North American UCaaS Market: Frost Radar Report

A Benchmarking System to Spark Companies to Action - Innovation that Fuels New Deal Flow and Growth Pipelines

The global COVID-19 pandemic has accelerated decades-long trends including the move to remote and hybrid work, the rise of virtual organizations and the adoption of digital business models whereby all or most customer interactions take place over digital channels. The recent crisis has also elevated businesses’ awareness of the need for more robust business continuity programs and flexible technology solutions to reliably and securely support unanticipated capacity adjustments - whether related to workforce size fluctuations or customer demand variability.

These transformational shifts have considerably boosted demand for digital technologies, including cloud communications, collaboration and customer experience (CX) management (contact center) solutions. Technology developers and providers are responding to evolving market conditions and customer requirements with more diverse cloud service offers; enhanced mobility and software user experiences; flexible deployment options (e.g., bring your own carrier (BYOC)); consultative approach to identify best-fit solutions; managed and professional services to ensure deployment success; e-commerce and digital buyer experiences.

This rising tide is lifting all boats in the cloud private branch exchange (PBX) and unified communications-as-a-service (UCaaS) market; yet, certain providers are better positioned to capitalize on the growing demand for flexible access to advanced communications services.

Cloud-native platforms that enable the delivery of various communications and collaboration modalities - calling, video/meetings, messaging, and contact center - as services through a single, integrated user experience, will represent a major prerequisite for provider success in the future. Mobility capabilities - including desktop and mobile soft clients, WebRTC/browser-based calling and meeting services, and mobile UCaaS solutions with native mobile dialers will determine provider ability to address evolving user needs in the hybrid-work era.

Also important, forward-looking businesses are evaluating UCaaS in the context of broader digital transformation projects and are looking to align communications upgrades with broader business goals, Providers with flexible application programming APIs and communications platforms as a service (CPaaS) will be better equipped to help businesses integrate their communications solutions with important workflows and thus boost the return on their communications investments.

To execute effectively, providers need to modernize their architectures; improve operational efficiencies and optimize internal processes; nurture effective partner channels; develop customer migration and UCaaS adoption services; enable hybrid architectures within customer organizations; provide flexible APIs and consider the use of artificial intelligence (AI), augmented reality (AR), virtual reality (VR) and other advanced technologies to create superior user experiences.

The North American hosted IP telephony and UCaaS market remains highly fragmented despite ongoing mergers and acquisitions. New product launches by a variety of technology developers, as well as the increasing popularity of wholesale services and private-label UCaaS offerings, are likely to perpetuate market fragmentation in the foreseeable future.

The analyst tracks more than 120 service providers hosting their own proprietary platforms or solutions delivered by third-party technology developers. Of those, 31 providers have been selected for their growth and innovation leadership, notable accomplishments in the past year and prospects for success based on their technology development roadmaps and effective go-to-market strategies. Companies plotted on the Frost Radar™ are instrumental in advancing the industry into the future. Best practices employed by the industry leaders can be leveraged by other market participants to develop more sustainable growth and innovation strategies.