The State of Unified Communications as a Service in 2020

By Mike Dolloff, Chief Revenue Officer

Remember when Gartner discontinued the UC magic quadrant last year? That was prescient, wasn’t it?!

With 2020, Unified Communications as a Service (UCaaS) has continued its strong rise at an even faster pace than everyone anticipated as communications needs have fundamentally shifted for large portions of the business world.

Working closely with the major technology players and with hundreds of companies around the globe we put together an infographic to help provide some context to the various players, themes, and key differences in the UCaaS space:

UCaaS Trends in 2020

Clear as Mud

There is little doubt now that the most desirable UCaaS space is being able to provide a solid voice offering plus video, messaging, and meetings. In practice, that could mean one provider for all UC needs, or an organization using several different technologies that just play nicely together and feel unified at the end-user level. This unified communications party has quite the mix of when, how, and where the attendees are showing up!

UC & CC

Like some family reunions, this could get awkward. UCaaS and CCaaS players generally approach the other in one of the following 3 ways:

  • Use what you want (agnostic) – e.g. Microsoft
  • Use what we have (native) – e.g. 8×8
  • Use what we prefer (partnerships) – e.g. Fuze

The trend has been towards the agnostic and native approaches. There have been increasing acquisitions of native developments bringing together UCaaS and CCaaS under one roof (e.g. RingCentral developing their CCaaS, Talkdesk developing their UCaaS). This is understandable as UCaaS providers try to get the increased per-seat pricing and customer stickiness that the contact center brings. Interestingly though, there has been a generally accepted best-of-breed approach to UCaaS and CCaaS where Unified Communications providers are also cooperating to make their respective solutions play nicely with the leaders in the CCaaS space. Some of that is driven by the growth of Zoom and Microsoft Teams – two UCaaS solutions that don’t have a native contact center solution.

The Times They are a Changin’

Like your extended family after your winning lottery ticket, the UCaaS market has swelled in the past few years. Whether it’s COVID-19, the economy, competition, capital drying up, or something else… there should be some serious consolidation to keep your eyes on.

3rd or 4th Time’s a Charm?

Other than Zoom, no other UCaaS company potentially benefitted as much from the rapid shift to work from home than Microsoft, specifically with their Teams product. What went from a convenient way to message about lunch locations or to run web meetings quickly became a lifeline for internal and external communications overnight. It remains to be seen how the Metaswitch acquisition plays out, but Microsoft’s general reluctance to take on the telco side of UCaaS has made for quite the gold rush of other UCaaS providers marrying their strong voice capabilities to Microsoft’s highly adopted and collaborative Teams tool via the Direct Connect service (e.g. RingCentral, 8×8, Genesys). Right now, Microsoft needs those players to round out some weaknesses, and those players are relying on Microsoft, but the future of this is worth keeping an eye on.

Work From Home

This one is obvious but the overnight shift of WFH from a novelty to reality has fundamentally changed the UCaaS landscape. The need for video, interoperability, unifying channels, simplifying collaboration… all of those things were nice-to-haves when most folks were in offices, but now they’re how companies can continue to function together with many companies required to work remotely. There are now organizations that are embracing change and adapting or those spending precious time wishing for the good old days to return.

No Longer on an Island

UCaaS has moved more mainstream and upmarket as organizations have thought of their communications needs reaching into workflows, CRMs, productivity suite software, and moving from phone + email to messaging, video, and other meetings. This has created some excellent efficiencies, but also some more confusion as several tools can offer the same communications features. It has also expanded the stakeholders into the UC decision-making to include sometimes representatives from sales, marketing, dev, database, etc. Continuing interoperability and simplification of the end-user experience (and administrator’s experience) are certain trends we anticipate to continue.

I’m a Big Kid Now

UCaaS was born in the SMB segment, but the adoption in midmarket and enterprise organizations has increased dramatically. With that come growing pains but also some nice gains – a lot more attention is being spent on security, interoperability, and scalability which is a good thing for customers.

The New Sheriff in Town

If this wasn’t already obvious, APIs, integrations, and interoperability has become the hallmark of much of the SaaS world, and UCaaS is no exception. Some of the fastest-growing stars in the UCaaS world happen to have open APIs, deep app libraries and generally play nicely with others. Expect that to continue accelerating.