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Evaluating Microsoft’s Impact on the Enterprise Communications Ecosystem
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For over a decade Microsoft has made concerted efforts to establish itself as a major provider of real-time business communications solutions, including enterprise voice and unified communications (UC) services. After gaining a considerable share in the premises-based communications systems market, Microsoft now aspires to capitalize on growing customer adoption of cloud solutions, in general, and hosted/cloud private branch exchange (PBX) and UC as a service (UCaaS), in particular.Microsoft’s extensive technology acumen and market power make it a formidable force in the business communications and productivity tools space, compelling competitors to keep a close eye on its product roadmap and go-to-market strategy. Therefore, Microsoft’s frequent changes in strategic direction, including the recent transition from Skype for Business Online to Teams and strong push for Microsoft Phone System (formerly Cloud PBX), have caused simultaneously excitement, concern and confusion among businesses, technology developers, resellers, service providers and other market participants. Frost & Sullivan believes that Teams and Phone System can significantly enhance Microsoft’s competitive position in the cloud communications market, if certain conditions are met. Overall, Microsoft Teams and Phone System are likely to experience rapid growth in the next six to seven years. Recent and pending solution enhancements will reinforce Microsoft’s competitive position and enable it to accelerate customer acquisition in the future. Microsoft’s determined foray into the cloud communications space, accompanied by frequent technology and strategic shifts, is likely to affect other market participants in various ways:• Provide more options for businesses looking to adopt compelling cloud communications solutions, but also cause confusion and hesitation to move forward with solution upgrades and replacements.• Create certain integration/interoperability challenges, but also offer growth opportunities for partners delivering solutions (e.g., infrastructure, endpoints, software) that complement Microsoft’s products and services.• Delay sales, but also expand product and services opportunities for resellers as well as implementation, professional and managed services partners.• Pose an immediate competitive threat (including price pressures, customer churn or delayed decision making) to other hosted cloud communications providers, but also help accelerate competitor innovation and compel providers to more effectively differentiate via solution functionality, service quality and reliability, and customer service and support.Market participants must watch Microsoft’s strategy and cloud solutions roadmap closely to respond quickly and effectively to changes that can potentially have a significant impact on their business.This study provides an overview of Microsoft’s position in the business communications market, including estimated installed user base and other metrics. It also discusses recent and upcoming enhancements of Microsoft cloud communications solutions, including Microsoft Skype for Business, Teams and Phone System. Finally, this study analyses the impact of Microsoft’s cloud communications portfolio and strategy on the enterprise communications ecosystem.
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