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COVID-19 Accelerates Growth, but Success Varies Widely by Provider
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COVID-19 has wreaked havoc across the globe. If the epidemic continues to spread unabated, it is likely to continue to considerably impact trade and commerce patterns, GDP growth rates, employment and technology investments.Drastically-reduced travel and a massive shift to work-from-home models to avoid contagion have accelerated adoption of cloud services to remain connected. Cloud services can benefit remote workers and help set up temporary teams and offices. While this trend has more tangibly impacted demand for meeting and messaging services, cloud calling services have also received a boost either as temporary or long-term solutions to ensure fast decision making and effective project completion despite the decline of in-person meetings. Many UCaaS providers saw expansion of existing accounts to support work from home, as well as an increase in activation and use of apps/services that customers already had but were under-utilized (e.g., telework apps, mobility, soft clients, conferencing). These advanced features enable providers to expand their footprint/increase penetration of installed accounts and prove value of broader application suites to increase ARPU.Truly economical and agile UCaaS solutions—from packaging and pricing to provisioning and management—experienced greater acceleration during the pandemic and among the growing work-at-home customer base. Plug-and-play solutions available for purchase and provisioning via digital channels provided a lifeline for many SMBs and small/temporary remote teams. UCaaS bundled with mobile services, such as Verizon One Talk, or included as part of broader productivity and collaboration suites, such as Cisco Webex, Microsoft 365 and Google Workspace, or enabled as a convenient add-on to popular meeting solutions, such as Zoom Phone, experienced more rapid adoption during the first wave of the pandemic.As various trends set in motion by the pandemic offset each other, UCaaS user growth in 2020 will be slightly higher than our earlier projections, which took into account adjusted 2018 and 2019 data. Previously-reported historical user and revenue numbers were adjusted to exclude certain hybrid UC deployment scenarios, as a result of which our updated market forecast follows a new trajectory. In 2021, accelerated cloud migration due to the permanent shift to more pervasive remote work will be dampened by the lagging impact of the recession on the telecom sector. Assuming no events with a drastic short-term impact similar to that of the massive move to work from home in 2020, growth rates beyond 2022 will continue to decline due to increasing market maturity.This study provides a thorough analysis of the North American UCaaS market, including technology and market trends, growth projections, market share assessment and growth opportunity identification. Industry participants can use this research study to benchmark their visions and strategies against important market trends and competitor best practices.Author: Elka Popova
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