UCaaS Market, North America, 2024–2030

Compelling benefits, such as flexible capacity adjustments, rapid access to innovative features and capabilities, CAPEX avoidance, and ability to outsource routine solution management to an expert third party, will drive a steady shift to cloud communications services over the forecast period. Communications upgrades are increasingly a key part of holistic digital transformation projects and perceived as a strategic imperative across organizations looking to stay agile amidst rapid change. Increased demand for work flexibility and pervasive adoption of hybrid work models compel organizations to replace legacy solutions with UCaaS to enable work from anywhere, anytime, on any device and network of the users’ choice.
Collaboration-first customer decision making is enabling new provider approaches, whereby video meetings and team collaboration solutions create pull-through for cloud PBX adoption as an add-on, rather than PBX sales as the main sales motion. Untapped potential among frontline workers and opportunities to more tangibly impact vertical workflows, combined with advancements in mobile UCaaS, wearables, IoT, CPaaS and APIs, are expanding the addressable market for flexible business communications solutions.

Artificial intelligence (AI)-driven innovation, including leverage of proprietary and third-party large language models (LLMs) and generative pre-trained transformers (GPTs), will define the future of business communications and determine provider success in the years to come. AI-powered features and services provide numerous benefits—e.g., improve knowledge management, augment human intelligence, boost productivity, and automate workflows.

Leading UCaaS providers are incorporating proprietary and third-party LLMs and GPTs into their platforms to accelerate innovation, enhance customer value, and differentiate from competitors. AI-powered capabilities are evolving from transcriptions, translations, chatbots, and call/meeting summaries to virtual agents, copilots, and robust analytics. Ability to monetize AI-powered capabilities will be critical for provider success as advancing market maturity shrinks addressable opportunities and increases price pressures.

Despite increasing market saturation and intense price pressures in the North American market, both UCaaS seats and related revenues grew at double-digit growth rates in 2023 and are forecast to sustain strong growth rates in the near term. Growth rates in the mid and long terms will decline considerably as most midmarket and large organizations adopt cloud communications for certain locations, users, and business sites, and keep premises-based solutions in other parts of their telephony environments. Net new users will decline over time as the market matures.

Author: Elka Popova