Unified Communication as a Service (UCaaS) is gradually gaining ground as an emerging network standard driven by growth of the cloud business model as an affordable, scalable and easy-to-deploy unified collaboration communications strategy.
UCaaS is of utmost importance to large enterprises for cost control. Business houses are increasingly restricting travel budgets as cost-control measures. This makes high-definition telepresence solutions a cost-induced alternative in an increasingly interactive world. Major videoconferencing equipment makers are currently moving from hardware-centric to software-centric solutions offering cloud-based managed videoconferencing services.
Per a report by Synergy Research, the UCaaS market is rapidly approaching $2 billion annually. The overall UCaaS market is flourishing around 29% per annum. The retail UCaaS market currently commands 80% of the total while the enterprise UCaaS market holds the remaining 20%. However, the enterprise UCaaS market is growing at 45% per annum. At present, the United States accounts for nearly 81% of the global UCaaS market followed by the United Kingdom and Germany.
We believe that in the long-run UCaaS solutions market will see healthy demand from several positive industry trends, including globalization and proliferation of branch offices, concerns about time demand and high cost of travel, homeland security and other government initiatives, as well as distance learning and healthcare applications.
An improving global economy is allowing several business enterprises to invest heavily on network infrastructure developments required to sustain huge bandwidth-consuming data. UCaaS is one such application. Rapid growth of high-speed fiber-based broadband networks is an indication that the UCaaS market will be able to continue its current momentum in the long run.
Major UCaaS players are RingCentral Inc. RNG , 8x8 Inc. EGHT , Mitel Networks, BroadSoft Inc. BSFT and Vonage Holdings Corp. VG . Except Mitel, all stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
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