Microsoft, Zoom Gain, Cisco Loses, in Worldwide UC&C Market

Microsoft and Zoom unified communications and collaboration (UC&C) revenue increased in 2022, while Cisco’s declined, as the overall market reached $59.3 billion.

That’s according to IDC’s Worldwide Quarterly UC&C Tracker. The market grew nearly 8% year over year, and roughly 2% compared to the previous quarter, up to $15.2 billion in the fourth quarter.

Rich Costello is IDC’s senior research analyst of UC&C.

IDC’s Rich Costello

“Together, UCaaS and UC collaboration apps continue to drive growth in the worldwide UC&C market,” he said. “The provider landscape is evolving in major ways as we head into 2023 with pressure on providers to increasingly monetize their existing base while attracting new customers.”

Worldwide UC&C Market Share

Microsoft‘s total worldwide UC&C revenue was $6.1 billion in the fourth quarter, up almost 4% sequentially and more than 18% year over year. For the full year, Microsoft’s revenue totaled $23 billion, an increase of nearly 21% over 2021 and representing almost 39% of the worldwide UC&C market.

Zoom‘s UC&C revenue increased slightly more than 1% sequentially and 3.4% year over year, to almost $1.1 billion in the fourth quarter. For the full year, Zoom’s revenue grew 6.6% to $4.2 billion, representing approximately a 7% share of the worldwide UC&C market.

Cisco‘s UC&C revenue totaled $984 million in the fourth quarter, down more than 12% compared to the third quarter and down 8.5% year over year. For the full year, Cisco’s revenue fell more than 6% to $4.2 billion, representing a 7.4% share of the worldwide UC&C market.

Businesses invest in UC collaboration and UCaaS solutions to improve employee and customer interactions. When it comes to telephony communications solutions in use today, roughly two-thirds of organizations are using at least some cloud-based UCaaS as part of their primary approach. And look for UCaaS adoption to continue, IDC said.

Network-related spending remained strong in 2022 despite inflation, regional conflicts and lingering channel issues. Speed, network resiliency and productivity are key drivers of the market.

Market Segments

UC&C market specifics include:

• Hosted voice/UC public cloud (UCaaS) revenue grew 16.2% year over year and 4.4% sequentially in the fourth quarter. For the full year, public cloud UCaaS revenue increased 16.6% to $21.2 billion.
• UC collaboration revenue, including video conferencing software and cloud services, increased 5.9% year over year and .3% compared to the previous quarter to $7.3 billion in the fourth quarter. For the full year, UC collaboration revenue increased 9.1% to $28.8 billion.
• IP Phones revenue declined 8.3% year over year and 14.3% sequentially in the fourth quarter. For the full year, however, IP phones revenue increased 2.5% to almost $2 billion. IP phone shipments declined 20.6% year over year and 14.2% compared to the previous quarter. For the full year, IP Phone shipments were down 6.5% year over year.
• Video conferencing room endpoints declined 2.2% year over year, but increased 13.7% sequentially to $471 million in the fourth quarter. For the full year, revenue declined 3.1% to $1.8 billion.
• Huddle room endpoints increased 19.5% year over year and 18.1% sequentially to almost $287 million in the fourth quarter. For the full year, revenue increased 11.5% to $1.0 billion.

UC&C Market by Region

In North America, total UC&C revenue declined 1.7% compared to the previous quarter, but increased 7.1% year over year in the fourth quarter to $7.1 billion. For the full year, total revenue was up almost 9% to $28.1 billion.

EMEA saw total revenue grow 4.2% sequentially and 5.5% year over year in the fourth quarter to $4.3 billion. For the full year, total revenue was up 7.2% to $16.8 billion.

APJ experienced total revenue growth of 7.4% sequentially and 12.4% year over year to about $3.3 billion in the fourth quarter. For the full year, total revenue was up 14.8% to almost $12.2 billion.

LATAM total revenue increased 5% sequentially and 13% year over year in the fourth quarter to more than $580 million. For the full year, total revenue was up 16.3% to over $2.2 billion.