UC Insights 2018: Top Trends for Cloud Business Communications 2018

By Fazil Balkaya, Principal Analyst, Balkaya Consulting

Happy New Year everyone!  As we have had a jump-start to 2018 with the Star2Star and Blueface merger, it is evident that we should expect a fairly exciting year in the era of cloud business communications. What’s next to come? More mergers? Big-entrants? Advanced tech? Here are my predictions:

1 – Consolidation trend to continue

Fazil Balkaya
Fazil Balkaya

It will be no surprise to see more mergers in the headlines. Compared to the last couple of years, we should expect to see more transatlantic mergers like we did with Star2Star & Blueface and Evolve IP & Mtel. In addition to the market familiarity and operational synergies local players can bring, GDPR will also impose a significant challenge to vendors outside Europe, potentially making them targets for North American companies.

In the overall picture, RingCentral and 8×8 remain to be the two big pure cloud names yet to be acquired. Will they get acquired by new entrants or giant players? Are we going to see a bolder push from the likes of Google, Apple and Facebook? I would also expect to see Mitel staying active in the M&A space.

I also expect Fuze to finally IPO this year.

2 – Can Avaya stay relevant?

Avaya has successfully managed to survive Chapter 11, which many thought impossible. Hats off to them, but I do not expect Avaya to be more than a me-too vendor in this era, unless they completely revamp the company and innovate at a pace that none of its digital peers have managed to do so far, or somehow acquire a competitor to accelerate efforts – both look unrealistic today. The ship has pretty much sailed for Avaya and they have been a top target for enterprise migrations. Moving forward, their best bet is to convert the largest portion of their massive installed base over to cloud, and make it as seamless and high quality as possible.

3 – UCaaS truly goes upmarket

UC Insights 2018 - Unified Communications Forecast - CommsTrader.comUntil recently, up-market deployments have mostly been on single tenant offerings of traditional PBX vendors’ amalgamated products, whereas the SMB market was fairly crowded by the multi-tenant platform providers. Multi-tenant providers have finally realised this opportunity and are investing heavily to grab share in the upmarket. Fuze and 8×8 have been among the first entrants, but RingCentral, BroadSoft, Mitel and many others are enhancing their offerings to address larger segments. Cisco will obviously have a stronger hold post-Broadsoft merger and Microsoft is also striking back with Teams and on-premises integration.

The majority of the vendors attacking up-markets have some sort of a unified portfolio of multiple services. Unless the vendors looking to grab share in this market become competitive soon, entry barriers will be very high and only handful of players will remain strong.

4 – Artificial Intelligence to take baby steps in becoming mainstream

Unlike other cool technologies, AI is among the top that provides a solid business case in addition to an enhanced customer experience. Therefore, it will be a differentiator in the contact centre / customer contact space and vendors like Genesys, NICE inContact and BroadSoft have already been investing into it. Further, AI platforms like Salesforce and IBM will accelerate the adoption of AI powered services.

Other cool technologies like virtual reality and voice assistants appear too early and immature to be adopted. There could be niche business cases, but 2019 and beyond seems more likely to actually talk about them being among key selection criteria and providing key business benefits. This is going to sound rough, but vendors need to make sure their core offerings work smoothly before they push more advanced but niche services.

5 – Customer contact vendors to have a fruitful year

We are seeing an increased demand of contact centre-like features from the enterprises who further understand the benefits of delivering great customer experience / service, but unclear on the business case of a fully featured contact centre service, or simply find it expensive. With the new business economics and the ability to expand UC offerings through adding point solutions to become basic contact centre solutions; call-recording, reporting & analytics vendors could be poised for a great year.

6 – Still early for CPaaS

Although CPaaS has been successful in the likes of SMS & international numbers, it has been pretty much isolated from employee interaction-centric workflows, particularly due to vendors not clear on the monetisation of such services. I expect this trend to continue in 2018, however, vendors should pay close attention to how to enable communications enabled business processes in verticals. Providers who seamlessly can embed communications into familiar business interfaces will have a natural competitive advantage. I foresee this to become a trend post-2019, becoming front & centre of digital transformation initiatives.

UC Insights 2018 - Unified Communications Forecast - CommsTrader.com
7 – Local European Providers to Thrive

For obvious reasons, European markets are natural next steps for North American vendors. Due to the GDPR, many North American vendors will now need to re-evaluate their expansion strategy as significant investments in compliance will be required. Similar to Eastern European, Middle Eastern and Asian countries, they might prefer to partner, acquire or even avoid certain markets. Therefore, European vendors and providers should be up for a fruitful couple of years with expanding opportunities.

By Fazil Balkaya, Principal Analyst, Balkaya Consulting

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