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Microsoft, Zoom gain UCaaS market share

Business use of video conferencing during the pandemic caused a spike in UCaaS market growth in 2020. Analysts predict growth to continue at 20% as people return to work.

Microsoft and Zoom increased their shares of the unified communications as a service market in 2020 as workers turned to the companies' video conferencing services for business meetings during the pandemic.

According to Synergy Research Group, Microsoft and Zoom increased their market shares by almost 10 percentage points. At the same time, the number of global UCaaS subscribers grew 41% from 2019.

Microsoft's and Zoom's subscriber bases rose to about 1 million people each in 2020. The year before, both had a "negligible" market share in UCaaS, according to Synergy.

Market leader RingCentral stayed at a 20% market share in 2020. Cisco's and 8x8's shares fell, but both saw double-digit subscriber growth, albeit less than Microsoft and Zoom.

Graphic of UCaaS adoption rate and UCaaS market share
The number of UCaaS subscribers grew by 41% in 2020, with Microsoft and Zoom gaining substantial market share.

Synergy analyst Jeremy Duke said UCaaS adoption spiked during the pandemic, with businesses shifting their focus from UCaaS-based telephony to video conferencing.

"We are more video-first today, compared to earlier, which is partially fueling the growth of Teams' and Zoom's UCaaS business," Duke said.

Microsoft's growth was strong in the midmarket, while Zoom saw growth in large enterprises, according to Synergy.  

In its most recent Magic Quadrant, Gartner labeled 8x8, Cisco, Microsoft, RingCentral and Zoom as the leaders in the UCaaS market. But David Maldow, founder of market research firm Let's Do Video, said Cisco has been less innovative than Microsoft and Zoom.

"While all three platforms have developed in recent years … Webex is just not impressive anymore," Maldow said.

In 2020, Cisco made significant changes to its collaboration business, which includes Webex. Collaboration head Amy Chang took an indefinite leave of absence. Cisco placed senior vice president Sri Srinivasan in charge of the collaboration unit while folding it into the new security and applications group. The company later appointed Jeetu Patel as the group's senior vice president and general manager.

There were more than 15 million UCaaS subscribers globally in 2020, twice as many as in mid-2018, Synergy reported. Growth was strong in all regions of the world and fastest among large enterprises. 

Although subscriber growth will likely slow, it will stay at about 20% for the foreseeable future, Synergy said. Growth was 29% year to year in 2018 and 27% in 2019.

Maxim Tamarov is a news writer covering mobile and end-user computing. He previously wrote for The Daily News in Jacksonville, N.C., and the Sun Transcript in Winthrop, Mass. He graduated from Northeastern University with a degree in journalism. He can be found on Twitter at @MaximTamarov.

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