Small firms exist in UCC, but Microsoft and Cisco have made the game all about acquisitions

Delta research, however, shows that customers are unhappy with the market leaders' hidden costs

The market leaders are bolstering their organic growth with acquisitions

Tom Allen
01 May 2019

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As the unified communications market moves away from on-premise installations and towards the cloud, smaller vendors have their chance to make a name for themselves in a rapidly growing space. However, despite the expansion of the industry, the number of vendors continues to fall.

Although M&A is part of any healthy industry, extreme levels of acquisitions have been a hallmark of the UC market for at least the past five years.

The market's dominant vendors, Cisco and Microsoft, are using acquisitions to supplement their organic growth, forcing a response from traditional PBX companies like Mitel, Avaya and Alcatel Lucent. This M&A movement is not limited to startups, but large established companies as well; Cisco's acquisition of Broadsoft last year is one such example.

These acquisitions have led to vendors merging legacy systems from purchased companies into their own products, often by redesigning the acquired platform to fit the existing branding and user experience.

According to research by Delta - the new market intelligence service from Computing - Microsoft and Cisco dominate market awareness among end users, which is unsurprising considering the companies' size and reach: everyone in IT uses Microsoft PCs and Cisco switches. "Of course we're going to gravitate towards those things," said one IT leader.

Vendor	Awareness
Microsoft	78%
Cisco	78%
Google	51%
Avaya	50%
Vodafone	47%
Mitel	44%
LogMeIn	36%
Alcatel-Lucent	35%
Huawei	29%
Unify	24%

Source: Delta

Here we specifically asked about UC solutions, and so other technology giants like Google - whose Hangouts product is not widely used in the enterprise - scored much lower than the leading vendors.

The awareness tail-off after Microsoft and Cisco is sharp, turning into a steady decline as ‘household names' like Google and Avaya give way to niche and non-EU players like NEC, 3CX and 8x8.

Avaya, Mitel and Alcatel-Lucent are all to one extent or another still PBX vendors, which was the original basis of unified communications, and so it is unsurprising to see them in the top 10 for awareness - even as they are also perceived as falling behind the competition.

Which of these vendor solutions have you trialled, evaluated (i.e. hands-on practical experience) or used operationally? Choose up to three.

Source: Delta

The position of companies trialled almost exactly matches their awareness, with Microsoft, Cisco, Avaya and Google taking the top four spots among UK end users.

Leading vendors

UC leadership sees an interesting split between Microsoft, a traditional software vendor, and Cisco, a traditional hardware vendor. The lines between these two areas are increasingly blurred, with both able to supply compelling products in the other's historic area of strength.

Source: Delta

Microsoft is particularly strong in the hybrid space, with excellent integrations between its products whether they are in the cloud or on-prem. Cisco's products, on the other hand, are described as reliable and particularly well-suited to legacy hardware customers. Cisco also offers a "massive" choice - although its products are more expensive than the competition.

An IT director in the leisure sector told Delta: "Cisco, I think they've just got an amazing range, you know? If you want to buy a Cisco product you can pay anything from really very little for a basic product through to an absolute fortune for all the bells and whistles and yes, relative to some other vendors they are a bit more expensive but you do have that massive choice…

"[Microsoft] are constantly dropping things and breaking things, but I think overall they are actually getting more cloud software subscription enabled, which is helping their revenues a lot. They're also really good at hybrid, where you can have some on-premise and some in the cloud and it will just work, whereas so many other vendors, getting it to work is such a pain. That's why I think they're at the top and leading."

Customer support and cost elements are some of the most important factors when it comes to choosing a UC vendor, according to Delta research. They are particularly interested in hidden costs, where the leading players performed poorly.

Four vendors (3CX, Shoretel, Alcatel-Lucent and RingCentral) had a low sample size in the following chart.

End-user satisfaction with UC vendors' hidden costs

Notes: Net ratings are the sum of 'high' (6 & 7 out of 7) ratings less the sum of 'low' (1, 2 & 3 out of 7) ratings. Source: Delta

Falling vendors

In contrast with the leading vendors, the split is much more even amongst those perceived as falling. Avaya is the ‘big loser' - although only two percentage points ahead of Google - due to its reliance on traditional PBX; end users see the company's UCC platform as an addon app, rather than a standalone product. With the market moving away from hardware, companies without a strong (or any) SaaS proposition will struggle.

A technology manager in the retail sector said, "It's because [Avaya] aren't offering software solutions - it's all based on their hardware, and it's all purchasing very expensive pieces of phone kit and then the other...more software-related products."

alt='' Source: Delta

Even ‘born-in-the-cloud' companies can struggle if their product is not convincing, however. Customers say that Google Hangouts is "difficult to use" and has "never really been sold as an enterprise [solution]," with UCC far from Google's core market. Several drew parallels to Google Plus in the lack of product support.

Respondents also highlighted issues around a lack of trust and transparency, which are of serious importance in the age of the GDPR. A CIO in the education sector said:

"Google don't yet provide assurances around the location of their data centres and therefore where your data is stored, and so there's a risk for them around GDPR. The other problem with Google is this issue of security, [though] it's not widely documented… I'm aware of FTSE-scale organisations who have used Google and have suffered security issues with their system that Google have hushed up and it hasn't gone into the public domain…"

The UC space is mature, and the trend towards consolidation signals a strong - if fragmented - market. Nearly 80 per cent of vendors support multiple products, with high cross-pollination between them.

The splintered nature of the UC industry makes it important to have a solid understanding of the vendors, solutions and trends that are growing or falling in importance at any one time: an understanding that can only come from Delta.

Delta is a new market intelligence service from Computing, designed to help CIOs and other IT decision makers make smarter purchasing decisions - informed by the knowledge and experience of other CIOs and IT decision makers.

By signing up to Delta, subscribers can access a swathe of relevant facts and interactive figures: a real deep-dive into the areas that they are interested in, including unified communications; customer relationship management; and cloud IaaS and PaaS.

On top of the actionable information, subscribers can connect to a peer who has solved a similar challenge; ask questions of the report authors; and run their company through our benchmarking tool to see how their IT estate compares to other firms.

Delta is free from vendor sponsorship or influence of any kind and is guided by a steering committee of well-known CIOs, such as Charles Ewen (Met Office), Christina Scott (News UK), Steve Capper (Royal BAM Group) and Laura Meyer (HarperCollins).

Delta covers 10 crucial technology areas at launch, with more added regularly. Sign-up here for your free demo of Delta.