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Rapid growth in UCaaS market driven by range of vendors

11 Feb 2019
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New data from Synergy Research Group paints a pretty picture of the unified-communications-as-a-service (UCaaS) market.

The installed base of UCaaS subscribers is expected to grow with an average annual rate of 26 percent over the next five years, with different vendors leading in each segment - however, Synergy says this growth will be increasingly driven by enterprise customers.

Small and mid-sized businesses still account for almost 90 percent of all UCaaS subscribers, but the enterprise segment is growing far more rapidly. In 2018 the number of enterprise UCaaS subscribers grew by 57 percent while the mid-market and small business segments grew by 36 percent and 23 percent respectively.

As aforementioned, when it comes to UCaaS service providers each segment had a different market share leader. Fuze took out the enterprise sector, RingCentral the mid-market, and Mitel the small business.  Other notable UCaaS providers include Cisco (Broadsoft), 8x8, Vonage, LogMeIn and Broadview.

“UCaaS took off in the small and mid-market segments first. We are now seeing UCaaS growth rates in small businesses start to tail off a little, while growth in the mid-market remains strong,” says Synergy Research Group founder and chief analyst Jeremny Duke.

“But it is in the nascent enterprise segment where UCaaS growth is really booming.”

Total UCaaS subscriber numbers are now well over the eight million mark and have doubled since late 2015, with the market split between retail and wholesale business models. On the larger retail side RingCentral and 8x8 are the leading providers and in the wholesale Mitel and Cisco/Broadsoft lead. The worldwide market continues to be dominated by the US, with market development still being in the early days in most other countries.

“UCaaS penetration of the PBX installed base has barely passed the 10 percent mark so we project continued strong growth throughout the forecast period. UCaaS growth will be particularly strong in the enterprise market and also in countries beyond the US,” concludes Duke.