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unified communications

Microsoft Skype for Business Strategically Positioned

November 10, 2016

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Microsoft Skype for BusinessThe Unified Communications (UC) Market is forecasted to grow to $28 billion by 2020, according to Wainhouse Research.  Analyst are reporting a consistent transition from on premise based UC solutions to hosted UC solutions with a mix of Dedicated/Private Cloud and Multitenant/Public Cloud. Microsoft Skype for Business is strategically entered this market years ago and the technology giant is positioned to exceed industry averages due to their existing presence on the desktop, bundling capabilities, distribution channel and marketing spend.  

Additional research conducted by Wainhouse projects an 8% CAGR for revenue and a 9% CAGR for seats.  The 5-year projection for seats is 660 million.  The delta between the growth rate in number of seats and overall revenue is due to an individual user having multiple UC solutions.   The scenario where the individual has multiple seat licenses results in a higher percentage growth rate for seats. There is not a 1:1 ratio between additional seat licenses for an individual and revenue.

Microsoft UCaaSMicrosoft UCaaS

Sources:  PBX and UC – Wainhouse Research, McGee-Smith Analytics, LLC

The market velocity by revenue research clearly represents a strong shift from on premise to cloud PBX and UC services. The CAGR percentage for Cloud UC is a very healthy 29% compared to on premise UC at 6%. An even stronger indicator of industry direction is the growth rate for traditional PBX solutions. On premise PBX has a forecasted growth rate of -9%. Cloud PBX will grow at a 25% rate. The numbers are similar to cloud and on premise based contact center solution with a rapid shift to cloud.

Microsoft UCaaS
Sources:  PBX and UC – Wainhouse Research, McGee-Smith Analytics, LLC

As mentioned, Microsoft is well positioned in the unified communications market for strong growth with Office 365 voice enablement. Microsoft dominates the active UC users market share with 51%. Cisco is a distant second with 17%. This research does not reflect the PBX solution or the voice handset on the users desktop. A UC user will often utilize one client for UC and a separate solution for traditional PBX. Google is noteworthy 3% market share. They are noteworthy due to their ability to gain 3% market share in a relatively short period of time. There is a word of caution for Microsoft. The entire pie is only 100%. With 51% today, Microsoft will need to innovate, integrate, land & expand, in order to increase the market share. Microsoft is by no means satisfied with 51% market share and has a mission to place their UC client on every desktop, tablet, and mobile device in the world.

Microsoft UCaaSSources:  PBX and UC – Wainhouse Research, McGee-Smith Analytics, LLC

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On-Demand Microsoft Voice Solutions Panel