Here's Who Made Gartner's 2017 Magic Quadrant For Unified Communications As-A-Service
UCaaS Out-Weighing On-Premises UC
Unified Communications as-a-Service (UCaaS) capabilities now exceed those available from premises-based UC solutions, according to Gartner's 2017 Magic Quadrant for worldwide UCaaS.
The pace of UCaaS innovation is accelerating as vendors focus R&D resources and innovation on cloud delivery. Gartner said businesses are evaluating a fragmented UCaaS landscape to ensure that the provider matches their requirements. Although on-premises UC still accounts for roughly 70 percent of the offerings sold to midsize to large enterprise, UCaaS providers are expanding their capabilities to meet enterprise service needs.
The two architectures deployed in the UCaaS market is multitenant, in which customers share a common software instance; and multi-instance, where each customer receives its own software.
UCaaS Research Methodology
Gartner evaluated UCaaS vendors who offer solutions around VoIP, mobility, integrated conferencing – audio video and web – as well as IM/presence. Vendors must have offerings in North America, Europe and Asia/Pac, as well as the ability to support customers with more than 3,000 employees.
Gartner's Magic Quadrant ranks vendors on their ability to execute and completeness of vision and places them in four categories: Niche Players (low on vision and execution), Visionaries (good vision, but low execution), Challengers (good execution, but low vision) and Leaders (excelling in both vision and execution).
Here are the fifteen vendors that made this year's Magic Quadrant for worldwide UCaaS, along with Gartner's assessments of each company's strengths and weaknesses in the space.
Leader: RingCentral
The Belmont, Calif.-based application specialist has successfully expanded its SMB roots into the midmarket, enterprise and global accounts.
RingCentral uses an internally developed multitenant solution branded as RingCentral Office, with a rich UC suite that includes the full UCaaS stack, along with workstream collaboration for teams. The UCaaS software is being adapted to run in a microservice public cloud environment. Gartner said the vendor invests heavily in mass-market media branding such as radio, digital signage and sporting events. RingCentral is ranked No. 1 in vision on the Magic Quadrant, and No. 4 in execution.
RingCentral
Strengths: RingCentral is a top-tier UCaaS vendor in terms of both revenue growth and total number of UCaaS endpoints, with revenue increasing by more than 30 percent in 2016. The RingCentral Connect Platform has a strong set of APIs that includes integrations built by RingCentral to other cloud applications such as Salesforce Service Cloud.
Weaknesses: The vendor does not have strong brand-name recognition with larger enterprise accounts above 5,000 employees who favor major brands like Microsoft, Cisco and Google. RingCentral lacks a strong sales presence in Asia/Pacific.
Leader: Verizon
The New York-based global provider supports three UCaaS offerings, with sales primarily direct for enterprise accounts, while SMB sales are sold both direct and through channel partners in the U.S.
Verizon's flagship UCaaS offering, Verizon Unified Communications and Collaboration as a Service, is based on Cisco's Hosted Collaboration Solution (HCS) platform. Verizon's One Talk offers a single contract, mobile-first UCaaS service focused on the U.S. SMB market. The vendor's third option is based on the BroadSoft platform, dubbed Virtual Communications Express. Verizon is ranked No. 3 in execution on the Magic Quadrant and is in the middle of the pack in vision.
Verizon
Strengths: Verizon is well-positioned to complement UCaaS with related offerings in SIP trunks, carrier-grade networks, Contact Center as a service, wireless, security and managed services. Customers report that Verizon's pricing is competitive and that the UCaaS services are stable and reliable, with good voice quality once they are deployed.
Weaknesses: Cisco HCS installations can take longer than anticipated as customers work both through Verizon and Cisco resources for project management and implementation. Additionally, joint mobile and wireline services are only available in its core U.S. market.
Leader: 8x8
The San Jose, Calif.-based UCaaS application specialistaudio conferencingoffers Virtual Office delivered via its own multitenant platform, which 8x8 is in the process of porting to AWS IaaS. 8x8 also offers a cloud contact center solution branded as 8x8 Virtual Contact Center.
Gartner estimates that 8x8 is one of the largest UCaaS providers supporting more than 1 million users. The vendor has expanded significantly in the European market after two acquisitions of UK-headquartered companies.
8x8 is ranked No. 2 in vision and among the middle of the pack in execution on the Magic Quadrant.
8x8
Strengths: 8x8 users have high adoption rates for cloud telephony, UM, mobility, IM, presence and contact center. Recent innovations include an updated user interface, a quality of service (QoS) dashboard, native mobile dialing, a five-tier pricing plan, SD-WAN partnerships and a team messenger capability through its acquisition of the Sameroom this year.
Weaknesses: The company's Virtual Contact Center (VCC) and ContactNow offerings have lower brand awareness than 8x8's UCaaS solutions. VCC does not have its own workforce management offering, but 8x8 partners with Teleopti.
Leader: BT
BT's UCaaS offering is branded BT One Cloud, supporting both the Cisco HCS and Microsoft Sky for Business (SfB) stacks. The London-based company has significant UCaaS experience serving large multinational corporations and U.K. public-sector accounts.
BU also has two cloud contact center offerings based on Cisco HCS Enterprise and Enghouse. The BT One Collaborate portfolio includes audio conferencing, web conferencing and video conferencing capabilities. The company relies primarily on a direct sales force. BT is ranked No. 5 in execution and in the middle of the pack in vision on the Magic Quadrant.
BT
Strengths: Most customers purchase a bundle of complementary services, spanning contact center as a service, data networks, SIP trunking, Dolby audio, security, and managed services. Gartner said BT does a good job explaining the product portfolio and roadmap of its offerings. BT also has a deep base of skills in Cisco and Microsoft UCaaS stacks.
Weaknesses: BT can lag in upgrading its UCaaS product portfolio as new vendor releases are introduced, in part because of the broad product portfolio BT supports. The vendor does not aggressively pursue SMB accounts below 1,000 employees outside of Europe.
Leader: Orange Business Services
The Paris-based vendor offers two UCaaS services: its Cisco-based branded Business Together as a Service; and the Microsoft Skype-based, branded Business Together Microsoft. Both are based on a global private cloud configuration and are offered to midsize accounts through large multinational customers.
Orange deploys a reference architecture for its UCaaS offerings with a defined set of session border controllers, gateways, headsets, handsets, routers, video endpoints and switches. The vendor is ranked No. 5 in vision on the Magic Quadrant and among the middle of the pack in execution.
Orange Business Services
Strengths: Orange UCaaS services are available in more than 90 countries, with support for more than 30 languages. Orange enhanced its Cisco UCaaS competitive position by upgrading its Cisco HCS infrastructure and adding Cisco Spark functionality. It has also increased investment with Microsoft Skype.
Weaknesses: Customers report that Orange's rigorous processes result in slow deployment of new UC capabilities and long lead times to make changes. The vendor does not yet focus on complex deployments that include artificial intelligence and Communications Platform as a Service (cPaaS).
Leader: West
West Corp lead UCaaS offering branded as VoiceMaxx CE is based on the Cisco HCS platform. The Omaha, Neb.-based telecom service provider supports HCS CCaaS with its Cloud Contact CE, as well as its own CCaaS branded as Cloud Contact Pro.
West acquired the UCaaS business of Australia-based Vocus, a Cisco HCS partner, in 2017 to expand its Asia/Pacific footprint. The West UCaaS offering is complemented with adjacent services, including conferencing, 911/safety services, notification and networks.
In May, private equity firm Apollo global Management agreed to acquire West for a value of roughly $5.1 billion. West is ranked among the middle of the pack in both execution and vision on the Magic Quadrant.
West
Strengths: West has a strong Cisco UCaaS partnership with expertise across a range of Cisco offerings including HCS, Spark, Expressway and Contact Center Enterprise. Gartner said customers value West's willingness to integrate with their legacy environment and its system integrator mindset.
Weaknesses: The vendor is not a UCaaS technology innovator, according to Gartner, rather focusing on deploying proven vendor offerings complemented with West's project management and service delivery. West is also highly dependent on Cisco technology which possesses differentiation challenges.
Challenger: Microsoft
The Redmond, Wash.-based software giant offers Skype for Business Online (SfBO) UCaaS solution as part of its cloud IT Office 365 suite.
The SfBO UCaaS offering includes IM, presence, peer-to-peer voice and video, and screen sharing, as well as conferencing support for web, audio and video. Microsoft's SfBO offers PSTN calling in the U.S. and five European countries; an upgraded SfB Cloud Connector Edition for customers to connect to SfBO Cloud PBX; and Skype Meeting Broadcast for large meetings of up to 10,000 participants. Microsoft is ranked the leader in execution on the Magic Quadrant and among the middle of the pack in vision.
Microsoft
Strengths: SfBO continues to gain market momentum and market share, in large part because of the success of its broader Office 365 portfolio. Microsoft also provides extensive sales, marketing, technical and support resources to SfBO. The vendor has an extensive ecosystem of SfBO partners offering professional services, devices, applications, infrastructure and network services.
Weaknesses: The SfBO telephony capabilities lag behind most competing UCaaS offers, and Microsoft has been slow to advance this element of its portfolio. Microsoft recently introduced its Teams workstream collaboration product that has overlapping communications functionality redundant to Skype.
Challenger: Google
The Mountain View, Calif.-based cloud juggernaut's UCaaS offering Hangouts is part of its multitenant G-Suite office bundle that includes Gmail, Google Docs, Google Calendar, Google Sites and Google Drive.
Google has made numerous Hangouts updates in the past year, including the re-engineering of Hangouts across two web-based clients – Hangouts Meet and Hangouts Chat. Hangouts Meet supports audio conferencing, web conferencing, video conferencing and screen sharing. The new Hangouts Chat client is a workstream collaboration tool that supports team messaging, chat and file sharing. Google is ranked No. 2 in execution on the Magic Quadrant and among the middle of the pack in vision.
Strengths: Google's UCaaS offering has received numerous updates in the past year in terms of new clients, endpoints, user experience and dashboards, complemented with a solid roadmap. Hangouts Meet has improved audio quality, a cleaner browser client with no plug-ins, and a simpler guest access.
Weaknesses: The cloud giant does not support a native business voice service, which hurts Google's competitive positioning against other UCaaS providers. Hangouts supports only 30 simultaneous participants per meeting, with plans to increase to 50 by the fourth quarter of 2017.
Challenger: AT&T
The Dallas, Texas-based telecom giant has three cloud-based UCaaS offers, including AT&T Collaborate based on AT&T's Integrated Cloud architecture that leverages network function virtualization and software-defined networking (SDN) capabilities, commonly deployed as an OTT service. Collaborate is currently only in the U.S., but global expansion is slated for 2018.
AT&T also offers Cisco HCS hosted in its data centers as well as support for Cisco Spark. The third UC offer is Microsoft's Skype for Business Server, which can be deployed in a multi-instance or dedicated configuration. AT&T is ranked among the middle of the pack in execution on the Magic Quadrant, but near the bottom in vision.
AT&T
Strengths: AT&T Collaborate has expanded in the past year from pockets of the U.S. to a full country rollout with global markets on the way. The vendor's Integrated Cloud allows users to procure integrated routers, firewalls and WAN optimization. AT&T is strong across both the Cisco and Microsoft UCaaS stacks, while adding its internal functionality and professional services.
Weaknesses: AT&T's UCaaS portfolio is very broad and complex to manage spanning Cisco, Microsoft, BroadSoft, Genesys and BlueJeans. The diversity can result in six to twelve-month delays in upgrading platforms to new releases. The IT administration portals are English-only and not as intuitive as users would like, said Gartner.
Visionary: Fuze
In the first quarter of 2017, Boston-based Fuze received $134 million in venture funding to bolster its executive and customer service teams, with more than 50 percent of revenue from accounts above 1,000 employees.
Fuze uses a proprietary multitenant platform that includes open-standards-based web APIs to facilitate UC application integration. The vendor recently added a messaging platform that supports persistent chat and it increased its conferencing capacity from 250 to 1,000 participants. Fuze is ranked No. 3 in vision on the Magic Quadrant and among the middle of the pack in execution.
Fuze
Strengths: Fuze is expanding its UCaaS and related capabilities including analytics, workstream collaboration, customer identity graphs, and video -- complemented with a robust product roadmap, said Gartner. Many customers leverage the vendor to displace separate video conferencing and web conferencing offerings.
Weaknesses: The vendor deployments are often complex, require significant professional services and are difficult to scale. The brand awareness of Fuze remains low even in North America which places Fuze at a competitive disadvantage with larger enterprises.
Visionary: Mitel
Mitel, which is set to acquire ShoreTel, offers a broad set of cloud UC services with roots in premises-based PBX. Mitel channel partners account for 90 percent of sales.
Mitel's UCaaS solution is MiCloud which comes in two versions. MiCloud Enterprise is a multi-instance platform that uses the same software stack as Mitel's on-premises offering focused on midsize businesses of 250 employees or more. The enterprise offering can be delivered via public, private and hybrid deployments. For the lower end, there is Mitel's MiCloud Office multitenant platform. Mitel is ranked No. 4 in vision on the Magic Quadrant, but near the bottom in execution.
Mitel
Strengths: Mitel UCaaS is particularly well-suited to customers with existing Mitel on-premises infrastructure transitioning to the cloud while protecting the user handset investment as well as users seeking hybrid deployments. Many customers opt for Mitel because they can get an integrated, cost-effective Contact Center as a Service offering with UCaaS.
Weaknesses: Many customers focus on Mitel's core telephony and optional contact center capabilities. They view the portal and interfaces as dated, resulting in lower adoption of the full UC stack -- including mobile, web, video and workstream collaboration, according to Gartner. The vendor lacks strong brand recognition for business above 3,000 employees.
Visionary: BroadSoft
The Gaithersburg, Md.-based vendor markets its UCaaS BroadCloud platform to communications service providers, application specialists and enterprises.
BroadCloud offerings are sold primarily through channel partners who rebrand and package the solution with their own value-added functionality. The platform includes four modules: BroadSoft UC-One, which includes voice, mobility, web and video; BroadSoft Hub to integrate with numerous third-party cloud services like Google's G-Suite and Microsoft Office 365; BroadSoft Team-One, which offers enterprise messaging and team collaboration; and CC-One, its CCaaS offering. BroadSoft is ranked among the middle of the pack in vision on the Magic Quadrant, but near the bottom in execution.
BroadSoft
Strengths: BroadSoft and its channel partners have significant experience developing, deploying and working in the UCaaS market. Its multitenant platform is scalable, which enables BroadSoft to quickly add and subtract users. BroadSoft established partnerships globally provide BroadCloud with a broad range of infrastructure, networking options and market access.
Weaknesses: Many BroadCloud users focus on VoIP, with lower adoption of the richer mobile, web and video components. Users have cited BroadSoft portals as not being intuitive, although a new BroadCloud portal was just introduced to improve intuitiveness.
Niche Player: NTT Group
The Japan-based vendor's UCaaS portfolio comes from a combination of acquisitions over the years including Dimension Data and Arkadin. The three companies run as separate businesses units although they perform joint marketing, product management, planning and investment.
NTT's brands its UCaaS offering for large enterprises as Arcstar UCaaS, based on the Cisco HCS platform, complemented with SD-WAN, WAN and LAN services. Arkadin Total Connect targets midsize businesses with the Microsoft UC stack, complemented with Arkadin's conferencing services, and provides support to help customers transition to Microsoft Office 365. Dimension Data is a strong Cisco UC partner with skills in Microsoft Skype to provide services. NTT is ranked among the middle of the pack in execution on the Magic Quadrant, but near the bottom in vision.
NTT Group
Strengths: NTT collectively has a deep skill set in both the Cisco and Microsoft cloud UC stacks. It supports customers ranging from 100 employees to more than 50,000. The vendor has broad global coverage across complemented with UCaaS functionality spanning networks, security, contact center and managed services.
Weaknesses: The three units that comprise NTT's UCaaS are run separately, which limits the operational synergies that can be delivered. NTT does not provide significant value-added services such as analytics, bots, and artificial intelligence, on top of the core UC vendor offering stacks that it supports.
Niche Player: Masergy
New to the Magic Quadrant this year is Dallas, Texas-based Masergy which has recently added UCaaS to its portfolio as it operates eight UCaaS data centers throughout the U.S., Europe and Asia/Pac. The vendor relies primarily on channel partners.
The vendor's Global UCaaS offering is based on the BroadSoft platform that delivers the full span of UC functionality. Masergy's Cloud Contact Center solution includes omnichannel support, call recording, business analytics and integration to leading cloud applications such as Salesforce Service Cloud. Additionally, Masergy's UCaaS Analyst is a performance monitoring application that provides QoS reporting and visualization. Masergy is ranked near the bottom of the pack in both execution and vision on the Magic Quadrant.
Masergy
Strengths: Masergy has a focused strategy to combine network, UCaaS and security services to midsize enterprises with global footprints. Adding UCaaS to its network services has proven to be a successful decision, said Gartner. Its new SD-WAN offerings can be combined with UCaaS to reduce costs and complexity.
Weaknesses: Masergy is a smaller company compared to the other vendors on this list with limited UCaaS brand-name recognition. Few larger companies are aware of Masergy's UCaaS offering, with the company known primarily as a network provider.
Niche Player: Star2Star Communications
Sarasota, Fla.-based Star2Star delivers UCaaS via its proprietary multitenant platform with 100 percent of sales coming through the channel. The vendor's value proposition has been on price-sensitive customers looking for reliable, high-quality voice communications over broadband.
Star2Star's branded StarSystem is a UCaaS solution that delivers services in a hybrid cloud with on-premises configuration for high resiliency, or it can be offered entirely from the cloud. Star2Star's service also includes CRM integration into Salesforce Service Cloud and SugarCRM; a fax solution for PCs and mobile devices; and a desktop voice presence solution that provides call management features via drag and drop. Start2Start is ranked last place in both execution and vision on the Magic Quadrant.
Star2Star
Strengths: Star2Star's pricing is very competitive with a value proposition well-suited for organizations needing to support dozens or hundreds of sites. The vendor's customer satisfaction levels have increased over the years in such areas as technical support, installation and user experience.
Weaknesses: Star2Star is smaller than most other UCaaS providers in terms of revenue, number of employees and capital structure. The vendor is skewed to the North American market with limited service coverage and number of channels in Europe and Asia/Pacific.