The UC Market: The Place Where Bad News Is Good News

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According to the “Enterprise Unified Communications and Voice Equipment” report by IHS Infonetics, global enterprise PBX revenue fell 6 percent in the first quarter of 2015 (year-over-year), as more and more businesses are said to have discovered the cloud.

The analytics firm says that pure IP PBX was the only segment to post year-over-year growth thanks to high demand in the Asia Pacific area. But this did little to help with the situation on the UC front in general. Sales of Unified Communications applications dropped 5 percent in Q1 2015. Sales of new equipment also fell considerably, as enterprises remain skeptical about spending on new phone systems.

Cloud is to blame

Diane Myers, research director at IHS, says the numbers point to a single suspect: the cloud. According to Mayers, businesses looking for “ease of management and flexibility” are no longer investing in new phone system purchases as hosted solutions seem far more attractive from every standpoint.

At first glance, the press release appears to dish out bad news for an industry that’s fighting for greater accessibility and better user experience. In reality, things aren’t quite that gloomy for the UC market. The industry is seeing some fluctuations year-over-year and even quarter-over-quarter, but at the same time more and more business owners are setting their sights on UCaaS (Unified Communications as a Service) solutions. UCaaS spells less hassle and more profits for everyone. Cloud solutions also make it possible to have collaboration apps and UC side by side.

Speaking of collaboration…

If you ask 451 Research, the Collaboration segment alone is actually growing at a very rapid pace. An example of collaboration software is our beloved Hubgets. It’s true that service providers have much learning to do about leveraging this gemstone of technology. It’s also true that the aforementioned piece of news might worry UC providers. But it’s actually a great opportunity to consider UCaaS. Even at this relatively slow pace of adoption, social business applications are estimated to grow 22% (CAGR) to make a $37 billion market by 2019. It’s also a big opportunity for service providers to add collaboration software to their portfolio.

The morale of the story? Emerging tech will always cause disruption. While it may seem that the market is shrinking, sometimes it’s just building momentum. Consider it the calm before the storm, if you will.

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