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Market Growth Returns to Normal as UCaaS Proves its Merits Amid Recent Macro Disruptions
22-Dec-2023
Europe
Market Research
K982-01-00-00-00
TE_2023_478
Macro-economic and socio-political trends have considerably impacted the European UCaaS market since early 2020. The COVID-19 pandemic-related lockdowns triggered a massive shift to remote and hybrid work, disrupted supply chains and business models in many industries, and highlighted the need for digital transformation.
Many economies are now affected by the Russo-Ukrainian war that has further disrupted fuel and food supply chains and has contributed to inflation, increased consumer and business anxiety, and a pervasive economic slowdown. With conditions further impacted by increased unrest in the Middle East, European providers have experienced longer sales cycles, reduced deal sizes, and an overall increased caution in technology investment decision making.
UCaaS has shine in turbulent times. The services have provided the flexibility customer organisations need to navigate quickly evolving customer preferecnes, work styles and business models. European UCaaS installed base and revenue growth both increased in 2022 as organisations adjusted to new realities following disruptive conditions in 2020 and 2021 due to the COVID-19 pandemic. Both metrics are expected to continue stable low double-digit growth trajectories through much of the forecast period. Growth rates and trajectories will vary across sub-regions. This is driven by the differing GDP recovery rates, divergent current penetration levels, the distinctive market propensity to adopt hosted IP telephony and UCaaS services, as well as economic and political exposure to the war in Ukraine and the Middle East.
Competitive pressures and inflationary conditions combined to help stablise prices in 2022. Price declines were more tangible with lower-end service bundles. However, the addition of new features helped providers maintain relative price stability for more full-feature seats.
The European market remains highly fragmented with the top 20 providers holding a combined 38.3% of installed seats at the end of 2022. Providers in the Others category combined to own 24.3% of installed UCaaS seats. The top five providers combined for approximately 37.4% share of installed users.
Key growth factors in the past have included network ownership, brand recognition, channel relationships and commitment to hosted IP telephony and UCaaS services. Amid shifting macro conditions providers with cloud-native solutions and a compelling web-based or mobile user experience have faired well in comparison to providers that require new circuits and/or hardware installations to deploy their services.
Mergers and acquisitions (M&A) have been reshaping the European competitive landscape in recent years. M&As and partnerships, among other factors, will lead to changes in provider business models. Many providers will emerge from these with more diversified portfolios and go-to-market strategies leveraging both direct sales and a variety of partner resale models.
Author: Robert Arnold
Why is it Increasingly Difficult to Grow?
The Strategic Imperative 8™
The Impact of the Top 3 Strategic Imperatives on the European UCaaS Industry
Growth Opportunities Fuel the Growth Pipeline Engine™
Scope of Analysis
Scope and Market Definitions
Scope and Market Definitions (continued)
Scope and Market Definitions (continued)
Scope and Market Definitions (continued)
Scope and Market Definitions (continued)
Key Competitors
Key Growth Metrics
Distribution Channels
Growth Drivers
Future Remote Work Plans
UCC Solution Investment Drivers
Cloud or Mobile PBX Services Investments Among Current Users
Growth Restraints
Macro Conditions’ Impact on Investments
Forecast Assumptions
Forecast Assumptions (continued)
PBX/Cloud or Mobile PBX Investments for Remote Desk Workers
PSTN Calling Plan Investments for Remote Desk Workers
PBX/Cloud or Mobile PBX Investments for In-Office Desk Workers
PSTN Calling Plan Investments for In-Office Desk Workers
Mobility is Essential, But Not Critical for All Customers Yet
Importance of Soft Phones
Importance of a Native Mobile Dialer with a Business Phone Number
Desktop Business Calling App (Desktop Soft Phone) Adoption
Mobile Business Calling App (Mobile Soft Phone) Adoption
Installed Users and Revenue Forecast—Total UCaaS Market
Net New User Forecast—Total UCaaS Market
Installed Users Forecast by Sub-Region—Total UCaaS Market
Installed Users and Revenue Forecast Analysis—Total UCaaS Market
Installed Users and Revenue Forecast Analysis—Total UCaaS Market (continued)
Installed Users and Revenue Forecast Analysis—Total UCaaS Market (continued)
Pricing Trends and Forecast—Total UCaaS Market
Pricing Trends and Forecast Analysis—Total UCaaS Market
Pricing Trends and Forecast Analysis—Total UCaaS Market (continued)
Pricing Trends and Forecast Analysis—Total UCaaS Market (continued)
Pricing Trends and Forecast Analysis—Total UCaaS Market (continued)
Pricing Trends and Forecast Analysis—Total UCaaS Market (continued)
Competitive Environment
Service Provider Market Share Analysis by Installed Users—Total UCaaS Market
Service Provider Market Share Analysis by Installed Users—Total UCaaS Market (continued)
Competitive Dynamics
Competitive Dynamics (continued)
Platform Vendor Market Share Analysis by Installed Users—Europe UCaaS Market
Current Cloud or Mobile PBX/UCaaS Solutions/Providers
Future Cloud or Mobile PBX/UCaaS Solution Providers
Importance of a Fully Integrated UCaaS Solution
Growth Opportunity 1: Mobile-first UCaaS
Growth Opportunity 1: Mobile-first UCaaS (continued)
Growth Opportunity 2: AI Infusion
Growth Opportunity 2: AI Infusion (continued)
Growth Opportunity 3: Cloud-connected Calling Enablement
Growth Opportunity 3: Cloud-connected Calling Enablement (continued)
Growth Opportunity 4: CPaaS and the API Economy
Growth Opportunity 4: CPaaS and the API Economy (continued)
Growth Opportunity 5: Contact Centre
Growth Opportunity 5: Contact Centre (continued)
Growth Opportunity 6: Vertical and Frontliner Strategies
Growth Opportunity 6: Vertical and Frontliner Strategies (continued)
Competitors Included in “Other”
Your Next Steps
Why Frost, Why Now?
List of Exhibits
List of Exhibits (continued)
Legal Disclaimer
List of Figures
- Total UCaaS Market: Key Growth Metrics, Europe, 2022
- Total UCaaS Market: Distribution Channel Analysis, Europe, 2022
- Total UCaaS Market: Growth Drivers, Europe, 2023–2029
- Future Remote Work Status Plans, Europe, by 2026
- Drivers for Communications and Collaboration Solutions Investments, Europe, 2023–2025
- Expected Change in Cloud or Mobile PBX Services, Europe, 2023–2025
- Total UCaaS Market: Growth Restraints, Europe, 2023–2029
- Current Political and Macro-economic Conditions’ Impact on Digital Transformation Strategy and Investments, Europe, 2023
- PBX/Cloud or Mobile PBX Investments for Remote Desk Workers, Europe, 2023–2025
- Expected Change in PSTN Calling Plan Investments for Remote Desk Workers, Europe, 2023–2025
- PBX/Cloud or Mobile PBX Investments for In-Office Desk Workers, Europe, 2023–2025
- Expected Change in PSTN Calling Plan Investments for In-Office Desk Workers, Europe, 2023–2025
- Importance of Soft Phones, Europe, 2023
- Importance of a Native Mobile Dialer with a Business Phone Number, Europe, 2023
- Desktop Business Calling App (Desktop Soft Phone) Adoption, Europe, 2023–2025
- Mobile Business Calling App (Desktop Soft Phone) Adoption, Europe, 2023–2025
- Total UCaaS Market: Installed Users and Revenue Forecast, Europe, 2021–2029
- Total UCaaS Market: Net New User Forecast, Europe, 2021–2029
- Total UCaaS Market: Installed Users by Sub-Region, Europe, 2021–2029
- Total UCaaS Market: Average Price Forecast, Europe, 2022–2029
- Total UCaaS Market: Percent Share of Installed Users, Europe, 2022
- Total UCaaS Market: Percent Installed Users by Platform Vendor, Europe, 2022
- Number of Current Cloud or Mobile PBX Solutions/Providers Customers Use, Europe, 2023
- Planned Changes in the Number of Cloud or Mobile PBX Solutions/Providers Used by Customers, Europe, 2023–2025
- Importance of a Fully Integrated UCaaS Solution that Includes Meetings and Messaging, Europe, 2023–2025
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| Deliverable Type | Market Research |
|---|---|
| Author | Rob Arnold |
| Industries | Telecom |
| No Index | No |
| Is Prebook | No |
| Keyword 1 | European UCaaS Market Analysis |
| Keyword 2 | Communication Technology Insights |
| Keyword 3 | Unified Communications as a Service Forecast |
| List of Charts and Figures | Total UCaaS Market: Key Growth Metrics, Europe, 2022~ Total UCaaS Market: Distribution Channel Analysis, Europe, 2022~ Total UCaaS Market: Growth Drivers, Europe, 2023–2029~ Future Remote Work Status Plans, Europe, by 2026~ Drivers for Communications and Collaboration Solutions Investments, Europe, 2023–2025~ Expected Change in Cloud or Mobile PBX Services, Europe, 2023–2025~ Total UCaaS Market: Growth Restraints, Europe, 2023–2029~ Current Political and Macro-economic Conditions’ Impact on Digital Transformation Strategy and Investments, Europe, 2023~ PBX/Cloud or Mobile PBX Investments for Remote Desk Workers, Europe, 2023–2025~ Expected Change in PSTN Calling Plan Investments for Remote Desk Workers, Europe, 2023–2025~ PBX/Cloud or Mobile PBX Investments for In-Office Desk Workers, Europe, 2023–2025~ Expected Change in PSTN Calling Plan Investments for In-Office Desk Workers, Europe, 2023–2025~ Importance of Soft Phones, Europe, 2023~ Importance of a Native Mobile Dialer with a Business Phone Number, Europe, 2023~ Desktop Business Calling App (Desktop Soft Phone) Adoption, Europe, 2023–2025~ Mobile Business Calling App (Desktop Soft Phone) Adoption, Europe, 2023–2025~ Total UCaaS Market: Installed Users and Revenue Forecast, Europe, 2021–2029~ Total UCaaS Market: Net New User Forecast, Europe, 2021–2029~ Total UCaaS Market: Installed Users by Sub-Region, Europe, 2021–2029~ Total UCaaS Market: Average Price Forecast, Europe, 2022–2029~ Total UCaaS Market: Percent Share of Installed Users, Europe, 2022~ Total UCaaS Market: Percent Installed Users by Platform Vendor, Europe, 2022~ Number of Current Cloud or Mobile PBX Solutions/Providers Customers Use, Europe, 2023~ Planned Changes in the Number of Cloud or Mobile PBX Solutions/Providers Used by Customers, Europe, 2023–2025~ Importance of a Fully Integrated UCaaS Solution that Includes Meetings and Messaging, Europe, 2023–2025~ |
| Podcast | No |
| Predecessor | K741-01-00-00-00 |
| WIP Number | K982-01-00-00-00 |