Gartner has released its UCaaS Magic Quadrant 2023, which displays the UCaaS market leaders.
Vendors from across the UC industry seek a coveted top right-hand corner position of its "magic quadrant"; those leaders whose products and services make it an excellent option for potential customers.
Gartner also lists notable challengers for the leaders' thrones, as well as those vendors who can be considered niche players and visionaries.
Changes from MQ 2022
As with last year's Gartner report, most of the UCaaS providers and their positions are largely unchanged.
Again, Microsoft leads the way with its colossal Teams offering, followed by RingCentral, Zoom and Cisco respectively — identical to their positions for 2022. As with last year, too, 8x8 takes fifth place.
One of the two most notable changes from last year has been GoTo falling out of the "Challengers" quadrant, and dropping into the "Niche players" quadrant.
The other is that Windstream no longer features at all on the Gartner quadrant, having been removed from the niche players section.
Elsewhere, Google is considered by Gartner to be the only challenger now GoTo has dropped down, while Dialpad, who entered into the quadrant's consideration last year, also preserves its place as the only "Visionary".
Sangoma, Vonage and Wildix all keep their places as niche players.
UCaaS Leaders
- Microsoft
- RingCentral
- Zoom
- Cisco
- 8×8
Microsoft
It's been another seismic year for Microsoft, which retains its leader crown. Microsoft Teams, its comprehensive solution encompassing telephony, messaging, and meetings, operates globally, serving businesses of all sizes and industries. Recent updates include pay-as-you-go calling plans for minimal external calling needs, the introduction of Teams Phone Mobile, and survivability tweaks allowing both internal and external calling.
Notable features include busy-on-busy support, music-on-hold for transfer scenarios, and federated group calling for federated tenants. The launch of Teams Premium earlier this year, with advanced features available as separate add-ons, positions Teams as a versatile choice for organizations desiring intelligent collaboration and advanced workplace experiences, refining its appeal across global business landscapes.
Strengths
Gartner's positioning of Microsoft reaffirms Teams as the leading choice, particularly for organizations already leveraging Teams for messaging and meetings. The platform's telephony capabilities have garnered widespread approval, aligning with evolving user preferences that prioritize collaboration over traditional telephony. Microsoft's commitment to enhancing telecom partner relations is evident in the growing adoption of Operator Connect services, with approximately 70 telecom operators now integrated, spanning diverse global regions.
Over the past year, Microsoft's strategic moves have sparked increased interest, particularly among Small and Medium-sized Businesses (SMBs). The company expanded its calling plans to cover 35 countries, extending its reach and accessibility. Notably, Microsoft responded to market demands by introducing pay-as-you-go calling plans, a feature highly sought after by organizations with minimal PSTN outbound call volumes.
Caution
The introduction of Teams Phone Mobile, pay-as-you-go calling plans, and the Operator Connect program for PSTN connectivity has introduced uncertainty among organizations regarding the most suitable PSTN connectivity option for their needs. Gartner clients often express confusion about the Operator Connect offering and its distinctions from Direct Routing or Microsoft Calling Plans, highlighting the need for clearer communication and understanding in this evolving landscape.
For organizations with advanced telephony requirements, Microsoft Teams Phone still reveals certain gaps. While it serves basic needs well, organizations with advanced telephony use cases often resort to third-party telephony solutions for features like multiline hunt group capabilities, attendant consoles, advanced call queuing, interactive voice response, and advanced call recording.
Gartner clients also report uncertainty in the realm of call center options within Microsoft Teams Phone. The introduction of Dynamics 365 with a first-party voice channel contact center offering, followed by the Microsoft Digital Contact Center Platform integrating Dynamics 365, Teams, and Nuance, has caused confusion. Notably, Microsoft has yet to provide a self-developed Microsoft Teams call center option, indicating a lack of internal coordination across different product teams.
RingCentral
RingCentral keeps the silver medal as a leader, offering the RingCentral MVP platform featuring telephony, messaging, meetings, and contact centre capabilities. Tailored for customers of all sizes, RingCentral's remit extends across North America, Europe, and Asia.
Recent enhancements illustrate RingCentral's commitment to innovation, including RingSense AI for conversational summarization, speaker identification, and interaction analytics. The introduction of the RingCX contact centre, CRM integrations with Salesforce and Zendesk, SMS integration with RingCentral numbers, RingCentral Automator for business workflows, and RingCentral for frontline workers highlights the platform's adaptability and varied capabilities, strengthening its leadership position in the UC space.
Strengths
RingCentral continues to invest heavily in third-party application integration, facilitating the delivery of advanced features through no-code, low-code, and pro-code solutions. This approach resonates particularly well with UCaaS buyers who prioritize customization and programmability in their communication solutions. By focusing on flexibility and adaptability, RingCentral caters to the diverse needs of organizations seeking tailored communication solutions.
The introduction of RingCentral's natively developed RingCX contact center solution marks a strategic move to address the evolving landscape of business requirements. This development allows RingCentral to meet the demand for consolidated UCaaS/CCaaS services, aligning with the preferences of UCaaS buyers who seek integrated solutions from a single provider. RingCentral's service delivery boasts an impressive track record with 19 consecutive quarters of uptime as of the latest evaluation and an availability SLA target of 99.999%.
Caution
RingCentral's primary market differentiator lies in telephony, a facet of customer communications that currently holds less sway in decision-making. The company's strategic move to reposition its Microsoft Teams integration, emphasizing telephony-only integration over its broader UCaaS capabilities, presents a potential future entry point for customers into RingCentral's UCaaS suite. However, this shift poses an additional challenge as it necessitates convincing customers to adopt the full collaboration value proposition rather than focusing solely on telephony, reflecting the evolving dynamics of customer preferences in the UCaaS market.
Despite RingCentral's efforts, its self-developed RingCentral Video solution lags behind competitors in various aspects, including brand recognition, user familiarity, support for large groups, and advanced capabilities such as 1080p full HD video, polling, and industry-specific features. RingCentral's investments with legacy UC technology partners, such as Avaya, Atos/Unify, and Alcatel-Lucent, have not yielded the forecasted customer growth. The relationships may no longer be exclusive, suggesting the need for strategic reassessment and potentially seeking new avenues for customer acquisition.
Zoom
Zoom keeps its place on the podium this year, with a third-place finish in the eyes of Gartner. The vendor provides a comprehensive suite including telephony, meetings, messaging, and contact centre functionalities. Operating globally, Zoom caters to organizations of all sizes, though possessing particular strength among large multinationals.
Recent advancements highlight Zoom's commitment to innovation, such as the Zoom Intelligent Director for optimal camera framing, enhancements to Zoom Contact Center, support for Apple CarPlay in Zoom Meetings, survivability enhancements and telephony delegation in Zoom Phone, and improved features in Team Chat, including folders, filters, and bookmarks. The recent releases of Zoom Mail, Zoom Calendar, and Zoom Scheduler further underline Zoom's status as a versatile UCaaS leader.
Strengths
Zoom has exhibited remarkable growth over 12 months, boasting a 90% expansion that surpasses the performance of most of its competitors. Notably, Zoom achieved a higher influx of UCaaS users, including telephony users, in the past year than in any previous year, underlining its robust market presence.
Zoom's strategic investments in Zoom Contact Center, identified as one of the highest-priority areas for new features on its roadmap, have yielded substantial advancements in functionality. Gartner's observation of significant adoption of Zoom Contact Center over the past year suggests a positive market response, with expectations for Zoom to further enhance its capabilities in the coming 12-18 months. Additionally, Zoom stands out among UCaaS vendors for its deep integration of AI into its offering over the past year.
Caution
Zoom underwent a workforce reduction of 15% in the past year, raising concerns among Gartner clients. While Gartner does not view this action as a significant indicator of business risk, occasional monitoring is recommended to ensure the continued health of Zoom's business operations.
In contrast to its historically aggressive approach in terms of pricing and promotions, Zoom has exhibited a more tempered strategy in the past year. Gartner has observed a shift in this approach, with some clients receiving renewal proposals featuring more moderate discounts compared to previous terms. Buyers, especially existing Zoom customers, should be mindful of this trend when engaging in negotiations for renewal terms.
Cisco
Cisco remains a Leader in the quadrant thanks to its comprehensive Webex suite, which offers a thorough portfolio of services, including telephony, messaging, collaboration, meetings, and contact centre functionalities. Leveraging an impressive network of global partners, from MSPs and SIs to telecom operators, Cisco illustrates a robust collaborative ecosystem.
Recent enhancements showcase Cisco's commitment to evolving technologies. These encompass Voice Queues integrated into Webex Calling, fortified survivability for Webex Calling Dedicated Instance, Thousand Eyes performance monitoring via Webex Control Hub, and Control Hub as a Coach for actionable admin insights.
AI has become critical to Cisco's UC portfolio, spanning Meetings, Contact Center, and Admin Portal, while the addition of Webex Go, a mobile solution seamlessly integrated with carriers, strengthens Cisco's focus on innovation and scalability. Gartner says that this positions Webex UCaaS as an ideal choice for organizations of varied sizes, particularly catering to the needs of midsize and large enterprises.
Strengths
Cisco holds a unique position as the sole vendor classified as a Leader by Gartner that can provide a comprehensive, self-developed UC portfolio. This holistic approach positions Cisco as a one-stop solution provider for organizations seeking a unified and seamlessly integrated communication and collaboration environment.
With a longstanding history as a UC/UCaaS vendor, Cisco boasts deep expertise and significant investments in security, regulatory compliance, and industry-specific capabilities and certifications. Particularly notable is Cisco Webex's ability to cater to organizations in highly regulated industries, including healthcare, financial services, public sector, government, and public utilities, irrespective of the regulatory requirements originating from the U.S., U.K., Europe, or Asia. Cisco's recent investments in Webex Control Hub further enhance its competitive edge, introducing features like localizations for numerous countries, a global partner ecosystem, flexible configuration options combining cloud services with on-premises infrastructure (suited for less-developed regions or countries with stringent telecommunications regulations), and robust survivability capabilities.
Caution
Gartner client perception indicates that Webex's offering is perceived as more expensive compared to its competitors, even when considering other vendors classified as Leaders in the Magic Quadrant. In response to this feedback, Cisco introduced a more competitively priced suite offer in 2021, encompassing eight different workloads, including AI. However, recent Gartner client feedback suggests that despite this adjustment, competitor pricing is still perceived as more aggressive in the market.
For organizations in need of a unified communications solution tightly integrated with a small or midsize contact center (up to 250 agents), Webex Contact Center presents an effective option. However, for larger enterprises seeking expansive, high-volume contact center solutions with over 1,000 agents, the preference still leans towards leading stand-alone contact center providers. Notably, organizations that are already Cisco customers using Unified Communications Manager (UCM) often opt for collaboration capabilities from competing UCaaS providers. In cases where organizations prioritize cloud telephony and choose to allocate their collaboration business to competing UCaaS vendors, the appeal of the full Unified Communications and Collaboration (UCC) Webex offering becomes less compelling.
8x8
8x8 lands a fifth-placed finish, with the core of its offerings being the 8x8 XCaaS suite. This encompasses the 8x8 Work for telephony, meetings, and team messaging, a robust contact centre, and business-integrated analytics. Notably, its clientele spans diverse sectors, with a key focus on midmarket entities in North America and the UK.
The company's latest enhancements illustrate 8x8's commitment to innovation, including precise telephony SPAM blocking, Sales Workspace for streamlined CRM integration, a dedicated Phone app for Microsoft Teams, expanded global calling capabilities, and user-friendly Mobile Admin app. These innovations, complementing features like live meeting transcription and Salesforce integration, reaffirm 8x8's position as a comprehensive and forward-thinking provider in the market.
Strengths
8x8 remains a strong choice for organizations seeking bundled UCaaS and CCaaS solutions, particularly those with less advanced contact center requirements, typically having fewer than 300 contact center agents. With PSTN replacement available in 58 countries worldwide, 8x8 stands out among vendors offering native calling plans extensively across global regions, including China, a recent addition that expands its global reach.
In the realm of organizations that have already adopted Microsoft Teams for messaging and meetings but require advanced telephony features, 8x8 is well-positioned to deliver both UCaaS and CCaaS solutions. Notably, 8x8 distinguishes itself as one of the few UCaaS vendors offering a natively integrated Microsoft Teams contact center solution, catering to the evolving needs of businesses integrating Teams into their communication workflows.
Caution
