Cloud Communications Market Will Triple in the Next Five Years
Cloud communications continues to grow at pace
The marketplace for cloud communications has been growing rapidly not just over the last year, but for quite some time now. The Cavell Group, one of the leading analyst groups in the industry, has recently conducted a new piece of research into the cloud space, particularly in the European landscape. They believe that the cloud is ready to move at a faster pace than ever before, with new opportunities for businesses of all sizes.
To learn more about the changing nature of the European cloud, I caught up with Dominic Black, the Head of Research at the Cavell Group. He shared his thoughts on the findings from the recent study, as well as offering a few useful comments on the state of the marketplace overall.
What Did You Find in Your Recent Study?
Dominic told me that the latest report took place in the second quarter of 2019, covering the first half of the year and the trends to come. So far, the European market has seen stronger growth in some countries, while others have struggled to reach their full potential. Germany hasn’t had new entrants lately, which is quite surprising considering the size and potential of the market.
“It’s strange that no-one has been able to crack Germany yet. Some companies are setting up in different spaces around the world, but few have achieved any real hypergrowth outside of their own countries”
Notably, Dominic said that If you consider the top ten cloud brands in every country across Europe, the UK is the only one that offers non-home-grown providers in that top 10. “I think that the growth in acquisitions in the cloud space is starting to tackle that problem to some degree.”
Do You Anticipate more Acquisitions?
Currently, Dominic believes that acquisitions are going to be very important in the industry. This is particularly true for businesses that are moving into new countries. “While entering new countries dynamically is great, hiring a local team that knows the market isn’t always easy. Acquisition makes things a little easier and helps companies to develop more rapidly. However, brands will need to ensure that they do have the right cultural fit.”
According to Dominic, there needs to be a lot more consolidation in the EU market going forward. Companies need to decide whether they want to maintain their own platform, or whether it’s important to start focusing on sales and marketing instead.
“Customers are very interested in getting involved with things like Microsoft, Google, and Zoom with its new phone system. For very core telephony products, companies are going to go with hyperscale providers, which means that smaller businesses need to choose their niche and start differentiating themselves fast.”
What are the Headline Changes You See Going Forward?
Dominic told me that one major thing the Cavell Group has seen in the UK market is a definite slow down. Although the industry for cloud is still growing in terms of net new users, it’s not as robust as it could be. A lot of companies blame this problem on Brexit and the indecision that’s been harming the market. However, all the markets in Europe are struggling to meet the predictions that had been put in place for them.
“I think that providers are still seeing growth in cloud, but they’re not achieving anything close to what we expected. France and Germany, for instance, offer amazing opportunities going forward, but we’re not at the stage yet where the sales and marketing efforts are really relaying the benefits of moving into the cloud.”
I asked Dominic where he thinks the cloud space is heading in 2020. He told me that one of the most interesting things for the Cavell Group is the change that’s happening in the market beyond the numbers. Hyperscale companies are evolving, and legacy environments are becoming less common. People are spreading across the globe with the help of agile cloud innovators.
“We’re currently working on a number of projects to help providers to look for ways to move internationally and continue growing. We can help businesses understand the dynamics of the environment from a strategic point of view”
Will Cloud Communications Continue to Grow?
According to the Cavell Group, the market for cloud seats is set to triple in the next five years, and Dominic doesn’t think that’s an aggressive prediction. “Penetration rates across the board are huge. Though I think that new technologies always take a while to be adopted. We’re getting there.”
Dominic said that the cloud is still facing issues, because it offers the same things as on-premises tools, just in a different environment. However, things like the recent announcement between RingCentral and Avaya will start to make a major difference. The collaboration between RingCentral and Avaya is indicative of where the market is going, and it could help other brands to start shifting to the cloud more aggressively. “Acceptance of cloud by PBX vendors is going start pushing things through more aggressively.”
One additional point that Dominic made was that everyone seems to be talking about Zoom right now as the “de facto” meetings platform. It’s becoming almost as ubiquitous as Google according to Dominic with people saying that they’re just going to “set up a Zoom” rather than hosting a video meeting. Zoom has proven itself to be an excellent marketing machine, and other brands need to learn from it going forward.