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UCaaS market no longer just for SMBs

With the UCaaS market expected to double its revenue over the next three years, service providers are ready to take on enterprise customers at Enterprise Connect 2015.

The UC as a service (UCaaS) market has ramped up as enterprises are turning to the cloud to simplify their UC deployments.

"We've seen for three years now a pretty strong uptick in UC as a service," said Irwin Lazar, analyst and service director at Nemertes Research.

The global UCaaS market closed out 2014 with revenue at $2.1 billion and is expected to more than double its revenue over the next three years, reaching $4.9 billion, said Bill Haskins, senior analyst and partner at Wainhouse Research. The number of global UCaaS users is also expected to increase, growing from 15.5 million users in 2014 to 38 million users in 2018, he said.

Lazar said more than half the companies surveyed in Nemertes' benchmarks use Office 365 or Google Now for UCaaS. About 20% use VoIP as a cloud service and 60% use a cloud-based Web conferencing service.

Since the emergence of UCaaS, it has been viewed as an option for small and midsize businesses, but not enterprises, as the cloud services offered by providers weren't sufficient for larger organizations.

"Historically, there were a few missing pieces from solutions that made it difficult for large enterprises to transition to the cloud," said Michael Fitzpatrick, CEO of UCaaS provider ConnectSolutions.

Ten years ago, enterprises invested heavily in on-premises systems for their communication needs and needed their Capex to run its course, Fitzpatrick said. Now, those systems are reaching the end of their lifecycles and CIOs and other IT decision makers are looking to the cloud to support UC.

Many large organizations try and fail to deploy UC systems because deployments can be difficult. "That's a full-time job and very few IT organizations have the staff, expertise and domain experience to deploy," Fitzpatrick said.

Haskins said enterprises are now more comfortable with putting communication tools like video and email in the cloud. "Enterprises have been dipping their toes more in the cloud in different areas," he said.

Enterprises are also making the leap into UCaaS because network carriers like Verizon and AT&T added hosted services to their portfolios over the last five years, Haskins said. It was a logical move for a carrier to offer cloud communication services to enterprises because they were already on the carrier's network.

UCaaS is a hot topic at Enterprise Connect this year as IT professionals are looking for information and advice on how to successfully move their UC apps to the cloud.

Fitzpatrick said the consolidation of vendors, demand among employees for a unified work experience and the effectiveness of UC tools are all driving the UCaaS conversation at Enterprise Connect.

IT professionals are also looking for help in finding the right UCaaS provider. Haskins said a good provider not only has a proven track record for its services, but also helps its customers successfully deploy UCaaS through training and support.

"When you're talking about how employees collaborate and communicate with each other and with people outside the organization, it has to be done right," he said.

Next Steps

How well do you know UCaaS?

Why enterprises need UCaaS now

Cost a driver and inhibitor of UCaaS

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Unless you're really doing something massive innovative with your unified communications, it doesn't make a lot of financial sense to keep that stuff in house.
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