Five Unified Communications and Collaboration Industry Shifts We’re Looking Out for in 2018.
The Unified Communications and Collaboration (UCC) space (or the “Intelligent Communications’ market, if you prefer to go with the new Microsoft definition) continues to show change and frenetic pace in 2018. In the second half of 2017, team-chat software offerings like Slack and Microsoft Teams, as well as emerging ‘traditional’ UCaaS offerings from Amazon Chime and RingCentral took center stage in media conversations. In parallel Mitel’s acquisition of ShoreTel and Cisco’s acquisition of Broadsoft signaled a time of consolidation and continued UCC vendor growth.
The latter half of 2017 continued to show aggressive Unified Communications and Collaboration mid to large enterprise growth as more and more organizations continued the migration to UC platforms. Moving into 2018 we’re already seeing another M&A bang, per Katherine Finnell’s recent article in TechTarget’s SearchUnifiedCommunications. We believe 2018 will deliver some of the UCC’s biggest industry shifts. More consolidation, collaboration and competition are upon us. Here are five storylines we’ll be monitoring closely as we close out Q1, head into the big annual Enterprise Connect show and make our way through the rest of the year.
1. Slack momentum will plateau
Even though the Slack name origins (Searchable Log of All Conversation and Knowledge) would lead one to believe that their end game should be equally voice as well as collaboration centric, the Slack platform currently lacks voice functionality and industry experience. Additionally, although they sell into the enterprise, they don’t enjoy the enterprise reputation for stability, security and reliability as other existing or emerging players in the team-chat space. All of this combines to open the door for one or more other UCaaS providers to land their beachheads in the enterprise. While Slack either builds, buys or partners for voice, a massive gap will continue to grow for new and incumbent players (e.g. perhaps RingCentral adding more collaborative features or Atlassian HipChat adding more voice features) to provide an all-in-one-solution.
2. Skype for Business to Teams will shift into simultaneous migration AND coexistence mode
Teams has already truly landed in the enterprise. The new, but robust app boasts large usage numbers and is obviously set up with huge potential to be adopted by the 100M+ Office subscribers worldwide. Also, unlike Slack, Microsoft doesn’t require voice partners as all of the Skype for Business conferencing and voice functionality is scheduled to transfer over from the Skype side. It’s clear that Teams will ‘eventually’ become THE all-in-one Unified Communications and Collaboration solution. The only challenge that Microsoft will need to work through is “time” as all of their on-prem Skype for Business large enterprises will require a multi-year migration period to work their way into the cloud for both the Skype for Business AND the SharePoint platforms. Contrasted with the Yammer acquisition where both the technology and the demographics of the Office installed base were not quite ready to achieve a meaningful orbit, Teams seems poised to respond to the millennial generation who will make up approximately 75% of the workforce by 2025. The gradual outside-in exodus from both the asynchronous world of Outlook as well as the real-time world of Skype for Business, will allow enterprises to position themselves for the semi-synchronous world of Teams when their end-users and their IT/technology depreciation models signal their readiness.
3. Cisco will see a temporary boom
Due to its emerging Spark offering, its Broadsoft acquisition and heavy UC recruitment in 2017, Cisco will flare up to assert more dramatic market leadership. Cisco’s ability to temporarily gain the upper hand will be assisted by the uncertainty and confusion introduced into the market by Microsoft with their announcement that Skype for Business will migrate to Teams. However, this uncertainty will be short-lived. While Cisco will benefit from a short bitcoin-eque bump (accompanied by the predictable media and revenue growth hoopla) it won’t necessarily create any additional long-term UCC market leadership for Cisco. We view this as a flash in the pan as other players quickly catch up and move beyond Spark’s capabilities.
4. AI will balance team-chat unpredictability
Now well into its second decade of operations, most of the idiosyncrasies of UC systems have been ironed out. Either the software vendors have evolved their platforms, or the hardware vendors have enhanced their headsets or SBCs and/or IT departments have polished their architecting and installation skill sets. Yet, as we add the full second “C” of collaboration into the mix and evolve to full UCC, the enhanced empowerment capabilities of the platform means that end-users have more ways to get themselves into trouble. Everyone is talking about AI (artificial intelligence) and ML (machine learning) these days, but the real ‘magic’ for AI in the UCC space will be the way that it will leverage massive amounts of data to predict when collaborative interactions will ‘go bad’ before the event even occurs. The creation of self-correcting systems will enhance UCC success by helping to partially remove IT from the middleman/troubleshooter role.
5. The UCC “App Store” reaches the Enterprise
Because of the Slack (over 600 reported apps) and the Teams (over 150 reported apps) architectures, the natural incumbents here will be these two team-chat opponents. The increasing power of the cloud, combined with the growing end-user expectation for apps (driven from the consumer market), and the prevalence of bot architecture is driving this change. Obviously IT will not allow an unfettered UC app competition to be waged without some level of control. As such we’ll see more of a curated app-store experience vs the wild west of the consumer space. Still, embracing the inevitability and the utility of apps within UCC platforms will lead to more aggressive end-user adoption, satisfaction and productivity.
With the UCC industry now projecting to a nearly $60 billion industry valuation by 2024, we’re looking forward to seeing all the above, and more, unfold.
Also, if you’re attending Enterprise Connect this year, be sure to reach out to the Unify Square team (and especially our CPMO, Scott Gode), to make sure we have the opportunity to hear more about your experiences within the industry, as well as your predictions for where it’s headed.