Synergy, a research company, dedicated to providing insights into the IT and cloud-focused markets, recently released a new report. According to the Synergy research team, the Q1 market for conferencing SaaS is growing at a fantastic pace. A growth rate of 17% year-over-year brings the market value to more than $800 million.
What makes the evolution of VaaS/VCaaS even more exciting, is the fact that the growth focuses around a single vendor: Zoom. Although other major venues have seen their revenues flatten or fall, Zoom grew by a massive 148% in the first quarter of 2019. According to Synergy, this has a lot to do with the current structure of the market.
Zoom Leads the Way for VCaaS Growth
According to Synergy, the current marketplace consists of two crucial segments. The larger segment is the traditional video and web conferencing solution, led by companies like LogMeIn, Cisco, and Microsoft. Revenues from this space were practically flat, reducing by around 1% last year.
The smaller segment for VCaaS jumped by around 80%, dominated by Zoom, whose market share was almost ten times greater than its nearest competitor. Although Cisco still maintains a number one ranking in conferencing SaaS solutions, VCaaS market share has been growing at a steady rate. At the end of 2017, the growth rate was 15%, by the end of 2018, it was 20%, and by the final quarter of 2019, we had reached 27%.
The fastest growth for VCaaS arrived, unsurprisingly, at the beginning of 2020, when the market achieved another 7% percentage points. According to Synergy’s forecasts, in the next five years, VCaaS will continue to take on a much larger share of the market.
Exploring Market Opportunities
According to Jeremy Duke, the Founder and Chief Analyst of Synergy Research Group, the market was already moving in a direction that favoured VCaaS. There also seemed to be an obvious trend towards Zoom. However, the impact of the COVID-19 pandemic has taken that trend to the next level.
Before this, VCaaS was gaining traction among large enterprises and the mid-market. The technology helped to expand new opportunities. Now, we’re starting to see usage of VCaaS blossoming across the globe. According to Duke, Synergy expects to see the gains continue long after the impact of the pandemic has begun to reduce.
