Current State of the UC Market – Part 1

I love being an industry analyst, except for when it comes to one thing – market sizing and forecasting. Forecasting any market can be tedious and frustrating, but doing market sizing for a market that is not unanimously defined is even harder. So having just completed my analysis of the UC market for 2010 and 2011, with forecasts through 2016, it’s with great relief that I can put my latest unified communications market analysis behind me – at least for a year.

Many of you know that 2010 was not a great year for most technology segments, and the UC market was no exception. The timing of the economic recession was most unfortunate, as market momentum was starting to build in 2008 and early 2009, but then most companies put the breaks on spending, and UC trials were placed on the back burner. I frequently heard from IT managers that while they liked the concept of UC, they had more pressing IT priorities on which to spend their limited budgets. While we’re not out of the woods as far as the economy, IT spending is definitely on the rise, and we’re seeing more companies revisiting their UC plans. 

The areas where we’re seeing the most interest are mobility, conferencing/collaboration, and video.

As “collaboration” becomes all the rage, we’re seeing companies of all sizes deploying tools to enable geographically-distributed workers to more effectively work together. These tools include web conferencing, as well as collaboration tools such as document sharing and shared workspaces. In addition, we’re seeing a large portion of companies moving from using conferencing services that they pay for on a monthly basis, to bringing conferencing capabilities in house as part of an overall UC solution.

Another growth area is video, especially for desktop and mobile video, as prices come down, bandwidth becomes more abundant, video cameras are increasingly available on laptops and mobile devices, and workers become more accustomed to seeing each other, rather than just talking to each other.

Mobile capabilities, such as mobile extension and single number reach are also growing significantly. As the number of people working remotely and away from the office continues to rapidly increase, the need to be in touch and have access to their enterprise communication capabilities increases. All UC vendors are adding mobile clients that help mobile workers stay in touch with customers, partners, suppliers, and colleagues regardless of where they are or what device they’re using.

Capabilities like mobile extension and single number reach make it easier for workers to access their enterprise communication capabilities while they’re on the road, while single number reach lets customers and others reach them on any device in any location.

While all of these capabilities are being increasing deployed and implemented, they are often bundled in as part of packages with either the UC Server, the UC client, or the IP PBX. In order to make UC pricing simpler for channel partners and customers, many vendors now offer bundles of the UC components. The good news for customers is that they can more cost effectively purchase the capabilities they want today and in the future. The good news for channel partners is that it’s generally easier to sell bundles than individual components, as they generally have simplified user-based licensing. In addition, customers are more likely to utilize the various UC elements, which should lead to more user licenses sold, as well as increased professional service revenues from customization and integration.

The bad news is that it’s harder for industry analysts like myself to measure the market and sales of the various UC components.

In Part 2 of this article, I’ll describe my methodology for measuring the UC market, as well as the current and projected market size.

Also on UCStrategies.com on this topic:

• Current State of the UC Market – Part 2, by Blair Pleasant