Research Question: How penetrated are VoIP/UCaaS companies and can they continue to chip away at AT&T and Verizon?
Report Available: March 3, 2016
Blueshift’s initial research shows the VoIP/Unified Communications as a Service (UCaaS) market has more room to grow within SMBs. Smaller providers have struggled to penetrate enterprises due to issues such as a lack of brand awareness, however some like VG and EGHT have made recent strides into the space. Competitors are entering the UCaaS market with intentions to target enterprise clients, and, given their ability to execute, may prevent smaller players from fully entering this space.
- The S. VoIP/UCaaS market is valued at $5 billion and has been growing 15% annually. Some parts of the UCaaS market will see a 20% to 30% CAGR in the coming years. Cloud-based communication in business represents 5% of the business communications market. By 2020, UCaaS is expected to grow by 3x in enterprises, 5x in small businesses, and 7x in mid-market businesses. RNG leads the UCaaS market, is considered best of breed by many, and now serves over 300,000 customers. SHOR lagged its competition in performance and reputation.
- Smaller VoIP companies have been taking share from traditional telephony companies like T and VZ since they allow businesses to reduce their telephony expense by 20% to 30%. The FCC’s decision to allow VoIP providers to adopt direct numbering rights will give smaller players like VG the ability to better interconnect with larger carriers and deliver service to their clients.
- VG’s purchase of iCore Networks may help it expand into the enterprise market, however current or past business users of VG’s Essentials product may struggle to adopt its new business offerings due to their poor experiences with VG’s service. MITL and RNG were considered solid VoIP providers for larger business (despite brand recognition issues.) EGHT has scored several large enterprise wins as well, including NetSuite, which employs 4,500 and Regus, which employs 2,500.
- VoIP/UCaaS companies like RNG and MITL are still lacking brand awareness among enterprises. VZ and T are considered the gorillas of the industry, however MSFT is entering the space with its Skype for Business Online package aimed at enterprises. GOOG may threaten the SMB VoIP space with its new Google Fiber Phone. Another hurdle VoIP companies face on a global scale is international telcos attempting to ban VoIP services in their countries.
How much further can these companies go? What size company becomes too big for a VoIP solution? What makes one VoIP company better than the other? To gain insight into the VoIP/UCaaS market, Blueshift will gather data and issue a market research report from independent sources in the following areas: SMB customers, Enterprises, Independent salespeople, Distributors, and Industry specialists.
Companies: Vonage Holdings (VG), RingCentral (RNG), 8×8 Inc (EGHT), Mitel Networks (MITL), ShoreTel (SHOR), j2 Global (JCOM), West Corp (WSTC), Verizon (VZ), AT&T (T), Microsoft (MSFT), Google (GOOG)
Research Begins: Feb. 15, 2016