Forecasting the UC market is one of the hardest things I’ve done in my 20 years as an analyst. The UC market isn’t like the call center or PBX markets, where you can easily count the number of systems and seats (or licenses) shipped. There is no agreed-upon way to measure the UC market, especially since everyone defines it differently.
So to overcome this challenge, I did what any good analyst would do – I came up with four different models and ways of forecasting the UC market, as well as a high-growth scenario and medium-growth scenario. The good news is - each method shows strong revenue and seat shipment growth in the coming years. I’m not going to give away all of my methodologies here (you have to order and read the report for the gory details), but I’ll share one of my methods and findings here.
One way of measuring the market is to look at the market size of the various components that make up a UC solution and add them up together. This is okay for presenting an overall view of the sum of the UC components (IP PBX, UM, conferencing, IM/presence, etc.), but it doesn’t really tell you the size of the UC market, mainly because this doesn’t account for the fact that those components may be used on a standalone basis, and not necessarily as part of a UC solution. Let’s say someone purchases an IP PBX – will this IP PBX be used on a standalone basis, or will it be integrated with presence, a unified interface, and other UC components, resulting in a UC solution? Or does the sale of an enterprise IM/presence server constitute a UC sale? Not necessarily.
In order to present the real UC market, and not just the total sum of all the elements that are part of the market, a new methodology is required. Here’s one my methodologies: First, determine the market forecasts for each of the individual components that make up a unified communications solution, including IP PBXs, Unified Messaging, Conferencing/Collaboration, Enterprise IM/Presence, UC PBX Integration or Gateway, and other (including softphone, IM federation, integration software, etc.) Adding up the total revenues of all the UC components, calculate the worldwide Total Gross or “UC-capable” market. The result: in 2007 total worldwide end-user revenues were $9.52 billion, growing to $15.9 billion by 2012, for a compounded annual growth rate of 51.5%.
Based on this data, the Net or “True” UC market (or UC-capable market) is estimated using a formula to identify the revenues and seat shipment that are attributed to a UC solution, rather than being used as a standalone or non-integrated product. The Net or “True” UC market is forecast to grow from $200.8 million in 2007 to $2.433 billion by 2012. In addition, professional services will increase the product revenues by 18% in 2007, and will add on 40% of product revenues in 2012.
This study, Unified Communications Market 2007-2012, has been a massive undertaking, and covers not just premise-based market forecasts, but also discusses the drivers, challenges, technology, trends, UC adoption scenarios, etc., and provides vendor profiles on all of the leading UC players.Again, this is just one way to look at and measure the market – several other methodologies are included in the report.
The report also includes information on some of the challenges that must be overcome in order for the market to reach its potential. For example, there is currently a general lack of understanding of UC, what it is, and what it can and cannot do; migration and evolution from existing platforms and infrastructures may be very difficult; complex integration is needed to ensure interoperability between all of the various UC components and elements; and it may be difficult to prove a hard return on investment. UC can have a transformational impact, but, in order to do so, enterprises need to figure out how it can be used to optimize their business processes.
User adoption and the various routes to UC are laid out, as well as suggestions as to what’s needed to succeed when implementing UC. Lastly, there are about 50 pages of vendor profiles, highlighting the leading UC vendors’ product offerings and approaches to the market, as well as their strengths & challenges.
Download the UC Market Survey Executive Summary and Table of Contents here and if you’re interested in purchasing the report, or if you have any questions, feel free to contact me at bpleasant@commfusion.com.