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The global UCC market continues to evolve at a rapid pace. Migration to cloud-based subscription services is accelerating as organizations gain confidence, existing CPE assets near end of life, and current cloud services deployments expand to more sites, users and applications. The gap between “as a service” offerings and other consumption models is increasingly wide. In 2018, revenues from the services segment again increased year-over-year, approaching two-thirds of total global UCC revenues. Services growth is generated at the expense of revenues from UCC endpoints, software and platforms, which are each declining in the mid-to-low single digits annually. Developers are pushing the technology envelop to enhance their value propositions, further accelerate customer migration to next-generation products and services, and earn more wallet share. A vigorous focus on user experience, mobile-first solutions, enhanced management and next-generation capabilities leveraging artificial intelligence, machine learning, automation and rich-analytics are driving development of tomorrow’s UCC industry. This Outlook provides key data points on the industry's above movement as noted above. The intent is to provide validation and guidance for enterprise decision makers, providers and investors alike. There is little doubt that cloud services are the future for the majority of workloads and use cases however, competitive hybrid offers are required to reach all market tiers and industry segments. Providers must acknowledge customer requirements to evolve at their own pace, preserve and utilize existing assets, mitigate potential disruption, and adhere to individual deployment and consumption preferences for mission-critical and data-sensitive applications. As such, breadth of portfolio and effective pricing are keys to overall competitiveness, yet effective implementation, reliability, quality, security and support will ultimately win the day.M&A will progress as providers seek to strengthen their portfolios, expertise and footprints. Customers will benefit as well, from streamlined vendor management, more holistic solutions, stronger roadmaps, and more clear migration paths that are needed for their digital transformation initiatives. Simultaneously, the industry is susceptible to the activities and influences of technology industry giants, which may already participate in the UCC space, as well as those that may enter in the near or mid-terms.In the next few years we will see continuation of the above trends. All the while various segments will become increasingly intertwined. Similar to the convergence of web and video conferencing, unified communications as a services (UCaaS), contact center as a service (CCaaS), communications platforms as a service (CPaaS), and rich media collaboration (e.g., multi-media conferencing, team messaging, etc.) will become more tightly integrated within the UCC stack. The net-effect will be more frictionless sales, implementation, adoption and utilization that have been the general goal for UCC from its outset.Author: Robert Arnold
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