Jamie Hughes takes an in-depth look at an evolving UCaaS market and emphasises the importance of developing new strategies as cloud providers compete head-to-head to maintain and win new customers.
Differentiation is becoming one of the key ingredients for success in an increasingly competitive and maturing UCaaS arena – where standing still for too long means you’ll get left behind!
Second-generation users are making up more and more of the market, switching from a competitor’s solution rather than coming from on-premise PBX migrations, which was often the case in the past.
So which specialist has the best UCaaS solutions is proving crucial, as the race to win new customers increases in a ‘cloud v cloud provider’ battle.
Millions More Users Are On The Way
Research from market analysts Cavell has pinpointed how millions more users will soon be here – and why developing market maturity means differentiating from other cloud solutions is becoming more important.
It estimates five million more customers are set to join the cloud collaboration bandwagon over the coming years in a world of super-charged UCaaS solutions, driven by AI.
By 2028 cloud communication adoption is estimated to rise to 15.9m from 10.9m users this year, reaching 88.3% penetration in a market worth £1.86bn.
Times Are Changing
The move towards cloud services is now well and truly underway as second-generation users make up more and more of the market. According to Cavell’s latest service provider survey, there is an even split of UCaaS customers coming from on-premise PBX migrations and from pre-existing cloud communications customers coming from a competitor’s solution.
The proportion of customers from a competitor’s UC solutions has been increasing steadily in the last few quarters. Back in Q4 2021, 24% of providers reported winning the majority of their customers from cloud competitors and this increased to 32% in
Q2 2023. In the latest quarter, 49% of providers selected this option and is the first time it has matched the number coming from on-premise solutions.
This means many customers are now choosing their second generation UCaaS solution based on more of a reliability and capability comparison – with more common cloud-to-cloud migration likely to increase churn rates for providers with only basic functionalities.
Cavell notes these trends are being especially prevalent in more advanced cloud communications markets such as the US and the UK, where providers most capable of continual development - are seeing the most success.
In less mature cloud territories, such as France and Germany, it says most new users are still on-premise PBX migrations and this will continue until the markets continue to mature and churn rates will then increase accordingly.
Avoid A Race To The Bottom
There are currently 107 UK cloud providers, where Evolve IP is part of a dominant top 10 holding over 60% market share. As a white-label cloud communications specialist we know there’s no one-size-fits-all in an ever changing landscape. But it’s clear cloud providers increasingly need to adapt to maintain a competitive advantage.
Evolve IP's work anywhere philosophy differentiates its partner channel by breaking down barriers in a challenging communications market by providing industry leading solutions from best-of-breed global technology vendors, where AI will play a more prominent role.
Cloud technology is developing quickly but in a progressively saturated market resellers need to stand out from the crowd to continue to win new business and nullify the threat of a commoditised channel – avoiding a race to the bottom based purely on price. Find out more about Evolve IP’s UCaaS solutions here
