive Summary
• Market Dynamics
• Market Leaders
• Market Trends
• Strategic Planning Implications
• Web Links
• Related Reports

Executive Summary

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Unified Communications – or "UC" – may be defined as the use of any product or service
to assist in methods of enterprise communications.

The software allows for the convergence of applications so that employees, in the
office or at a remote location, can manage, send, and receive voice mail, text
messages, faxes, IMs, and emails; set up conferences; share documents; and
access corporate Web portals and third-party applications, as long as they are
connected to the corporate network via a mobile device, PC, or even a desktop
phone – both wired and wireless.

The Unified Communications market will ultimately only be as successful as
the goals it enables end users to achieve. Driven by the need for speed on the
part of the millennial generation entering the workforce, ever-increasing
mobility, convergence, and new delivery models, Unified Communications is
growing rapidly but must show value and
offer robust security. With Microsoft, Cisco, and other firms among the top companies
for on-premise or
hybrid solutions, a number of other contenders have emerged in the market as
well. As with virtually all other technology applications,
cloud versions of UC products are becoming ever more important.

Market Dynamics

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Solutions
today that focus on just one specific feature, such as
instant messaging or file sharing, are not enough to support teams who
need to work together effectively. That’s where Unified Communications comes in.
This business capability provides a single, integrated
interface for voice and data; suites seamlessly integrate voice, video, instant
messaging, email integration, and mobility.

Unified Communications is still not
truly unified, and the market remains fairly flat. But as the workforce becomes
increasingly mobile and accustomed to instant interaction, the problem may be
that there are too many ways to communicate (especially with the explosion of
social media used at and for work), and Unified Communications – whether best of
breed or single vendor – may become the solution. 

As Unified Communications' use increases, users' demands of the capabilities
encompassed are also increasing. For example, the mobile workforce has grown to
the extent that it now completely relies upon wireless connectivity to do its
job.

Drivers

The Unified Communications market is being driven
by several factors, including the need to reduce costs and increase speed, an
increasingly mobile work environment, technology advances, and new delivery
methods.

Cost Reduction. The difficulty in proving
ROI has been a stumbling block for the Unified Communications market for years,
with estimates often ranging upwards of hundreds of dollars per subscriber – not
including a full range of services or devices – with difficult-to-quantify
productivity and efficiency gains even for the most mobile employees, such as
sales professionals or executives who spend time traveling around a business
campus and offsite. However, because users often have too many ways to
communicate over a variety of devices, with Unified Communications, interaction
can be simplified and less disjointed – and hence more effective, with enhanced
productivity and quicker interactions as the result for workers and businesses
alike. Unified Communications also presents the opportunity to save on real
estate costs by offering the options of telecommuting and virtual offices. Soft
cost reductions are becoming more strategically important.

Social Network Integration. Increasingly, UC products must support
integration with social
networking and other applications. Research firm Forrester states that
"functions increasingly need to simply be a 'click away' from the software
environment (such as customer relationship management [CRM]) that users spend
their time in."

Mobility. Users
demand real-time personal communications in multiple forms: voice, email, IM,
text messaging, video, etc. When users have to manage multiple mobile devices,
it can be time consuming and unproductive. With Unified Communications, users
can work more effectively from one interface and streamline their business
processes – especially with more capable mobile devices, such as the iPhone and
iPad. Consequently, Unified Communications is reaching a new level of usage and,
in some cases, expectation, as businesses want anywhere, anytime communication
capability, with presence and contact management being offered as value-added
features. The ability to support and manage mobile communications is thus
becoming a critical factor in the Unified Communications market. Some companies
are also looking at Unified Communications as a green technology in that it can
help cut down on travel and therefore emissions and pollution.

Unified Communications as a Service (UCaaS). Cloud
computing is both a driver and an obstacle (see below). Google uses the cloud to
deliver its (limited) Unified Communications offerings, but its example may take
off, especially due to cost savings and consequent faster ROI. Moreover, UCaaS –
as opposed to on-premise solutions – may offer a harder, quicker, more
measurable ROI as well. With Software as a Service (SaaS) becoming a more
established model, UCaaS can leverage this momentum.

Obstacles

The Unified Communications market has been
hindered by a global economic recession, poor messaging that confuses potential
customers, legacy solutions, new issues introduced by mobility and
network-centric devices, as well as ever-present fears about security, now
compounded by cloud computing.   

Legacy Solutions/Vendors. Enterprises
often do not want or need an entire Unified Communication package; hence,
customers still look to solutions from multiple vendors or try to leverage
existing legacy solutions. This leads to potential challenges with
interoperability, as well as the lack of one throat to choke when there are
issues.

Mobility/Network/Device Issues. Although
mobile capabilities play an integral part in promoting Unified Communications solutions, they also introduce a new set of issues to resolve.
Telecommunications/IT departments have to find ways to manage the wide array of
services and also control availability, access rights for each application, and
Local Area Network (LAN) traffic, not to mention devices. IT departments have to
maintain quality of service for the applications, as well as handle availability
and performance-related problems. Control also has to be established at the
user-interface level in handheld and network devices. Moreover, certain devices
only work on certain networks – and this, too, can present obstacles to uptake

Security Concerns. Because Unified Communications solutions can encompass multiple vendors and services
(IM, video, presence, voice, data, wireless, etc.), security needs to be robust.
One of the main challenges is that each component may have different security
requirements. 

Market Leaders

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Microsoft, Cisco, and Avaya have led the Unified Communications market for some
time now, and remain the leaders.

Microsoft Teams for UC

Microsoft offers Microsoft Teams for Unified Communications, as well as other
elements to support UC within Microsoft 365. This "hub for teamwork" brings
together chat, meetings, calling, Office 365 apps, and third-party tools. The
release is built with enterprise-grade security and compliance capabilities.

Cisco UCC

Cisco Unified Communications and Collaboration (UCC) suite connects people, information, and teams, helping to
enable comprehensive and effective collaborative experiences. With Cisco UCC,
client companies can connect companies, vendors, partners, and customers; access
and share video; facilitate team and virtual interactions; make mobile devices
extensions of the corporate network; and innovate across the value chain. The
product line uses the network as a platform for collaboration, allowing users to
deploy applications onsite, on-demand, and in blended deployment models. The
suite includes cloud-based, one-premise, and WebEx Edge for calling, as well as
a set of UC apps to expand support.

Avaya "Future Ready" UC

Avaya’s all-in-one cloud communications solution is designed to support "how
you’re working now." The platform offers always-on continuous collaboration.

Other Offerings

Other top competitors include HPE Aruba’s Unified Communications protfolio,
Oracle’s UC, and free and tiered subscription options such as Zoom.

Market Trends

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Given the growing reliance on remote and teleconferencing solutions amidst
global pandemic, free services such as Zoom have emerged as popular alternatives
in an already growing market alongside the top companies.

Need for speed clearly
drives the UC market. Uptake by new customers is
slow, and penetration remains fairly low, as companies already deploying
piece-meal Unified Communications solutions just add more pieces, rather than
more companies jumping on the bandwagon. This trend may be due in large part to
the fact that companies want to get more bang out of the bucks that they have
already spent or allocated, instead of outlaying large sums of cash for new
solutions that are not yet plug and play and so require integration costs to get
disparate pieces to work together. Unified Communications as a
Service (UCaaS) began to take off in 2019, delivering enterprise-wide messaging,
video conferencing, and collaboration tools. The beauty of UCaaS is that since
it is cloud-based, companies can use these platforms to scale to their
individual needs and receive the customization that they want.¹  

Unified Communications portfolios by definition are not necessarily built to work together, and many companies opt for best in breed rather
than single-vendor solutions. To penetrate new customers, providers with both
successful ecosystems and vendor maturity (such as Microsoft) will enjoy
more growth, as customers will get the best of both worlds. Thus, Microsoft's
acquisition of Skype helped it to attract more Unified Communications customers,
since they get best-in-breed and a suite together. A consistent experience
across delivery mechanisms will also go a long way to gaining customers.

The increasing use of artificial intelligence (AI) is helping to drive the
Unified Communications market. AI is expected to improve UC in the coming years
by quickly interpreting and assessing data. Frontier Communications predicts the
following for AI and UC: 

1. Smarter bots – By combining UC with the deployment of bots, the spread of
   information becomes more efficient and better tailored. 
2. Improved calls and meetings – Future business calls may include facial
   recognition and intelligent speaker tracking. 
3. Personalized customer relationships – AI gathers data to deliver
   intuitive, tailored experiences, enabling employees and customers to build
   better relationships. 
4. Speech-to-text – When integrated with UC, these tools can dictate emails
   or translate voicemails into readable text.²

Strategic Planning Implications

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Enterprises should evaluate a Unified Communications solution as part of a
strategy to converge data and voice networks or move to IP telephony, but
ultimately let the needs of the enterprise determine adoption. Thus, customers
need to consider the following when weighing a Unified Communications solution
to future-proof business:

• Strategic Roadmap. Customers must
  decide on what parts of their enterprise needs unifying and when. Should the
  approach be vendor-neutral/multi-vendor, best in breed, or single source?
  What is the maturity of the pieces? Do vendors have a strong track record of
  successful deployments and references, as well as a strong ecosystem? Which
  approach offers the most cost savings – both hard and soft? What do workers
  want and what do they actually use?

• Piecemeal vs. Platform Approach. Customers with limited budgets (SMBs,
  in particular) can look into rolling out Unified Communications in waves
  rather than deploying a new platform all at once. In this way, customers can
  try out Unified Communications on a small scale until value is demonstrated,
  before going all out.
• Cost of Missed Communications. Missed calls not only cost
  time, they cost opportunities. By using messaging, chat, and mobile devices,
  workers can be available in real time to meet customers’ needs.
• Single Number Access. Having a single number can simplify
  communications, as well as enhance responsiveness and efficiency.
• Improved Workflow. With efficient access to people and information,
  workers can be more productive.
• Going Green. By enabling remote and virtual workplaces, Unified Communications
  can cut down on travel and real estate expenses – and the
  emissions associated with both.
• Social Media. Millennials have expertise in
  social media and, very importantly, are habituated to it. Thus, customers
  need to consider how a Unified Communications solution can leverage the
  capabilities of their rising workforce.

Vendors need to consider the following to avert stumbling blocks and attract customers:

• Clear Messaging. Marketing for Unified Communications needs to focus on the business benefits rather than the
  technology. In other words, vendors need to speak to customer needs.
• Integration Issues. Integrating
  disparate platforms is always challenging. Vendors need to leverage
  partnerships and alliances to ensure that interoperability is not an issue.
• Standards-Based Development. Software
  developed should support Session Initiation Protocol (SIP) which will make
  it easier to create interfaces between systems.
• Security. Security remains a big
  concern for customers. Vendors need to highlight encryption and other
  security measures already in place for their solutions.
• Unified Communications as a Service (UCaaS).
  Unified Communications may be cost prohibitive to many businesses,
  especially smaller ones. Low upfront costs and quick and easy deployment
  make UCaaS an attractive option for SMBs that may be unable to afford Unified Communications
  otherwise. More vendors should investigate this
  delivery option.
• Free Trials. Customers typically like a
  “try before you buy” option, and vendors should consider this,
  especially since adoption and penetration have been slow.
• Hard Savings. Customers want to know
  the hard savings, not just the soft ROI. Money in the bank in the short term
  is a powerful motivator.

Web Links

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• Avaya:http://www.avaya.com/
• Cisco:http://www.cisco.com/
• HPE Aruba Networks:
  https://www.arubanetworks.com/
• Frontier Communications: https://internet.frontier.com/
• Microsoft:http://www.microsoft.com/
• Oracle: http://www.oracle.com/
• Zoom:
  https://zoom.us/https://zoom.us/

References

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¹ "Unified Communications Market Trends." 8×8. Accessed
December 14, 2020.
² "How AI Is Changing the Face of Unified Communications."
Frontier Communications. August 13, 2019. 

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