The on-premises market continued its downward trend amid the pandemic, says IDC.

Edward Gately, Senior News Editor

October 9, 2020

9 Min Read
UC Roundup

The global unified communications and collaboration (UC&C) market will retain most of the momentum gained from the start of the COVID-19 pandemic through the end of 2020.

That’s according to IDC. UC&C revenue grew 25.1% year over year and 12.4% quarter over quarter to $11.5 billion in the second quarter, according to IDC’s latest QView.

In the second quarter, the UC&C market, including video conferencing software and cloud services, saw revenue grow almost 47% year over year and more than 22% sequentially, to $5.5 billion. The managed/hosted voice/UCaaS market, both public and private cloud, grew 20.4% year over year and 7.4% for the quarter.

Enterprise video conferencing systems rebounded from a weaker first quarter. They grew 21.5% from the first quarter and nearly 27% year over year. In the meantime, the on-premises market continued its downward trend amid the pandemic, declining almost 22% year over year in the second quarter.

From a geographic perspective, the UC&C market saw positive results across the globe in the second quarter.

Among company highlights:

  • Microsoft’s global UC&C revenue reached $4 billion, up 19.5% from the first quarter and up 49.1% year over year. That represented 35.2% of the global UC&C market in the second quarter.

  • Cisco’s global UC&C revenue reached $1.3 billion, up 11.7% quarter over quarter and 4.4% year over year. The company was second overall with 11.1% global market share in the second quarter.

  • Zoom‘s global UC&C revenue more than doubled (103.2%) over the first quarter and more than 363% year over year, totaling almost $649 million in the second quarter. Zoom’s overall UC&C market share was 5.6%.

  • Avaya’s global UC&C revenue was up 6.6% quarter over quarter and 7.1% year over year. That’s despite a 30.3% decline in the IP telephony/UC systems segment. Avaya’s UC&C and UCaaS revenue more than offset this decline, increasing 37.6% quarter over quarter and 104.4% year over year.

  • RingCentral’s global UC&C revenue grew 5.1% sequentially and 33.7% year over year. The company’s overall UC&C market share stood at 1.9% in the second quarter.

To find out more about the growth and outlook of the UC&C market, we spoke with Rich Costello, IDC’s senior research analyst of UC&C.

Channel Partners: Have UC&C companies been able to keep up with increased demand and other challenges associated with the pandemic?


IDC’s Rich Costello

Rich Costello: For the most part, yes, the UC&C venders and service providers that supply software and cloud-based communications and collaborative solutions have been able to meet the challenge during the pandemic and, in my opinion, did yeoman’s work in initially scaling-up their offerings to support a sudden crush of new remote users, while meeting and maintaining high levels of performance and security. In many cases, these vendors and providers helped organizations meet work-from-home (WFH) requirements with minimal disruption.

There was more of a challenge with some UC&C hardware vendors meeting the huge demand in the second quarter for things like screens, cameras, headsets, accessories, etc., due to pipeline disruptions in the Asia Pacific region. But security was also a challenge for some vendors – Zoom in particular – in a few well-publicized breaches during the height of the early pandemic, making the company a target of competitors. But to Zoom’s credit, it recognized its issues and began a months-long program in 2020 to enhance its security and privacy capabilities.

CP: Has the pandemic and increased demand for UC&C products and services shaken up the competitive landscape? Have some companies gained market share over others?

RC: In the video collaboration area in particular, Zoom’s financial performance was …

… exceptional, as well as the company’s significant increase in visibility and mindshare worldwide. The Zoom name even became universally synonymous with doing a video meeting. But several other UC&C vendors and providers also did well in the second quarter.

CP: Is the on-premises market expected to continue declining even as employees start returning to the office? If so, why?

RC: The migration to the cloud, even for large enterprise customers, has begun in earnest, at the expense of on-premises voice and UC&C solutions. IDC expects that trend to continue even as workers return to the office. Having said that, we do expect that some companies with specific requirements around management, control, compliance and/or security might prefer to maintain on-premises systems for some applications, probably in some sort of hybrid deployment environment (i.e. a mix of cloud and on-premises solutions).

CP: Are you expecting the third and fourth quarter QViews to maintain the growth in the second-quarter QView?

RC: The IDC UC&C Qview forecast calls for 20.9% year-over-year total market growth for the full-year 2020. Our growth expectations for the third and fourth quarters, although still strong, are lower than the 25.1% year-over-year growth we saw in the second quarter. Video and collaboration will remain hot areas in the second half of 2020. But we also expect the growth of the cloud-based voice component of UCaaS solutions to resume and increase in the second half of 2020, beyond what we saw in the second quarter.

RingCentral-Red Box Partnership

RingCentral has partnered with Red Box, a U.K.-based enterprise voice platform provider, to deliver voice and video capture with UC.

The integration will deliver access to RingCentral voice and video recorded conversations via Conversa by Red Box. It’s a newly launched open microservices-based enterprise voice platform.

The partnership aims to ensure delivery of real-time recorded audio and video conversations captured from the RingCentral platform.

Sangeeta Walsh is RingCentral‘s senior director of platform product marketing.


RingCentral’s Sangeeta Walsh

“This partnership will benefit RingCentral channel partners who cater to customers in highly regulated industries such as financial services and health care,” she said. “The product integrations between RingCentral and Red Box will enable these customers to leverage and analyze the data from their recorded audio and video conversations to drive compliance, business strategies and outcomes.”

This will benefit customers looking to move their communications infrastructure to the cloud, Walsh said.

Heavily regulated industries are required to record transcripts of all chats, messages, phone and video calls.

“Through this partnership, RingCentral and Red Box will enable customers in these industries to realize compliance and full strategic value of the data captured from their recorded audio and video conversations using AI,” Walsh said. “These capabilities will give RingCentral a leg up on competitors when targeting customers in these types of industries.”

“As a next-gen capture platform, Conversa is ideally placed to provide resilient compliance recording capabilities, as well as enabling joint Red Box and RingCentral customers to capitalize on the data captured by leveraging cutting-edge AI tools to drive …

… strategic business outcomes,” said Richard Stevenson, Red Box’s CEO.

Dialpad Gets Funding Boost

Dialpad has received $100 million in Series E funding, bringing its total funding to $220 million.

Omers Growth Equity led the round, with participation from existing investors. Dialpad’s valuation now exceeds $1.2 billion.

The funding follows Dialpad’s continued product development and growth. Its recent acquisition of Highfive expands Dialpad’s video offerings on mobile devices and introduces meeting room hardware.


Dialpad’s Mike Kane

“We will be investing heavily in our channel program,” said Mike Kane, Dialpad’s vice president of worldwide channel sales.

Dialpad is tripling the size of its channel team, Kane said. It’s also launching a new partner portal focused on partner enablement and increasing its channel marketing.

Furthermore, Dialpad will launch a new sales and professional services certification program, Kane said. It will identify strategic partners who invest their time with Dialpad.

“We’re constantly looking for new partners and relationships to work with both domestically and internationally,” he said.

Over the past 12 months, Dialpad has exceeded $100 million in committed annual recurring revenue (ARR). Furthermore, it has seen its cloud contact center business grow faster than any other product.

Dialpad has expanded globally by opening offices in Europe and Asia. Furthermore, it plans to extend its global presence with additional investments internationally.

“Dialpad’s channel partners are already winning market share at an increased rate with Dialpad’s UCaaS and CCaaS offerings,” Kane said. “We will be further developing our voice intelligence [real-time speech recognition, natural language processing (NLP) and sentiment analysis], which will enable our partner community to take the most disruptive, innovative offering in the UCaaS/CCaaS space.”

Partners will play a critical role in Dialpad’s next phase of growth, he said. The company also will launch an enhanced partner program and investing in strategic partners globally.

Blue Prism Unleashes Service Assist

Blue Prism, an intelligent automation company, has unveiled its new Service Assist that automates contact centers with an AI-powered digital workforce.

Service Assist delivers a real-time, 360-degree view of all customer interactions. It helps free up agents so they can be more responsive to better serve customers.

Service Assist automates system tasks that simplify and guide customer interaction tasks. Those include searching databases, scheduling callbacks and updating customer records.

These capabilities also include supporting attended automation, digital workforce orchestration, as well as integration with AI and ML tools to accelerate customer services. The result is streamlined contact center operations, increased agent satisfaction and higher customer satisfaction.


Blue Prism’s Bruce Mazza

Bruce Mazza is Blue Prism’s vice president of technology alliances. He said Blue Prism partners will benefit from Service Assist.

“Blue Prism Service Assist will be sold directly by Blue Prism as well our indirect channel,” he said. “This will fill a major void in a key market for many of our partners and presents an excellent opportunity for our channel partners who work in the contact center space.”

With contact centers on the front lines of the customer experience, this is a market that is particularly ripe for automation, Mazza said.

“We’ve already heard from our partners that they are excited to sell, support and deliver this solution,” he said.

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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