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UC As A Service Gaining Steam

Ask a UC&C watcher what's hot in enterprise communications these days, and chances are pretty good "UCaaS" will be among the first things out of his or her mouth.

As enterprises grapple with next steps to take for improving their communications and collaboration capabilities, cloud solutions are increasingly factoring into their decision making. We hear this on a regular basis, whether in conversations with UC&C analysts, consultants, and enterprise IT professionals, or in formal earnings statements each quarter.

Much of the focus is on UC as a service, with pure-play cloud communications companies like 8x8, RingCentral, and Fuze (formerly ThinkingPhones) garnering much of the attention. UCaaS players are seeing steady revenue growth in the 25%-to-30% range, one industry watcher recently told us. Recent company highlights bear that out:

  • 8x8 reported $60 million in revenue, a 25% year-over-year (YOY) increase, for its first-quarter fiscal 2017, ended June 30 (service revenue from midmarket and enterprise customers grew 44% in the same period, accounting for 52% of 8x8's total service revenue)
  • RingCentral tallied $92 million in total revenue for its second-quarter 2016, also ended June 30 (revenue from software subscriptions grew 34% YOY to $86 million)
  • Privately held Fuze doesn't disclose financials, but the company has reported that it's added more than 200 customers in the first half of the year

I point out these particular UCaaS providers, as not only do they come up often in our general UCaaS conversations, but also are among the five companies, along with BT and West, positioned in the "Leaders" quadrant of the "Magic Quadrant for Unified Communications as a Service, Worldwide" report Gartner published earlier this week.

As Gartner analysts Daniel O'Connell and Bern Elliot noted in the report, "UCaaS is now a viable alternative for many (not all) enterprise deployments." As such, it is seeing a transition from "early adopter phase" to "early mainstream phase," they said.

Read the rest of this article on No Jitter.