Current Landscape and Future State of UCaaS Clark Peterson

Current Landscape and Future State of UCaaS
Clark Peterson
President, Business Solutions Group
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What is UCaaS?
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Unified Communications & Collaboration
Traditional UC
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Collaboration
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The UCaaS Market is Large and Growing Quickly
Cloud PBX Replacement Spend
$14B
$3B
2015
< 100 seats
29%
CAGR
2021
> 100 seats
Source: Frost and Sullivan
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Current Market Share
Hosted IP telephony and UCC services will
grow from 8% of total business telephony users in 2015 to 28% by 2021
8%
28%
2015
Potential Users
Hosted
28%
2021
Source: Frost and Sullivan
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Consistent and Strong Growth Projections for Both UCaaS and UCaaS/Access
Revenue without Access
$14B
Installed base and revenues will grow at a
steady pace throughout the forecast period,
with no major inflection points.
$3B
Revenue with Access
Installed Users
42M
$21B
$5B
11M
Source: Frost and Sullivan
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Market Overview – Segmentation by Type of Access
Approximately 1/3 of all installed
users receive services over the top
Managed Bandwith
Over the Top/BYOB
Source: Frost and Sullivan
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Market Overview – Segmentation by Customer Size
About 80% of installed users are in
businesses of up to 500 employees
Businesses with up to 50 users
Businesses between 50 and 500 users
Businesses with more than 500 users
Source: Frost and Sullivan
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Hosted vs. On-Premise Growth/Decline
Total Cloud-Based Telephony Spend
CAGR 2014-2019
SoHo
Small Business
Total Premise-Based Telephony
CAGR 2014-2019
Midsize Enterprise
Larger Enterprise
40.0%
34.8%
30.0%
20.9%
20.0%
12.8%
10.0%
4.0%
0.0%
-3.5%
-6.6%
-10.0%
-10.7%
-14.3%
-20.0%
Source: Gartner Inc.
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Growth by UCaaS Products
70
% of Adoption
60
50
IP Telephony
Video Conferencing
Web Conferencing
IM
Email/Calendar
40
30
20
10
0
2012
2013
2014
2015
Source : Nemertes 2015
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UCaaS Concerns and Barriers to Growth
67%
55%
Maintain Full Control
Security Risk
49%
46%
Tighter Integration
Higher Total Cost
of Ownership
Source: Frost and Sullivan
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UCaaS - Who Are the Players?
2014 Proforma for Acquisitions
2013
Total Revenue: $2.39B
Total Revenue: $1.59B
Vonage 6.6%
Public UCC Co 7.0%
7.6%
Public UCC Co 5.4%
Others 51.8%
6.8%
Public Tel Co 4.6%
4.6%
Public UC Co 3.3%
4.1%
Public UCC Co 3.3%
3.9%
62.8%
3.9%
Private UCC Co 2.8%
Private UC Co 2.5%
3.3%
3.0%
Private UCC Co 2.1%
Private UCC Co 2.0%
Public Cable Co 1.8%
Private UCC Co 1.5%
Source: Frost and Sullivan; represents total Hosted IP Telephony and UCC
Services market % revenue breakdown for North America (without access)
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Private UCC Co 1.6%
Private UCC Co 1.8%
Private UCC Co 1.8%
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The Future of UCaaS
•
What’s Hype?
•
What’s Real?
•
What are the Key Drivers of the Future of UCaaS?
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The Future – Gartner’s “Hype” Cycle
Source: Gartner Inc.
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The Future of UCaaS
Key Drivers of the Future of UCaaS
•
•
•
•
•
•
•
•
Content Becomes Centralized – The Cloud
Mobile First
BYOD movement
Big Broadband with QoS everywhere
Internet of Things
Voice Integration with Cloud SaaS
WebRTC
Vonage as a key leader defining the future of UCaaS
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Millennials are Now the Largest, Most Diverse Generation in the U.S.
Source: US Census Bureau
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Millennials as the Workforce
• Currently make up almost 40% of the workforce; that will increase to 75% by 2025
• 56% won’t work for a company that bans social media access
• 65% say losing their phone or PC would impact their lives more than losing their car
• 69% believe office attendance on a regular basis is unnecessary
• Average job tenure of 2 years vs. 5 years for Gen X and 7 years for Baby Boomers
• 46% want to start a business in the next 5 years
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Technology is Driving Business Transformation
Globalization
Data Explosion
Rise of Mobility
Internet saturation
growing at 8%
annually
4300% data
generation
increase by 2020
Smartphone
Shipments to top
1B annually by 2016
Social is
Business
Modernize to
Survive
13+ million
business
pages on Facebook
Productivity costs
Up 70-75% w/
legacy within
7years
Source: United Nations/International Telecommunications Union, internetworldstats.com, IDC/EMC 2011 Digital Universe Study,
2010 Digital Universe Decade Study, Data revolution Sept 2011, CSC’s Leading Edge Forum Portio Research Mobile Facebook 2012
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How the Times Have Changed
IT TOOK TELECOM
75 Years
IT TOOK CANDY CRUSH
1 Year
TO REACH
TO REACH
100M
100M
USERS
USERS
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Content Becomes Centralized – The Cloud
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Investment in the Cloud
45 Price Cuts
in 6 Years
Free Storage
with O365
Photos
Free
Spending
1.1 Billion
on Data
Centers
Spending
up 24% to
Run Cloud
Spent $2.35B
on
Infrastructure
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The Race to Zero
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Mobile First
• 2014 Inflexion Point –
At the end of 2014 the number of mobile-connected
Devices exceeded the world’s population
Devices/Humans
• Mobile-only offices
• UCaaS over VoLTE IP data world
• Tech leaders MVNO’s about data
• Integration of millions of Wi-Fi
hotspots and cell networks
Source: GSMA Intelligence/gizmodo.com
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BYOD
Percentage of businesses
• Only 5% Not planning for BYOD, this
ship has sailed
6%
5%
13%
• Enterprise Mobility Management
growth driven by a BYOD business
ecosystem
76%
Currently Support
• Collaboration between all apps on that
Planning to Support, Next 12 Months
mobile device becomes an opportunity
Considering, But No Specific Timeframe
Not Planning to Support
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Bridging Work and Home - BYOD
We All Have Digital Lifestyles Today
At Home
At Work On the Go
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Enterprises are “Consumerizing” Their Business
UC
Corporate
Productivity
mBank
Customer
Engagement
BYOD
mAuto
SaaS
mHealth
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Bandwidth is the new oil. But what does it fuel?
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“Ports” Have Changed
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Big Broadband with QoS Everywhere
• Bandwidth needs are going UP, shared broadband costs are coming down
• Private circuits and core NNIs still provide best quality and privacy guarantees and may
remain the first choice for mid and larger enterprises
• Technology to leverage two broadband connections to deliver true QoS
• Integration of millions of Wi-Fi hotspots with cellular, LTE, FMC - Wireless ubiquity
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Internet of Things
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It’s Not Just About People | Intelligent Device Interaction
New revenue opportunities and new
channels of interactions with
customers
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Global Internet Device Installed Base Forecast
• Widely-deployed WiFi, LTE, Big
Broadband connectivity enables
IoT growth
• Connected devices will grow
from $6B to $41B in 2020
• Gartner predicts incremental IoT
revenues of $300B in 2020
• How many newly-connected
devices will also need a voice?
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WebRTC
WebRTC on >6B Devices by 2019
• Look Ma, No App!
Million WebRTC devices, year-end
• The ability for any IP-connected device
with a browser to have a voice
• Operational readiness and support still
have work to be done
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Voice Integration with Cloud
• APIs, APIs, APIs…
• Make it simple to use the UCaaS applications by living in the customer’s ecosystem
• Extends the reach of the service provider into the desktop – opportunity to manage the LAN
• Vonage acquisition of GUnify
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UCaaS is a Space Looking For a Leader
Vonage
Visionary
2015 Gartner Magic Quadrant
• 36% 3Q 2015 organic revenue growth
• 514,000 business seats
• Over 30% of Vonage Business
revenue are customers over 50 seats
• Leading sales distribution platform
over multiple channles
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#1 BroadSoft-based
service provider
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Vonage Business Go-to-Market Strategy
Channel
Telesales
Product
&
Platform
Online
Indirect Channel
Vonage Essentials
Proprietary call processing platform
purpose built for SMBs
Enterprise Direct
Vonage Premier
BroadSoft-based enterprise-grade call
processing platform tailor made for midmarket and enterprise
The right platform and products to
serve customers from SMB to midmarket to enterprise
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Conclusion
• UCaaS will experience dramatic growth over next 6 years
• Millennials will be a driving force in the acceleration of UCaaS growth over decades
• Content will continue to centralize in the Cloud as data storage costs fall and wireline and
wireless access become larger and ubiquitous
• Collaboration between devices, apps, IoT, CRM’s create powerful new solutions
• Mobility and BYOD will change the game and bridge the business and personal spheres
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“The Future Ain’t What It Used To Be”
–Yogi Berra
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