Unified communications as a market has never stood still, and the strongest trend lately has been the accelerating shift to hosted offerings. Everything seems to be heading to the cloud these days, and UC is hardly immune. For businesses, the appeal is strong, not just for making UC an opex play, but also to mitigate the deployment complexities and stresses this puts on IT. Vendors have their own reasons, and since anyone can offer cloud services, the range of UC providers has really opened up.
All of this points to a need for clarity, and I’m going to share two core conclusions from a recent Gartner (News - Alert) report. This would be its annual global UCaaS Magic Quadrant analysis, where they evaluate the top hosted UC providers. While UC itself can mean many things, so is the terminology around hosted and cloud services. UC as a Service – UCaaS – is, for the most part, another way of saying hosted UC, and that’s what I’ll use going forward. Rather than break down how each of the 20 providers fared in its Magic Quadrant analysis, my focus will be on two realities of this market that business decision-makers need to understand.
Cloud Adoption Still Faces Obstacles
On a broad scale, many businesses still have reservations about the cloud, especially for mission-critical services like UC. Not only is this viewed as a strategic capability that needs to remain in-house, but most of the applications are real time or near real time, and trusting this level of availability to an external partner requires a leap of faith.
To be fair, of course, businesses are increasingly using the cloud for many applications, but UC has a high degree of inherent complexity. The Gartner report rightly notes that a UC solution must integrate across six different functions, namely: voice – fixed line and mobile, conferencing, messaging, presence and IM, clients – both desktop and browser, and communications-enabled applications. The last function refers to existing functions such as contact centers, where communications applications are integrated to enable new capabilities.
These functions collectively represent the core of a UC solution, and without elaborating further, it should be clear that a seamless experience presents many technical challenges. Any channel partner can validate this reality for premises-based UC, and cloud adds another level of complexity. This is especially true since many deployments are multi-vendor, not just at the network level, but across the various endpoints where UC sessions are actually experienced.
Again, this requires a leap of faith that a single cloud partner can pull all these pieces together – and ensure business-grade uptime – and do so in a secure manner. If UCaaS vendor claims are taken at face value, one might conclude this is a mature market where all these issues have long been addressed. UCaaS is very much a work in progress, and while adoption trends are strong, many businesses do not feel the cloud is ready yet for a full-on UC deployment.
Many Types of Providers From Which To Choose
Technology aside, this is the most important reality check from Gartner’s report. Twenty UCaaS providers made the grade for its Magic Quadrant, and only three would be recognizable from the usual suspects most associated with premises-based UC – Microsoft, Mitel, and ShoreTel. Most of the rest came from three other categories – tier 1 telcos (AT&T, BT, NTT, Orange, and Verizon); system integrators such as Avanade, CSC (News - Alert) and HP; and OTT players such as 8x8, RingCentral, ThinkingPhones, and Vonage Business.
While this is not a definitive set of providers, the overall cohort reflects the major players driving the market. Conspicuously absent are the two strongest U.S. IP PBX (News - Alert) players – Avaya and Cisco – but that’s only partially true. Cisco is, in fact, the dominant hosted UC platform used by all the major telcos cited herein, and across the analysis, both Cisco and Microsoft (namely Skype for Business) are practically ubiquitous, especially among large enterprise customers. No surprise there, but equally surprising is how little presence Avaya (News - Alert) seems to have in the UCaaS market. Among the 20 providers in this report, only one – HP – is partnering with them.
Also noteworthy is the absence of cable operators. While MSOs have carved out a nice niche with VoIP for both businesses and homes, they have not done so yet with UCaaS. As such, businesses currently using a cableco for VoIP may well end up looking elsewhere when considering UCaaS.
Finally, Google is a notable addition to the UCaaS group, not just because of its universal market presence, but also because it fared very well in Gartner’s overall evaluation. Only Microsoft had a stronger Magic Quadrant rating, and at that, only by a little. While Google’s UCaaS revenues may be nominal, it’s clear that the company can deliver a viable solution that fits the bill for many businesses.
Overall, then, any business looking at UCaaS must be prepared to consider a broad and different set of candidates. For most, this means going outside its comfort zone, but also opening up to new possibilities that could be even better fits than what businesses have now for VoIP.
Jon Arnold (News - Alert) is the principal at J Arnold & Associates (www.jarnoldassociates.com).
Jon Arnold is principal of J Arnold & Associates, an independent telecom analyst and marketing consultancy with a focus on IP communications, and writes the Analyst 2.0 blog. Previously, he was the VoIP program leader at Frost & Sullivan.
Edited by Kyle Piscioniere