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Remote Workers Fuel Unified Communications Demand

How agile organizations enable online communication and collaboration for their distributed workforce is top of mind for most senior executives today. More savvy CEOs, across all industries, have rapidly increased investments in IT systems and services that empower employees to work from anywhere.

The global unified communications & collaboration (UC&C) market grew 26.7 percent year-over-year and 6.6 percent quarter-over-quarter to $12.2 billion in the third quarter of 2020 (3Q20), according to the latest worldwide market study by International Data Corporation (IDC).

As enterprise leaders moved their teams from the crisis phase to the recovery phase, in response to the global COVID-19 pandemic, worldwide growth of UC&C applications was driven by organizations across all business types and sizes.

Unified Communications Market Development

The IDC study uncovered a special interest in cloud-based solutions for voice, video, messaging, and collaboration for driving initiatives such as digital transformation projects and the emergence of hybrid working models.

According to the IDC assessment, the increased IT vendor revenue, product shipment, and service subscriber numbers within these segments is proof. Rapid growth was pervasive across the board.

As an example, the UC Collaboration market -- including video conferencing software and cloud services -- increased 46.7 percent year-over-year and 5.3 percent over 2Q20 to reach almost $5.8 billion in revenue, with seats increasing 37.8 percent annually.

Additionally, the Hosted Voice and UC public cloud UCaaS market also did well and grew 23.3 percent year-over-year and 8.3 percent sequentially in 3Q 2020 to reach almost $4.3 billion in revenue.

Within enterprise videoconferencing Systems (video endpoints and infrastructure), traditional room-based video systems declined both 2.3 percent year-over-year and 6.9 percent sequentially.

Smaller huddle room video endpoints and video infrastructure equipment both experienced positive growth in the quarter (72.5 percent year-over-year and 16.8 percent over 2Q20) and (39.6 percent year-over-year and 21.6 percent quarter-over-quarter), respectively.

However, revenue for IP Phones declined both 32.9 percent compared to 3Q19 and 11 percent sequentially.

"In 2020, COVID-19 caused many businesses and organizations to re-think their plans for leveraging digital technologies and accelerated interest in and adoption of solutions such as collaboration, videoconferencing, messaging, and UC as a service (UCaaS), among others," said Rich Costello, senior research analyst at IDC.

Throughout 2021, IDC expects the positive upside growth numbers across these key UC&C segments to continue -- perhaps at slightly more modest rates. We'll have to wait and see.

Outlook for Unified Communications Application Growth

From a geographic perspective, the UC&C market again saw positive results across the globe in 3Q20. In North America (U.S. and Canada), UC&C revenue was up 6.3 percent sequentially and 27.7 percent over 3Q19.

Revenue in Asia-Pacific (including Japan) (APJ) was up 7.1 percent over 2Q20 and 27.7 percent year-over-year. EMEA revenue grew 6.6 percent sequentially and 24.2 percent annually, while Latin America revenue increased 7.2 percent quarter-over-quarter and 30.1 percent year-over-year.

Based on these impressive results, I anticipate that the demand for modern cloud-based communication and collaboration services will continue to gain market share from legacy on-premises systems. That said, enterprise networking -- and secure mobile broadband internet access in particular -- will be a key focal point for CIOs and CTO that must ensure that their corporate data and intellectual property is protected on all end-user devices.

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