The Global UCaaS Market Will Experience Growth of 23.6% from 2021 to 2028

The global Unified Communications as a Service (UCaaS) market size reached a value of 38.74 billion dollars in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 23.6% between 2021 and 2028.

The COVID-19 outbreak is forcing companies to adopt a hybrid business model. As a result, organizations are consolidating multiple communication functions and enabling cross-operation to ensure efficient collaboration. The increasing number of employees working from home is also driving companies to implement UCaaS Unified Communications as a Service (UCaaS solutions). Businesses are also adopting UCaaS platforms and tools as the pandemic outbreak prompts them to reassess their operating costs and protect their profit margins amid declining revenues.

What Is the Role of AI in the Digital Transformation of Companies?

The latest technologies, such as Artificial Intelligence (AI), are playing a vital role in helping organizations achieve their digital transformation goals. AI-enabled solutions can help businesses effortlessly transcribe, intelligently track agents, intuitively record calls, understand user needs, and deliver relevant services.

AI-enabled UCaaS solutions can also help in sentiment analysis. As such, these AI-enabled solutions can typically analyze conversations, reviews and comments; direct mentions related to brands, products and services, and help companies strategize.

Why Has the Use of Videoconferencing Increased?

The adoption of videoconferencing practices gained very significant momentum in 2020. The trend was particularly highlighted by the rapid adoption of video conferencing and communication services by companies to communicate with their employees, such as that offered by masvoz: Enreach Meetings. Videoconferencing enables users to foster healthy interpersonal relationships and facilitates more efficient decision-making during meetings and conferences.

How Is Cloud Technology Growing?

The public cloud segment accounted for more than 73% of revenue in 2020. Public cloud technology helps reduce lead times when deploying new products. Public cloud-based deployment models offer the opportunity to implement scalable, pay-as-you-go-based UC platforms. As a result, organizations of all sizes and industries can comfortably switch from legacy communication platforms and practices to more advance and efficient UCaaS solutions in the public cloud. The growing preference among companies for a flexible environment that can potentially help implement change more efficiently is also driving organizations to opt for public cloud-based platforms.

On the other hand, the private cloud deployment model is expected to offer significant growth opportunities for the market until 2028. Private clouds offer a greater degree of customization and allow companies to subscribe to services according to their needs and specifications. The implementation of UCaaS solutions based on the private cloud also benefits organizations in the form of 24/7 support services, contracted capacities and service level agreements, and ensures more secure and personalized experiences.

What Are the Prospects for the Market Segments?

The IT and telecommunications segment dominated the market with revenue of 19.9% ​​in 2020. The strong drive from various IT and telecommunications companies to implement more efficient collaboration among their globally distributed teams is driving the need to implement UCaaS solutions. Providers in the information technology and telecommunications industry often have to work with high-profile clients, such as government departments and public administrations, requiring a secure and efficient exchange of information. The growing need for data security and privacy protection is driving the adoption of UCaaS solutions by telecommunications and IT companies.

The healthcare industry also increased revenue in 2020 as patients had a need to communicate efficiently with their physicians to receive healthcare. As a result, physicians and healthcare providers also remain interested in accessing critical patient data from various sources in real time to optimize the healthcare experience and improve operational efficiency. As such, healthcare organizations are implementing UCaaS solutions in the private cloud to ensure adequate data security and privacy protection.

Which Regions Will Grow the Most in the Coming Years?

North America dominated the global market in 2020 with revenue of over 31%. As the US has been one of the countries hardest hit by the COVID-19 pandemic outbreak, government agencies, healthcare providers, and online distribution channels expect efficient communication and collaboration to ensure proper care and diagnosis. This is driving the adoption of UCaaS solutions in the United States.

Furthermore, Asia Pacific is expected to see substantial growth through 2028 due to continued digitization and the growing mobile workforce in the region. The deployment of high-speed Internet at affordable rates and the rapid proliferation of smartphones in the region are allowing people to work remotely and subsequently encouraging companies to opt for UCaaS solutions.

How Has Market Share Developed?

UCaaS market providers are diversifying their service offerings and ensuring a better user experience as part of efforts to strengthen their market share. Integrating AI capabilities with UCaaS technology has been one of the big trends for this.

Service providers are placing a strong emphasis on innovation and new product launches to open up new revenue generating channels. They have also started offering a Communication as a Service (CPaaS) platform to their customers, thus helping companies connect people with services, processes and applications. For example, CPaaS helps clients seeking more efficient communication and collaboration between employees, remote workers, and customers.