Credit: Dreamstime
Customer investment in relation to unified communications collaboration tools increased seven per cent year-on-year during the second quarter of 2020, reaching more than $12 billion as businesses shift focus to the cloud.
According to Synergy Research findings, spending on hosted and cloud-based solutions surged 18 per cent during the three-month period, in stark contrast to on-premises product investment which declined 18 per cent.
As a result, hosted and cloud solutions now account for over three quarters of the market, with growth “particularly strong” in software-as-a-service (SaaS) and communications platform-as-a-service (CPaaS) offerings. Such a change in market dynamics sees Zoom, Twilio, Vonage and Slack now feature “strongly” in the top ten ranking of collaboration vendors.
“We were already seeing a steady migration in the collaboration market away from on-premises products and towards cloud solutions,” said Jeremy Duke, founder and chief analyst of Synergy Research. “Covid-19 and the sudden radical change in working practices has resulted in an acceleration of that transition.
“CIOs need to find ways of maintaining communications and productivity in a world where remote working is the new norm and offices are sparsely populated. This is a world for which hosted and cloud solutions are perfectly suited.”
Credit: Synergy Research Group Specific to on-premises, the largest segments include IP telephony, video conferencing, on-premises email and content management.
“While total on-premises spending is in decline, there was at least some growth seen in video conferencing equipment,” Duke added. “The highest growth segments in hosted and cloud solutions were teams, conferencing and CPaaS, but the largest segments remain hosted PBX and UCaaS, hosted contact centre and hosted or cloud email.”
Video conferencing equipment market rebounds
As outlined by Duke, the video conferencing equipment market returned to growth during the three-month period following a run of “four soft quarters”, with worldwide revenues increasing 11 per cent compared to the same period in 2019.
According to Synergy Research findings, Cisco’s leadership in traditional video conferencing systems enabled the vendor to claim a 47 per cent share of the total video conferencing equipment market. Logitech continues to dominate the USB segment with market share expanding to 17 per cent, with the industry leaders followed by Poly, Huawei and Aver.
Furthermore, Duke said sales of video conferencing equipment came in at almost $500 million during the second quarter, driven by 34 per cent year-on-year growth in the USB segment and three per cent growth in the traditional systems segment.
“USB technology is more cost efficient and easier to use than traditional video codec systems and is also well aligned with flexible, cloud-based operations,” Duke said. “The conferencing SaaS market grew by 64 per cent in Q2, driven primarily by VaaS [voice-as-a-service] which more than doubled in size.
“This booming VaaS market is helping to pull through strong demand growth for video conferencing equipment. USB is the main beneficiary but sales of traditional video conferencing end points are also once again on the rise.”
Credit: Synergy Research Group 
