The State of Business Communications 2024 - Part One

Part One of our blog exploring the trends that will shape the business communications industry in 2024. Part Two is scheduled for release on Monday 15th January.

Introduction

In 2023, the business communications market continued an uninterrupted period of growth dating back to 2017, with cloud-based unified communications leading the way, and channel resellers expanding their product portfolios to meet increasingly complex customer needs.

In this blog we outline our expectations for 2024, from the outlook of the unified communications and CPaaS (Communications Platform as a Service) markets, to the key drivers for growth.

Key topics include the blurring lines between UCaaS and CCaaS, the shift to software-first solutions, the role of AI, the impact of the PSTN switch-off, and more.

Continued growth for the unified communications market

We expect that the market for unified communications will continue to grow in 2024, and beyond. Globally, the market is projected to reach an impressive US$55.3bn by 2028, growing from US$14.6bn in 2021, representing a remarkable CAGR of 20.4% during 2022-2028 (source: Precision Reports).

Data published by Gartner further supports the outlook for growth within the UC space, expecting that support of hybrid workplace policies will continue to accelerate the adoption and extension of unified communications as a service (UCaaS) initiatives through 2026.

Cloud-based solutions lead the way

More interestingly for solution vendors and providers, Gartner believes that specifically cloud-based UCaaS investment will yield a 9.4% CAGR from 2021 through 2026, fuelled by activity in mature markets – including the UK.

One of the driving forces behind the growth of the UC market is the persistent demand for all-in-one cloud-based solutions. As businesses continue to seek streamlined and efficient communication systems, cloud-based solutions offer a compelling alternative. The cost-effectiveness, scalability, and accessibility of cloud-based solutions make them particularly appealing across various business scales and industries.

Meanwhile, data recently released by IDC Research suggests that CPaaS (Communications Platform as a Service) will continue to be one of the fastest-growing technology sectors relating to business telecommunications over the next few years. IDC forecasts the global CPaaS market will grow from $14.3 billion in 2022 to $29.7 billion in 2026, which represents a CAGR of around 21% over a four-year period.

The emergence and growth of CPaaS meets demand for improved communication, interaction, and engagement with customers, with rising expectations from consumers. CPaaS solutions like CallSwitch One are cloud-based platforms that provide low code or no code tools including APIs and webhooks to allow businesses to develop bespoke communications systems including voice, SMS, and rich messaging with reduced costs, development requirements, and maintenance.

Educational gaps and opportunities

Despite the rising popularity of UC, there exists a considerable gap in understanding and adoption among potential customers. Many organizations are yet to grasp the full potential of UC in enhancing their communication capabilities.

This highlights the need for extensive education initiatives to bridge the knowledge gap and empower businesses to leverage UC to its fullest extent. We are focused on continuing to deliver long form educational content that supports our partners in delivering this education to customers.

The MSP opportunity from Microsoft Teams

Microsoft Teams remains a major player, wielding significant influence, particularly within larger, enterprise customers. The seamless integration of VoIP (Voice over Internet Protocol) services based on purpose-built solutions and infrastructure to enhance Teams offerings is a strategic move that sets apart Managed Service Providers (MSPs) who provide Teams as one of their solutions.

This integration not only enhances communication but also positions MSPs who are able to offer a converged service as leaders in the evolving UC landscape, making Teams an opportunity rather than a threat.

Blurring Lines between UCaaS and CCaaS

The lines between Unified Communications as a Service (UCaaS) and Contact Centre as a Service (CCaaS) will become increasingly blurred. Small and Medium Enterprises (SMEs) are recognising the value of CCaaS features, including analytics, reporting, wallboards, call recording, queuing, and advanced call routing. We expect UCaaS providers to invest in bringing these kinds of tools to their offerings.

Capturing and displaying data

Leading this blurring of lines is the increased demand by even small businesses to capture high quality call information through live wallboards, and scheduled reporting. SMEs are bound by the same consumer expectations including short wait times, clear call routing, and expecting to speak to someone on their terms. 

Central to ensuring these are measured as business KPIs and that data can be used to drive improvement, is capturing and displaying those data points, alongside ensuring calls are managed through queues, IVRs, and other call management tools. It therefore makes sense that these are increasingly being expected by businesses making UCaaS purchases.

Bringing omnichannel to UCaaS

In 2024 we believe omnichannel communication will begin expanding into UC solutions, with platforms like WhatsApp becoming integral parts of the business communications ecosystem. This shift reflects the growing need for businesses to connect with their audience seamlessly across various channels, providing a unified and consistent experience.

Streamlining communications

For larger organisations, we believe the blurring of UCaaS and CCaaS functionality will serve the purpose of further streamlining business communications. In many instances, businesses may implement multiple solutions to manage their communications, with purpose built CCaaS solutions predominantly for managing inbound customer calls and messages, and UCaaS enabling multi-channel internal collaboration and day-to-day external calls.

This can be simplified by enhancing reporting and wallboards, call queue functionality, and by introducing some omnichannel capabilities to a UCaaS platform, allowing businesses to meet both use-cases via a single solution, while offering a unified user experience.

Embracing a software-first approach

Business communications has integrated itself into the IT landscape, transforming from a traditional phone system solution to a cutting-edge software-first UC offering. This transition signifies a paradigm shift in how businesses approach communication technologies, unlocking new potentials and opportunities.

Building an integrated tech-stack

The shift of business communications to a part of the IT landscape is not only about adopting advanced communication tools but signifies a strategic move towards incorporating communication technologies within a broader tech-stack.

As businesses increasingly rely on sophisticated IT infrastructures, the integration of communication tools with other technologies becomes imperative for achieving operational efficiency and holistic business management.

The software-first approach to unified communications empowers IT managers to weave communication seamlessly into their integrated tech stacks. This entails enhanced cross-platform interoperability, allowing organizations to streamline processes, improve collaboration, and build more cohesive workflows across various tools and applications.

Key to delivering this is through an emphasis on offering seamless third-party integrations. Vendors are increasingly focusing on providing a wide array of SaaS integrations, ensuring compatibility with popular applications and platforms. We are focused on developing as many out-the-box integrations as possible for CallSwitch One, and this will continue in the next year.

Furthermore, the provision of public APIs enables businesses to build bespoke integrations and features tailored to their specific requirements. This flexibility is particularly beneficial for organizations operating in niche verticals, ensuring that their unique communication needs are met effectively.

Expanding portfolio opportunities for the channel

This paradigm shift also brings about significant advantages for resellers and MSPs looking to diversify their product portfolios. The software-first model opens up opportunities for the channel to offer a broader range of solutions, meeting the evolving needs of their clients.

As businesses seek more integrated and versatile communication solutions, resellers and MSPs can leverage the software-centric UC trend to deliver value-added services, fostering growth and client satisfaction.

In our recent partner community roundtable, Global4’s Technical Pre-sales Manager, John Sutherland told us “The line between telecoms and IT solutions has been blurring for a few years, and for most businesses they’re very much singular now.”

Ian Jamieson, CTO at Holler agreed, saying “This year we have doubled our growth, through branching into IT services such as desktop support. Offering that level of service is completely different, revenue-wise, profit-wise, everything… The market looks buoyant, but we've got to spread out resources, and you've got to spread that portfolio around. If you started a telecoms business 20 years ago, it was all about phone systems and call charges. Now we have no choice but to diversify.”

True SaaS platforms to forge ahead

In a recent blog, our Chief Marketing Officer, Simon Blackwell gave his thoughts on the future of UCaaS, writing that “the dynamic landscape of the UCaaS industry demands a strategic perspective when choosing a solution in an increasingly saturated market full of ‘me too’ solutions.”

He argued that unified communications is no longer a market driven by “only features and pricing but also the technical foundation and deployment methods” available to customers.

Regarding technical foundations, our view is that in a software-centric era of unified communications, vendors with proprietary IP are positioned to lead the way. The ability to innovate swiftly and adapt to changing market dynamics gives owned IP vendors a competitive edge.

On the contrary, Open-Source vendors face challenges in keeping pace with the rapid evolution of the UC landscape. Speed of development and deployment for new features is more critical than ever to meeting customer needs, and owned IP vendors are at the forefront of driving transformative changes in the industry.

In terms of deployment, we believe the future of unified communications lies in true SaaS (Software as a Service) solutions, particularly those hosted within global public cloud infrastructure. Businesses are leaning towards services that offer almost instant and globally accessible deployment. This not only ensures rapid implementation but also provides a scalable and reliable environment for communication tools. As organisations continue to embrace cloud technology, we expect demand for UC solutions hosted in global cloud infrastructure to rise exponentially.

Part Two of this blog is scheduled for release on Wednesday 17th January. Key trends for discussion will be the looming PSTN switch-off and its implications for MSPs, along with the expanding role of AI in unified communications.

To learn more about how CallSwitch One can support managed service providers of IT and telecommunications, check out our partnership opportunities, or read more of our reseller-focused blogs.