Fragmented $45b collaboration market growth driven by cloud

08 Feb 2019

“Collaboration continues to be a somewhat fragmented market with many disruptive and high-growth companies targeting specific technology areas,” said Jeremy Duke, Synergy Research Group’s founder and chief analyst.

Coinciding with this assessment is the latest Synergy Research Group report which forecasts the total collaboration market to reach over $45 billion, up 9% from 2018 levels, driven by a group of high-growth hosted & cloud collaboration market segments.

Total worldwide Q3 revenues from collaboration – which include a range of both on-premise products and hosted/cloud communications and applications – were just shy of $11 billion and Q4 revenues will be substantially higher.

Revenues from hosted/cloud solutions now account for 64% of the total and on-premise products 36%, a marked change from twelve quarters ago when the market was split evenly between the two. North America continues to account for just over half of the total market and the EMEA region just under a third.

Figure 1: UC Collaboration market

Source: Synergy Research Group 2019

“That being said, the overall trend is quite clear in that traditional on-premise sales are shrinking and being replaced by cloud-based communication services. There is now wide adoption of these new emerging cloud services and our forecasts show that they will continue to grow strongly over the next five years,” concluded Duke.

TeamWork Apps will be the highest growth market, up by almost 60% in 2019, while CPaaS and VaaS will each grow by around 30%, with UCaaS and CCaaS being the next highest growth markets. In aggregate, total hosted & cloud collaboration markets will grow by 19% in 2019 while revenue from on-premise products will decline by 3%.

Quarterly vendor revenues from collaboration are projected to grow steadily over the next five years. Cisco maintained its lead in the total collaboration market with Microsoft a distant second. Beyond these leaders, the vendors who are growing the most rapidly include Slack, twilio, BroadCloud (Cisco), Zoom, Fuze, Dropbox, RingCentral and LogMeIn (Jive) – companies that are leading the charge in the high-growth segments. Notable performer is Slack which more than doubled in size year over year.

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