Industries around the world are currently changing the way they use Unified Communications (UC). This evolution affects how enterprises deploy new and improved tools and applications to enable them to deliver greater productivity and achieve more successful teamwork within their organizations. Highly evolved UC is known to be a key component to attracting and retaining the best workforce.
In this article, we summarize ten trends that are shaping the burgeoning UC market and how these trends will affect the UC ecosystem as a whole.
1- Concentration of Traditional UC Vendors
Over the past few years there has been a notable acceleration in the concentration of principal traditional UC software vendors. This trend could increase dramatically in the next months as the demand for traditional on-premise UC market, which peaked in the early 2000s, continues to decline at a steady pace and the market moves to the different models. Some market studies indicate that the value of the legacy UC market is going to fall approximately 10% per year, although the on-premise customer base is still huge. Recent examples in the legacy market concentration changes include the acquisition of Nortel by Avaya, Alcatel by China Huaxin Post, Unify by Atos, and Astra by Mitel, which all have a low value/amount of acquisition. The fierce competition between giants Cisco and Microsoft for first place leaves us wondering who is going to win third place as the top traditional UC vendor.
2016 is likely to see new mergers and acquisitions in video technologies that are driving the collaboration landscape in UC. For example, the acquisition of Polycom by Mitel, and Thinkingphones is now Fuze. Another battle currently waging is between traditional UC players who are looking to acquire new players to the market. For example, Microsoft seems to have thought about acquiring Slack for a staggering $8 billion.
2- The Old UC On-Premise Model is History
The traditional model that was based on PBX systems deployed on the customer premises is no longer the preferred choice for any enterprise that provides UC solutions to their employees. Very few new systems are sold on this antiquated model these days, therefore, most traditional vendors are now selling add-ons to their installed customer base.
There are several underlying reasons for this evolution away from on-premise offerings:
Acquisition and maintenance costs have become too high. CIOs no longer agree to pay annual maintenance fees (which are sometimes as much as 20-25% of the capex) as maintenance releases become progressively less feature-rich and, more often than not, have a low value to cost ratio.
On-premise systems lack the agility and scalability of more modern products and infrastructures. Adding new features or applications to on-premise systems are time-consuming and resource-hungry tasks. The new Y and Z generations entering the workforce do not want these clunky features and systems but are looking to use more user-friendly and customizable mobile or personal applications. Currently only 2% of the 15-18-year old generation uses a traditional landline phone, a statistic that surprises no one.
Legacy systems are complex and hard to use. Despite all efforts to simplify Unified Communication, many users still complain about the poor integration, unintuitive user experience, and high complexity of those solutions. Across most enterprises, these reasons are the leading causes of the low use of UC tools.
More to come in our next article about two more trends in the UC evolution and details of new UC vendors entering the market!
