Microsoft and its flagship Teams solution are the market-dominant forces in UC and collaboration. It’s a truth as immutable as death and taxes.
While there’s plenty of legitimate debate about the *best* UC and collaboration platform and vendor for this or that industry or organisation, Microsoft is unequivocally the most dominant in terms of market share—and that dominance seems to be only growing.
A recent report from the International Data Corporation (IDC) found that Microsoft now accounts for 45.6 percent of the global unified communications and collaboration market. In 2024, the IDC reported that the tech giant posted $31.5 billion in UC&C revenue, a 14 percent year-over-year increase. According to the IDC, this growth turbocharged Microsoft’s market share with a striking 2.4 percentage point gain over 2023.
By contrast, the IDC highlighted that despite Zoom reporting a one percent year-over-year increase in UC&C revenue, reaching $4.3 billion, its market share dipped slightly to 6.2 percent, marking a decline of 40 basis points from the previous year. Additionally, Cisco saw a 4.6 percent year-over-year decline in its UC&C revenue in 2024, bringing in $3.7 billion. This downturn also resulted in a market share drop of 70 basis points, reducing its share to 5.3 percent.
This isn’t a slight on the quality of Microsoft Teams’ closest competitors. Cisco Webex remains a sophisticated, feature-rich platform that’s constantly innovating. Zoom Workplace has successfully evolved into an impressive AI-powered all-in-one collaboration hub while preserving the intuitive UI and UX it became renowned for during the pandemic. Webex and Zoom Workplace are terrific UC&C solutions that would see most businesses in most sectors thrive. Microsoft very simply enjoys a meaningfully greater market share.
Is Microsoft’s Dominance as Pronounced as the IDC Report Suggests?
Naturally, there is some healthy debate about the true extent of Microsoft’s market dominance.
“We can’t disagree that Microsoft plays a very important role in the UC space,” Dom Black, Director of Research at Cavell, told UC Today. “They’ve done incredibly well there. The 46 percent just seems a bit high to me.”
“When you look at Microsoft’s revenue, the whole productivity in business processes, which includes all the Microsoft 365, all the consumer stuff, all the LinkedIn stuff, all the Dynamics 365 stuff, is $77 billion. If we’re saying that $31.5 billion of that is directly into the UC space, it’d be interesting to see what exactly that number looks like in terms of what we count in UC&C revenue.”
“From my perspective, if you look at the stats, Microsoft has over 20 million Teams Phone-enabled users at the moment,” Black added. “Webex has 17 but another 30 million on Broadworks globally, RingCentral has a few million in there, Enreach has a few million, Zoom too, it says it’s now above 10 million. You start adding all that together to around 110, 105 million global UCaaS users. If Teams has only got 20 million of that, that’s less than 25 percent, and you’d expect that to be lower in revenues because Teams costs less than some of the services out there.”
“Let’s not diminish Teams’ position in the market, but there are many other providers doing very well in the UC&C space. I don’t think we’re counting apples and apples here. I disagree with it slightly, but its message is strong that Microsoft is doing so well in the enterprise space.”
As Black noted, irrespective of the precise percentage of market share Microsoft now owns, it continues to do incredibly well in consolidating its lead position.
Why Microsoft’s UC&C Grip is so Tight
Microsoft’s dominance in UC&C stems from deep enterprise reach, aggressive bundling, and strategic integration. When Microsoft folded Teams into Microsoft 365 at no extra cost in 2017, it sparked a colossal shift. By offering a fully featured collab platform essentially for free to customers already paying for Word, Excel, and Outlook, Microsoft steamrolled into the UC&C space.
Enterprises, already deeply embedded in the Microsoft stack, had little reason not to adopt Teams. As the service speedily transformed from a Slack-like chat tool into an extensive meeting, calling, and collaboration ecosystem, it became increasingly difficult to justify separate investments in alternative platforms. This bundling has been so assertive that the European Commission has launched an antitrust investigation concerned with its stifling competition.
The immense scale of Microsoft’s enterprise reach also plays a critical role. Few vendors can come close to the breadth of its influence across myriad industries and regions. The company’s licensing model, long-term enterprise agreements, and widespread IT familiarity give it a decisive edge.
For many IT leaders, then, Teams has become the path of least resistance. This is not just for chat and video but also file sharing, app integrations, and increasingly since 2023, AI-driven productivity tools. In truth, Microsoft’s strategic investment in AI through Copilot and its integration into Teams, Outlook, and the broader Microsoft 365 suite are only tightening its grip.
For many enterprises, Teams is more than just a bog-standard UC tool; it is now the irreplaceable core of their digital workspace. Breaking this habit is increasingly problematic.
Why Microsoft’s UC&C Power Could Be a Win for Enterprises
From a procurement and deployment perspective, Microsoft’s dominance offers undeniable advantages. At a time of shrinking tech budgets, enterprise IT leaders under pressure to deliver more with less can consolidate tools under one familiar vendor to simplify management and streamline user adoption while reducing redundancy risk.
There’s a powerfully clear cost efficiency argument to be made. As outlined above, Teams is often already included in enterprise Microsoft 365 licenses, meaning it can deliver robust UC&C capabilities without additional spending. In a world of budget constraints and deep economic unpredictability, the capacity to standardise on a platform without ballooning costs is undeniably attractive. Licensing simplicity and predictable pricing models hand CFOs fewer headaches and IT teams more predictability.
The centralisation of collaboration into one unified ecosystem can also refine or elevate the user experience. When Teams is seamlessly integrated with Outlook, OneDrive, SharePoint, and now Copilot, users enjoy a smooth experience that reduces context-switching and underpins easy adoption. This cultivates a cohesive digital workspace that emboldens productivity across a menagerie of devices and workstyles.
Security and compliance count among the other strong cards in Microsoft’s deck, despite some recent high-profile controversies around ransomware attacks. Enterprises operating in regulated spaces recognise the maturity and auditability of Microsoft’s tools. With unified governance policies and data retention controls baked in, Teams helps IT leaders tick boxes on everything from GDPR to ISO compliance.
In short, Microsoft’s dominance isn’t just about vendor lock-in but delivering tangible operational benefits that many enterprises must consider. It may not be perfect, but for many leaders, it’s “good enough” and far more than that when objectively viewed through the lens of integration, cost control, and user familiarity.
Why Microsoft’s UC&C Stronghold Raises Red Flags
Despite the clear efficiencies, Microsoft’s overwhelming dominance also brings real risks and an increasingly pervasive unease. As more of the enterprise digital workspace becomes dependent on a single vendor, organisations expose themselves to concentration risk. The very integration that makes Teams so convenient also means that if Microsoft goes down, everything goes down with it.
That was never made so crystal clear as last year’s IT outage that swept the globe. This was ultimately traced to a faulty update from cybersecurity firm CrowdStrike. However, the incident, which affected many Microsoft solutions, initially catalysed fears of a mass cyberattack targeting Microsoft by malicious actors. While investigations later confirmed that CrowdStrike’s update error caused the disruption, the incident highlighted the fragility of the working world’s dependence on Microsoft’s solutions.
Meanwhile, vendor lock-in is perhaps the most persistent concern. Microsoft’s bundling strategy, while cost-effective on the surface, limits market competition.
As the European Commission’s antitrust investigation into Teams’ bundling with Microsoft 365 suggests, these practices may stifle innovation by making it harder for alternative providers to compete on a level playing field. This lack of competitive pressure could lead to stagnation in product development or force enterprises into tech decisions driven by licensing terms rather than genuine user needs.
“Microsoft has reached de facto standard status (in UC&C),” said Zeus Kerravala, Founder and Principal Analyst of ZK Research, told UC Today. “By all accounts, Teams is in there as their primary UC vendor when you talk with businesses. When that happens, the only way another vendor can disrupt them is through innovation or cost. What worries me about this industry is that most vendors have decided to do it by cost.
“Zoom has rolled out feature after feature, but has held the price. They have more customers and products than they had before, but their market cap is less than it was pre-pandemic.”
Over-reliance on one vendor also has a cultural cost for enterprises. Uniformity may make IT’s job easier, but it can hamstring innovation. A single-vendor strategy can make it more problematic to experiment with emerging tools or pivot quickly in response to new trends. Enterprises looking to differentiate or gain a competitive edge via digital transformation may find their options more limited than they realise.
Another viable concern is Microsoft’s aggressive AI push. While Copilot is promising, it’s still in the early days, and enterprises are being asked to buy into AI add-ons with substantial price tags before they’ve proven tangible ROI. With Microsoft laying the brickwork on what AI in collaboration looks like, enterprises risk losing control over how they evolve their digital workplace.
Fundamentally, the danger isn’t that Microsoft Teams is a bad product by any means; it’s that the market has few viable alternatives at scale. Without genuine choice, buyers lose leverage. That’s bad for not just pricing power but innovation, flexibility, and long-term digital resilience.
“The question from here is, can somebody disrupt Microsoft using something as a differentiation before they reach monopoly-like status?” Kerravala said. “When that happens, it creates a deflationary effect for everybody around them and allows them to raise prices up, which is what they’ve done historically.”
