The progression of modern enterprise communications traces back several decades from the days of switchboard operators and clunky hardware installations to instantaneous, cloud-based collaboration platforms that are available anywhere, on any device. Early innovations in the space include private branch exchange (PBX), interactive voice response (IVR), and voicemail in the late twentieth century; the dawn of the millennium brought about increased adoptions of VoIP (Voice over Internet Protocol, or IP telephony) and the introduction of SIP (Session Initiation Protocol), enabling communications over the Internet. Mass adoption of cell phones, and eventually smartphones, along with increased utilization of video and chat-based communications and cloud computing, gave rise to increasingly integrated platforms that could be accessed on the go, a trend only heightened in recent years with the COVID-19 pandemic, further driving the demand to support distributed work. Today, Unified Communications as a Service (UCaaS) platforms seamlessly integrate a range of business functions into a single, cloud-hosted platform.

Modern UCaaS provides businesses with comprehensive cloud-based communication solutions that enhance productivity, reduce costs, and support flexible work styles. These platforms allow for synchronous and asynchronous communication across devices, integrating features of basic enterprise telephony alongside robust communication and collaboration features such as video conferencing, instant messaging, scheduling and calendar features, transcription, and much more on a single platform. Most vendors utilize a subscription-based, per-user licensing model, and the various platforms encompass comparable core offerings, with functions like business telephony, collaboration, video conferencing, and meeting features. Beyond the core set of communications functionalities, these platforms also provide managed solutions for security and infrastructure, offloading some of the burden from internal IT teams.

As UCaaS platform features continue to expand, product lines blur between formerly distinct areas of IP telephony, contact center, video conferencing, and other collaboration and productivity functions. The future of UCaaS will be fueled by the need to support a distributed workforce and by the further consolidation of communication services. Many of these vendors have also begun to dip their toes into AI, increasingly infusing it into their marketing copy and, ostensibly, their products. With the flood gates open, AI has the potential to be a differentiator in the space for vendors if they can integrate the technology in a way that saves time and money.

This report examines current end-user and recent evaluator data for UCaaS tools and reports on each vendor's data set against the backdrop of a crowded marketplace where providers compete to offer the most complete and effective solutions for today’s constant and critical communication needs.

The Observatory Scope

The plotting of vendors across the Observatory Scope is supported wholly by ETR’s exclusive market intelligence and spending intentions data sets (see Figure 1 above). The Leading vector in this period is populated by Microsoft (Teams) and Google (Workspace). Teams leads the duo (and all peers) with the highest overall Presence and Momentum in the survey set. The Tracking sector carries two vendors with strong Presence in the UCaaS space, Cisco and Zoom. The vendors’ Presence metrics are in line with Microsoft and Google, but Cisco and Zoom lag the two in spending trajectory Momentum.

Meanwhile, the Advancing and Pursuing vectors hold three names each. Within the Advancing vector, Amazon (Chime), Dialpad, and RingCentral register solid Momentum but relatively lower Presence. Finally, 8x8, GoTo, and Vonage occupy the Pursuing vector, with Presence and Momentum that is relatively lower than sector peers. This report will break down the four vectors and the vendors in more detail in the following sections.

Spending Intentions

Figure 2. ETR’s Market Array spending Net Scores for UCaaS vendors were derived from a survey of 315 UCaaS users and evaluators.

 

Figure 2 above shows Market Array Net Score for select vendors within the UCaaS marketplace, tracking forward-looking spending trajectory for each vendor’s UCaaS-specific offerings. This differs from ETR’s TSIS, which tracks overall spending projections at the company- and sector-wide levels. The data visualized in this figure will be referenced throughout this Observatory report.

 

Microsoft Teams leads peers with an elevated Net Score of 69%, driven by the highest level of increasing spend intent (68%) and the lowest indications of negative spend (2.5%) across the data set. Dialpad’s Net Score comes in second, though it is important to note that citations for the vendor are materially lower. Nonetheless, Dialpad’s Net Score of 57.1% is impressive, with more than 65% of respondents indicating a net positive or flat spending intention for the vendor. Google Workspace and Amazon Chime round out the top four in spending intentions, with Workspace coming in at 26% and Chime at 21.1%. Amazon Chime’s sample lacks new adoptions but registers healthy levels of customer expansion or increasing spend indications at (32%). Amazon also displays steadiness with 58% of respondents indicating flat spend on the vendor for the year. Further, no users indicated plans to churn the vendor at this time. Overall, these top four vendors share notably low levels of churn and moderately low decreasing spend metrics. This is especially true for Teams.

 

Following Amazon Chime in spending intentions are RingCentral, 8x8, Cisco, and Zoom. These vendors hold similar levels of negative spend intent to one another, though Zoom and Cisco registered slightly more flat vs positive spending driving their Net Scores down compared to 8x8 and RingCentral. Negative spend indications here are moderately high and in a tight range of 27% to 29% among these four vendors. These vendors exhibit more replacements than adoptions. On a positive note, increasing spend for each vendor ranges from moderate to outright strong, ranging from 24% to 36%. GoTo and Vonage round out the bottom of the Net Score metric, driven by higher levels of decreasing and churn indications. Similar to Dialpad, it is important to note that spend metrics for GoTo and Vonage users are based off of a low citation base.

 

Across the board, adoption levels are low for all vendors, while flat and increasing spend indications are elevated, which suggests a certain amount of buy-in when choosing to spend on a given platform. Dialpad is an exception with 22% of users indicating they are new adopters, but, again, at lower citations. Workspace and RingCentral show the next-highest levels of adoption at 5% and 4%, respectively.

 

I. Established Vendors with Heavy Presence in the Enterprise – Microsoft, Google, Cisco & Zoom

In the Market Array survey for UCaaS tools, respondents indicated ease-of-use and ease of administration (40%); integration capabilities and compatibility with existing tech stacks (39%); reliability of service and audio/video quality (22%); and collaboration and productivity features (18%) among the most important features of a UCaaS product. Many respondents also valued breadth of features and innovative roadmap (12%); security and compliance (12%); cost, value, or ROI (11%); and universal accessibility across devices (11%).

 

With that context in mind, Microsoft Teams and Google populate the Leading vector in the Observatory Scope (Figure 1), with Microsoft leading all peers in Momentum and Presence. Google (Workspace) has the second-highest Momentum and the fourth-highest Presence. At the core of their unified communication services, both Microsoft and Google offer extensive collaboration platforms with shared workspaces, voice and audio calling, meeting and calendar functions, email, file collaboration, and planning functions, among other features. These services are accessible cross-device and irrespective of geographical location. Beyond UCaaS, Microsoft and Google also offer the weight of their highly developed enterprise technology apparatuses, fully developed productivity suites, and easy integration with the rest of their ecosystems.

 

Expected Churn

Figure 3. This chart visualizes the Market Array data for ETR’s Expected Churn metric, which measures how long customers expect to use a product.

 

As many organizations already allocate spend towards Microsoft and Google in their budgets, these vendors can be a natural choice to consider consolidating onto for UCaaS. In an ETR Insights interview, the Director of Desktop Systems from a large university at a self-proclaimed “Google campus” described the completeness of Workspace’s UCaaS offering, and its ability to handle functions that historically required multiple tools or vendors: “Google handles all of our email. We are a Google Meet campus when it comes to video meetings. We’re also a Google Voice campus. It has replaced our whole telecom system.”

 

The Senior Manager of Global IT at a midsize architectural firm shared a similar origin story for his shift with Microsoft: “We already had Microsoft 365 implemented, and with Teams as a major communication tool, what we did is we shifted in 2021. We ran the project of converting all our offices to Microsoft Teams telephony. Calling plans in Microsoft make it easier. Staff can have their office phone anywhere they went. Whether it's on their mobile device or their laptop, their office phone would follow them, and their voicemails would follow them anywhere they were across the organization.” For existing customers of Microsoft, one ITDM remarks, Teams is “super-efficient and easily integrated with the Microsoft suite.”

 

In ETR’s proprietary Expected Churn analysis (seen in Figure 3 above), Teams has the most expected longevity with 41% of customers expecting to use the product for at least five more years. In the aggregate, 92% of Teams customers expect to use the vendor for at least two more years, with only 7% stating they plan to use the vendor for only one more year. All other vendors are anticipated to be used for “at least one more year” at rates of 20% or more, suggesting less permanency than seen among Teams’ customers. Google Workspace holds the second highest longevity in expected usage, with 29% of respondents expecting to use the product for five years or more, and an aggregate 74% expecting to use the product for at least two years.

 

Microsoft also leads our Usage Change metric (see Figure 4 below), with a Usage Net Score of 73.5% vs. next-highest Google Workspace at 21.3%. Particularly, Teams users indicate low levels of decreasing use (2.2%) and robust plans to increase usage (75.6%). Workspace’s usage metrics are more moderate with 44% of users anticipating their usage will be about the same year-over-year and 17% indicating declines in usage for 2024. Still, Google’s Usage Net Score is relatively strong compared to other peers.

Usage Change

Figure 4. Regardless of spending intentions, ETR’s Usage Change analysis measures organizational changes in utilization levels of products.

 

Microsoft Teams, by a wide margin, is considered the most desired vendor, which 53% of respondents said they would prioritize if they were to rebuild their UCaaS stack. Zoom follows in this analysis with 11%, followed by Google (10%) and Cisco (9%). Teams also topped 8 of 10 Product Strength analyses in ETR’s Market Array data. Respondents indicated Teams’ greatest strengths are easy integration with existing ecosystems (86%) and the availability of relevant technical expertise for the product (84%). Additionally, 82% of indicate that Teams does everything that a UCaaS tool is expected to do, and 78% believe that Microsoft offers an innovative roadmap for the product. To the latter point, one pharma-tech CTO remarked: “They made the investment as well. They've definitely been pushing out roadmap items on Teams as well, and they've been able to maintain their quality from a meeting and audio perspective. They get dinged a little bit because the Teams app is clunky, and it takes up a lot of system resources. Sometimes it's slow. But from an in-meeting perspective, the audio and video are great and they've done a good job there.”

Across Product Strength analyses, Microsoft’s lowest attribute came in at 58% for “We enjoy working with our account representatives.” However, Teams still leads all other peer vendors in this analysis, suggesting something about the perception of these UCaaS vendor relationships in the industry at-large. Meanwhile, 75% of respondents say that Google Workspace is easy to implement, taking the third spot in the analysis behind Microsoft and Zoom. Respondents also note that Google executes product updates well (75%) and that the product offers good value for the money (63%).

 

Along with Microsoft and Google, Cisco and Zoom are among vendors that are considered to be the most difficult to replace, which, along with high levels of Presence, suggests a certain amount of entrenchment or stickiness in the enterprise among these four established names.

 

Situated within the Tracking vector, Cisco and Zoom, respectively, have less spending Momentum than their peers in the Leading vector, but both are widely utilized. Zoom holds the second highest Presence across the entire Market Array survey, followed by Cisco ranked third, both more pervasive than Google. Cisco is a trusted name in the space that has transitioned towards software-based offerings, untethering itself from historical hardware-based systems. About a third (31%) of Cisco’s respondents indicate plans to adopt or increase spending on the vendor (which means net new spending), while 29% indicate plans to decrease spending on the vendor. Still, 39% indicate steady spending on the vendor year-over-year, which brings aggregate flat and net new spend to 70% of Cisco’s total sampling, suggesting that the low aggregate spend velocity of 2.2% does not show the full picture.

 

In our Product Strength analyses, Cisco leads peers in providing technical support for the product (71%), beating out Microsoft Teams by one percentage-point. Respondents also say that there are technical professionals available with relevant expertise for Cisco tools (71%), that Cisco’s offerings meet expectations for UCaaS tools (61%), and that updates to the product are well executed (60%).

Innovation

Figure 5. ETR’s Market Array tracks the “Most Desired” and “Most Innovative” vendors. The above depicts a small section of that graphic illustration. The full analysis is available via the Market Array data set.

Zoom has the second highest Presence in the survey. Founded in 2011, Zoom has been around for a considerably shorter time than other high-Presence vendors. At least in part, Zoom’s relative success and stickiness as a pure play can be attributed to widespread adoption during the COVID-19 pandemic when “Zoom became almost as pervasive as a phrase as Kleenex,” as one ITDM put it. Zoom’s Pervasion carries over to ETR’s TSIS survey as well, where it is among the most pervasive vendors in the survey, and anecdotal commentary from ETR Insights interviews support the notion of Zoom’s ubiquity. While licensing and payments vary, many organizations maintain a footprint with Zoom to varying scale.

 

One real estate CTO remarked how she found Zoom more usable than competitors: “[Zoom was] actually much better than all of the competition. I'm content to stick with Zoom for those reasons…It's pretty much the default in the culture now, but at a technical level, at least from the other ones that I’ve tried, it just turned out there are a bunch of easy things I wanted to do that you simply can't do with them. [Things] that at least I could do, even if with difficulty, in Zoom.” Another ITDM describes particular use cases for Zoom lingering even after largely consolidating onto Google’s platform: “Zoom, we’ve decreased significantly, [though] it has two functions that are better than Google Meet. Number one, it has a little bit of better waiting room functionality, and then they have a webinar. The webinar functionality is great. Now Google Meet has that – it has both of those – it's just not as good.” Zoom’s webinar functionality, in particular, is in contention for best-of-breed, as it is not the first time we’ve heard an ITDM “keep a couple of [Zoom] licenses on hand for webinars and other systems like that. There’s still some value there. There’s still a lot of use for that.”

 

Seen in Figure 5 above, Zoom is considered the second most innovative vendor (19%) in the survey, trailing Microsoft at 39%. Cisco and Workspace are tied for the third spot at 9%. Most (83%) respondents say that Zoom is easy to implement, deeming Zoom the leader for this attribute. In comparison, 77% say Teams is easy to implement, and 75% say Workspace is easy to implement. Respondents also indicate that updates to Zoom are well-executed (71%) and that technical professionals with the appropriate skill set are available (69%).

 

II. Amazon (Chime), Dialpad, and RingCentral Data Sets Show Strong Spending Momentum

Amazon (Chime), Dialpad, and RingCentral fall within the Advancing vector. These vendors registered moderately strong spending intentions compared to the rest of the survey. The vendors in this vector hold the third (Amazon), fourth (Dialpad), and fifth (RingCentral) highest Momentum levels, behind Microsoft and Google.

 

The three public cloud giants continue their industry-spanning dance, and the communications space is no different. Amazon is perhaps less known for its UCaaS offerings and collaboration and productivity features than Microsoft and Google, but Chime registered the third highest Momentum. Lower Presence in the marketplace – 6th overall in the survey – precludes Amazon’s placement in the Leading vector and places it firmly within the Advancing vector. At its core, Chime encompasses the standard set of UCaaS functionalities, but it also offers some unique developer capabilities like integrating audio, video, and screen sharing features directly into applications and transitioning telephony workloads to AWS. Chime's pricing model also differs from many peers, eschewing contracts for a pay-for-what-you-use approach.

 

In a broader context, one ITDM, the Sr. Director of Technology and Operations for a large industrials enterprise, emphasized the power of AWS’s collective offerings: “AWS is new to us, and they are definitely a leader in what they do. Every year they release more and more capabilities. It's exciting from the perspective of anyone that's been around in IT for 20 years or more, how much you're able to tap into just about anything you could possibly want to build. Not just an IT department, but a company is available through AWS. You can stand up a call center, a mail server, an entire container and server infrastructure, or a virtual network globally within a few clicks. That does excite me.” However, only 38% say that the product does everything expected of a UCaaS tool, suggesting that the product still has room to mature. A real estate tech startup CTO noted: “I also tried using Amazon's AWS Chime, and that worked. I could see a use for it in certain applications. But in general, I would still stick with Zoom. It's just the path of least resistance.” In the broader context of competition between public cloud giants, productivity and collaboration is a particular area that is less developed for AWS as compared to Microsoft and Google’s full-fledged productivity suites. Given the full power of AWS, it could be an interesting shake-up should they double-down on their UCaaS offerings and make a full foray into productivity.

 

RingCentral and Dialpad accompany Chime in the Advancing vector. RingCentral’s Net Score fares better among Midsize and Small customers at 25% vs. 12% in the full sample. The majority (62%) of users and evaluators say that RingCentral is easy to implement, placing it in the top five vendors for the attribute. Additionally, 57% of respondents say that technical professionals are available, and 54% say RingCentral does everything a UCaaS tool is expected to do. Respondents say RingCentral offers the 5th highest value for money when compared to peers, and the 4th highest rate for receiving technical support.

 

A CISO and VP of Infrastructure noted how easy it is to integrate RingCentral with other productivity apps to fill any gaps: “RingCentral [takes] an excellent approach. And the interoperability, you can still use Teams or what's now the M365 infrastructure, as integrated. It doesn't exclude you from that single platform view for your endpoint to do all things collaboration and all things contact management. It’s just an extra step that's not Microsoft.” However, the business case to support an additional vendor does not always work out, as the VP of IT for a higher education institution noted: “We have RingCentral for call center and IP telephony. We have a couple of significant footprints of RingCentral that we spun up during COVID, and people like them, so they still have it. RingCentral's price model doesn't scale for us, though, so we are in the final evaluation stage of launching UCaaS with Microsoft—again, because we already have an E5 license, so we get a lot of it as part of that license.”

 

Finally, Dialpad, which is another pure play vendor known for offering extensive integrations. The vendor is positioning itself to ride the AI hype-wave, introducing services like real-time transcription, sentiment detection, in-call coaching, and detailed post-call analytics. Dialpad ranked second in ETR’s Usage vs. Spend projection, which explores the relationship between an organization's spending on a product and how much they are using that product. (See the Market Array data for full details). About half (48%) of Dialpad users and evaluators say that implementation is easy, while 42% respectively say that their product offering meets expectations for a UCaaS tool. Two-fifths (42%) of users and evaluators say that Dialpad’s roadmap is innovative, and also that technical support is readily available. Compared to more established names, however, respondents suggest that relatively fewer technical professionals with relevant experience are available for Dialpad, at 32% of the vendor’s sample. With low Presence, but high Momentum, Dialpad is a name to watch for future growth.

 

III. Additional Vendors – 8x8, Vonage, GoTo, Intermedia, Sangoma Technologies & Wildix

8x8, GoTo, and Vonage occupy the Pursuing vector, with lower relative Momentum and Presence compared to peers. Despite lower spend metrics, 8x8 fared relatively well in several Product Strength analyses. Most (63%) 8x8 users and evaluators say that the product integrates easily with their existing ecosystem, which is the second- highest rank among all UCaaS peers. An equal proportion say that the product is easy to implement (in the top four of peers). 8x8 also holds the fourth highest ranking, respectively, relative to attributes of offering an innovative roadmap and offering good value for the money. Nearly 60% say that technical professionals with relevant experience are readily available, while 56% also say that it offers value and that does everything that a UCaaS tool is expected to do. Points of differentiation for 8x8 include its XCaaS tools, which integrate voice, video, chat, and contact center, as well as AI functionality to support caller experiences and integrations with CRM tools. Three-quarters of 8x8 users and evaluators expect ROI within a year of implementation.

Within the Pursuing vector, GoTo has the greatest Presence. Half (52%) of respondents say that the tool is easy to implement, and 49% say technical professionals are readily available for GoTo. Along with the full set of standard UCaaS features, GoTo offers advanced webinar and online events functionality. Vonage rounds out vendors included in the Observatory Scope for UCaaS. Nearly half (48%) of users and evaluators say that it is easy to implement, while 39% say that technical professionals are available, and that the product offers good value for the money. Compared to peers, Vonage is ranked within the top five for difficulty to replace, which could indicate a certain amount of stickiness with the product. Beyond UCaaS, Vonage’s portfolio also includes Contact Center as a Service (CCaaS) and Communications Platforms as a Service (CPaaS), furthering its ability to satisfy communication needs.

The structure of the ETR Market Array study was designed to capture metrics based on the survey respondents’ choice of UCaaS being deployed within their enterprise, and as a result, some vendors were cited more often than others. We’ll briefly touch upon those vendors that did not garner enough citations to merit inclusion in user or spend-based analyses in the report. However, certain questions were answered by those who took a product to the evaluation/POC stage. In this survey, that includes Intermedia, Sangoma, and Wildix.

Sangoma Technologies’ holistic communication solution extends to include contact center functionalities, and the company purports to offer robust support services. Among evaluators, 46% say that the product is easy to implement, and another 46% say that updates to the product are well-implemented. Meanwhile, 42% say that Sangoma does everything a UCaaS tool should do. On a positive note, Sangoma Technologies ranks third in our Expected ROI analysis (see the full Market Array for information).

Intermedia also offers contact center functionalities on top of their UCaaS offerings, as well CRM integration, automated attendants, and real-time reporting. Nearly two-fifths (39%) of evaluators say that Intermedia is easy to implement, while only 36% say that it does everything a UCaaS tool is expected to do. Finally, the cornerstone of Wildix’s offering is their browser-based Unified Communications and Collaboration (UC&C) system. Their portfolio is further enriched with hardware offerings, including VoIP phones and headsets, designed to augment the communication experience. Within this sample, Wildix did not gather sufficient user data, however, among evaluators, only 33% said the product does everything they expect a UCaaS tool to do.

 

Conclusion: "There are a lot of horses in this race"

Despite the ubiquity of certain platform players that offer the convenience of multiple, single-vendor integrated solutions that mesh well with other components of the tech stack, UCaaS is not just a two-horse race. With so many vendors purporting to offer complete solutions, each organization must consider the set of requirements they are trying to satisfy with UCaaS tools. Even with a lot of talk about proverbial single panes, a unified one- vendor solution is not always how it plays out on the ground, and it is not always a zero-sum game. This leaves space for vendors to differentiate their offerings. And the space is still evolving with room for vendors to make moves: “I would say this is one area that we have evolved—we are historically a Cisco shop, right? We have great talent. We understand Cisco. Out of necessity in the last three years, Zoom has just gone crazy. Because we're also Microsoft, our combination is sitting kind of in between Teams and Zoom. It's still a bit of a hybrid. Frankly, as a company I don't believe we have settled that ratio yet. I've talked to RingCentral. They're a fantastic company. I've talked to Five9. They're all hanging out there, and I talk to them on a regular basis. I understand their technology, their direction as a company, and they're very, very reputable and have a great offering. So as a company or as an industry, I think this is still split. There's a lot of horses in this race, and a lot of them are neck to neck, so it'll be interesting. I'm standing on the sideline watching this race.”

Microsoft and Google offer undeniable convenience with their expansive platform offerings, but the options don’t stop there. Amazon Chime offers a compelling case for those otherwise aligned with the cloud vendor. Among pure play telephony and communications vendors, Dialpad, RingCentral, and Zoom, among others, prove they also have a spot in the POC. And Cisco, too, is entrenched in the enterprise as a steady, tried and true option. Cost-efficiency is always top of mind, but, beyond that, ITDMs are looking for fully integrated solutions that are easy-to-use and consistently available to satisfy the needs of a modern workplace. Vendors compete by differentiating their costs, level of services, and by continuously expanding and improving to offer unique and innovative feature sets. Although vendor consolidation and platform plays are the broader trends, when it comes to UCaaS solutions, there is still room for the individual vendor that best suits an organization’s unique needs.