The latest executive briefing from Frost and Sullivan, Shifting Market Dynamics Require The Right Service Provider Partner, takes a timely look at the turbulent UC market. We spoke to the report’s author, analyst Michael Brandenburg, about the need for this updated overview.
“On the provider side there are so many mergers and acquisitions, and some – such as Cisco’s acquisition of Broadsoft – raised a lot of questions. On top of that, the UK market is growing rapidly, and a lot of people are starting to look around and reassess their choices.”
A perfect storm
The dynamic shifts which the research observed are being driven by a range of factors, combining to create pressure for change. As Brandenburg elaborated:
“Users are expecting more – more collaboration, more data, more tools”
Business communications are now about so much more than voice telephony, and effective UCaaS are being demanded by a diverse and growing range of customers. “It’s changing the relationship between the supplier and the vendor, who can now deploy new solutions very rapidly”.
The technology makes these bundled services more accessible. But from the point of view of both cost saving and simplicity, it’s changing the terms on which people do business – with more clients being forced into SaaS models.
“That’s where some of the tension is, it’s not business as usual any more. If you’re paying a subscription to a vendor, you have to sell subscriptions in turn to your customers. It can be challenging to see where the ROI is, compared to traditional deployments”.
Driving partnership decisions: what matters most?
So navigating customer expectations in the competitive UCaaS market will remain the challenge for providers keen to exceed expectations. The decision-making factors highlighted in the report will be helpful, and Brandenburg stressed that the real scope for differentiation lies in the user interface.
“Reliability and security concerns are relatively constant, through several iterations of our annual surveys”, he explained – a hygiene factor that all providers must address first, and a novel challenge for IP services compared with traditional telephony, where you could “always trust a dial tone” – it’s harder to trust the internet.
But once that trust is established, the options open up – or, as Brandenburg summed it up, “the blessing and curse of choice”.
At this point clients can consider their own priorities for operational efficiencies, open standards, flexible investment options, and the road-maps of their prospective suppliers – in order to make an informed choice about their UC partner, who will need to prove themselves agile and responsive as the options for customers only increase.
Bespoke partnerships and packages
As we move past this point of market turbulence to the future, Brandenburg predicts, “a more differentiated experience… certain customers will be geared towards certain providers because of this, and vendors will have to build solutions that meet more niche expectations. There may be a bifurcation, between ‘cloud first, cloud only’, and those who want to manage and customise things themselves, who will gravitate in different directions”. He also predicts “a lot of virtualisation – and APIs to fill in the gaps and create a really tailored experience, up and down the ecosystem”.
“We’re definitely at an inflection point, it’s a moment to step back and say, how do we want to be a UC provider? Who is going to partner with us, to help us customise it, and make it our own?”
But all these evolutionary shifts can only be a good thing for customers and for the UC space as a whole, as vendors become ever more agile and flexible, finding niche markets, and “figure out what they really want to sell, rather than telling customers what they need”.
