Unified communications experiencing fastest growth ever in the midst of Covid-19

With the Covid-19 pandemic redefining the way in which people work, years’ worth of digital transformation has occurred in just the past few months, leading to a marked uptick in the penetration of unified communications as a service (UCaaS), according to a study from Avant Research & Analytics.

The 2020 state of disruption report set out to provide enterprise technology leaders with a contemporary and relevant overview of UCaaS for the next six to twelve months, taking data from a survey of 500 enterprise decision-makers.

It revealed enhanced UCaaS growth and UCaaS penetration, plus various characteristics companies encountered as they migrated from PBXs and other telephony systems to today’s unified service-oriented cloud-based solutions.

Among the top line findings from the report was that the consensus of the analyst community points to rapid growth in the UCaaS space, and that customer interest in UCaaS spiked 86% in the midst of the Covid-19 pandemic.

In addition, technical differentiators were found to be very difficult for vendors to maintain, since competitors were quickly adopting similar or identical features. Other key market drivers include video, collaboration and digital transformation.

In terms of the underlying network infrastructure that firms had, MPLS posted an overall footprint of 18%, though that number spiked to 62% in the 2,500 to 10,000 seat range.

Software-defined wide-area networking (SD-WAN) was in place at 6% of locations, with its largest presence of 26%, also in the 2,500 to 10,000 seat range. SD-WAN continued to score highest in smaller companies, while MPLS dominated larger enterprises, particularly at the cores of those networks.

Looking at key vertical industries, the study found that healthcare/medical posted the highest growth rates, with the consulting/business services growth rate following closely behind. The remainder of the verticals trail the two leaders in a relatively close-knit cluster. In terms of UCaaS penetration, healthcare/medical and legal tied for first place in the 2021 projection after Avant Research measured both verticals at relatively average levels in 2019.

From a revenue perspective, the study showed relatively consistent uptake across revenue bands. For example, companies of $1m to $10m moved an average of 49.5% of their phones to UCaaS in 2019, and they anticipate an average of 68.8% will transition to UCaaS by the end of 2021. The strongest forthcoming uptake appeared to be in the 10,000 to 50,000 seat range, although organisations of all sizes planned to invest in UCaaS, especially in 2021.

Avant also saw UCaaS monthly recurring revenue increase 29% in the 12-month period beginning April 2019. Customer interest in UCaaS spiked 86% in the midst of the pandemic, culminating in a major increase in the March timeframe at the height of the coronavirus pandemic, and the shift towards work-from-home environments.

Nearly a quarter of respondents reported that they were considering a UCaaS solution because their legacy system was falling out of warranty, thereby making the move to UCaaS timely.

In terms of the evaluation process for investing in UCaaS, out of 684 responses, 14% were still considering, 56% still learning about the solution category and 30% were already looking at providers. The most requested UCaaS features included voicemail-to-email, click-to-dial, presence, call reporting, and enhanced integration for various apps. All were within 4% of one another.

In terms of how they would deploy UCaaS, around two-thirds were not looking to bundle different services from the same UCaaS provider, preferring a combination of their own knowledge plus the expertise of their IT teams or trusted advisor. Almost two-thirds (64%) of the sample did not want to bundle services from their UCaaS provider. Out of those who did want to, 10% said that they would bundle SD-WAN and the same percentage circuits.

As regards what was delaying companies’ migration to UCaaS, bandwidth issues at certain sites was the most common issue, indicated by 51%. This was followed by concerns about the learning curve 36%, legacy contract has punitive terms for early termination (33%), lack of budget (30%), the company was just “kicking tires” (24%). Only 6% said that they had completed migration to UCaaS.