A study from Synergy (News - Alert) Research Group that was released earlier this week is indicating that the market for cloud based communications solutions tailored for businesses is continuing to grow at a rapid rate. After the first quarter of 2017, the research group determined that the current annual growth rate of this market is at about 23 percent annually, meaning that each year, a little less than a fifth of the market will be brand new. In total, the cloud communications market is generating over two billion dollars in revenue each year, and that figure is only expected to grow.
Retail sales of unified communications solutions for business still make up the lion’s share of the market, responsible for about 70 percent of revenue. However, the wholesale unified communications market, which facilitates deals more to middle men, is growing at a much faster rate, and is expected to be a major contributing factor to the continuing growth of the cloud based communications market as a whole. RingCentral, 8x8 (News - Alert), Mitel, and ShoreTel are among the leaders of this industry at the moment and are the ones pushing the growth the hardest.
Those at Synergy Research Growth believe the main reasoning for this growth is the removal of entry barriers such as cost and legacy technology. “UCaaS continues to be a force for change within the business communications market,” said Jeremy Duke, Synergy Research Group’s founder and Chief Analyst. “Major barriers to cloud adoption are now almost a thing of the past and consequently we are seeing continued erosion of on-premises PBX (News - Alert)-based systems. Clearly these trends will continue over the next few years.”
More and more businesses are turning to cloud based communications services due to their flexibility and reduced costs. The cloud based nature of these services allows them to be built in line with the exact specifications and needs of each individual business, and at a fraction of the cost of legacy telecommunications systems. As initial installation costs continue to drop and Internet speed and reliability continues to improve (allowing more networks to support fully cloud based systems), this trend should only continue.
Edited by Alicia Young