Here's Who Made Gartner's 2016 Magic Quadrant For Unified Communications As A Service
UCaaS Becoming Mainstream
The Unified Communications as a Service market is transitioning from the early adopter period into the early mainstream phase for enterprise delivery, according to research firm Gartner, with many UCaaS providers now supporting global deployments.
UCaaS supports the same functions as its premise-based unified communications counterpart, although UCaaS follows a cloud service delivery model. As the UCaaS market grows faster than the general UC market, vendors are investing in cloud-based conferencing, voice and telephony, messaging and communications applications.
Sixteen vendors made Gartner's 2016 worldwide Magic Quadrant for UCaaS including IT giants like Microsoft and Google as well as specialized vendors 8x8 and RingCentral.
UCaaS Research Methodology
Gartner evaluated vendors that have leading global UCaaS platforms and have developed their own UCaaS application stack. Vendors must design, build, upgrade, support and operate the UCaaS platform with the provider selling services directly or through channels. Other vendors included needed to be a global service provider or systems integrator selling UCaaS based on a third-party platform.
Vendors that made the quadrant needed to have the ability to provide services in the three regions of North America, Europe and Asia-Pacific. Support for other global regions like Latin America, the Middle East and Africa is considered a favorable asset but not needed.
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).
Leader: RingCentral
Application specialist RingCentral is the top UCaaS provider in terms of revenue, supported endpoints and number of UCaaS employees, according to Gartner. The Belmont, Calif.-based company uses an internally developed, multitenant offering, RingCentral Office, with a rich UC suite. RingCentral recently added a workstream collaboration capability to its UCaaS suite through its 2015 acquisition of Glip, a cloud messaging and collaboration company.
The company told CRN earlier this year it was making its biggest charge ever into the enterprise market this year by forming a new partnership with Avant Communications and Google. RingCentral is the No. 1 leader for vision on the Magic Quadrant and ranks among the middle of the pack for execution.
RingCentral
Strengths: RingCentral has a strong internal sales force complete with web sales, in-region sales and support for channel partners, while recently adding a team focused on sales for large organizations above 10,000 employees, according to Gartner. The company's large service provider partners such as AT&T and BT are helping accelerate RingCentral's market share and entrance into new global regions.
Weaknesses: Gartner said RingCentral lacks strong brand awareness for businesses with more than 3,000 employees who favor larger brands such as Cisco, Microsoft and Google. The company is also not widely available across European and Asia-Pacific regions.
Leader: 8x8
San Jose, Calif.-based 8x8 is a longtime player in the UCaaS market with offerings including Virtual Office, delivered through its own multitenant platform, and a cloud-based Virtual Contact Center solution. In the past year, 8x8 has increased its contact center, meetings and video functionality -- supporting more than 700,000 users, according to Gartner.
Although 8x8 has historically focused on the SMB market, Gartner said the company is now winning enterprise accounts. The company ranks No. 2 in vision and among the middle of the pack for execution on the Magic Quadrant.
8x8
Strengths: 8x8 is continuing to expand its global capacity and project management capabilities to enhance support for multinational enterprise customers. The company is also expanding its virtual contact center abilities while integrating them with its cloud-based UC offerings.
Weaknesses: The vendor's Virtual Office Meetings lacks integration with third-party video platforms and has limited group tools for larger web conferences. 8x8's customer service isn't strong outside of its core North American and U.K. markets, according to Gartner.
Leader: BT
The London-based global service provider's UCaaS offering, BT One Cloud, supports both Cisco Hosted Collaboration Solution (HCS) and Microsoft Skype for Businesses (SfB). BT has significant UCaaS experience in large multinational corporations with dual data centers in Europe, North American and Asia-Pacific, as well as a cloud contact center offering based on Cisco HSC, according to Gartner.
The company relies primarily on a direct sales force. BT is ranked No. 3 in execution on the Magic Quadrant and among the middle of the pack for vision.
BT
Strengths: BT is a strong global Cisco UCaaS supporter utilizing numerous offerings from the networking giant, mainly using an internal team for professional services. The company has had several enterprise UCaaS wins above 5,000 employees in the past year with both Cisco and Microsoft UCaaS.
Weaknesses: The company does not pursue SMB accounts below 1,000 employees outside Europe. Gartner said BT customers report the need to improve its UCaaS self-service portal capabilities and offer more APIs for cloud applications.
Leader: Fuze
The privately held Cambridge, Mass.-based UCaaS provider uses a proprietary multitenant platform that includes open standards-based web APIs to allow UC application integration. Fuze was formerly known as ThinkingPhones before acquiring video provider Fuze in late 2015. More than 50 percent of the company's revenue comes from enterprise accounts of more than 1,000 employees, according to Gartner.
Fuze leads with a direct sales force and internal professional services staff. The company ranks No. 3 in vision on the Magic Quadrant and among the middle of the pack for execution.
Fuze
Strengths: ThinkingPhones' merger with videoconferencing specialist Fuze has significantly enhanced its video, web, screen sharing and audioconferencing capabilities. Gartner said Fuze has a strong innovation engine of new capabilities spanning analytics, workstream collaboration, enhanced portals and the newly acquired video offering.
Weaknesses: Fuze's business model is based on large complex deals using internal staffing that makes it difficult to scale the business, said Gartner. Fuze also runs into resource limitations which, combined with its English-only IT admin portal, reduces its ability to respond to some market opportunities.
Leader: West Corporation
Telecommunications service provider West Corporation provides its VoiceMaxx CE UCaaS offering based on Cisco's HCS platform. Omaha, Neb.-based West acquired contact center specialist Magnetic North, based in the U.K., last year to lead its Contact Center-as-a-Service offering, which supports Cisco Contact Center Enterprise for complex requirements.
Gartner said West is a well-established UCaaS provider for midsize enterprises in the 500- to 5,000-employee range. West ranks among the middle of the pack for both execution and vision on the Magic Quadrant.
West
Strengths: West is typically one of the first Cisco strategic partners to deploy a new Cisco offering ranging from HCS to Cisco Spark. Customers said West's tools, process, experience and infrastructure consistently deliver a solid UCaaS solution, according to Gartner.
Weaknesses: Gartner said West has overlapping cloud communications solutions centered around Cisco, Microsoft and its own proprietary platforms. The company is weak in supporting advanced UCaaS capabilities such as analytics, workstream collaboration and business process integration, according to the research firm.
Challengers: Microsoft
Microsoft's Skype for Business Online (SfBO) UCaaS solution is gaining market share and momentum, according to Gartner. The solution is part of Microsoft's cloud IT Office 365 offering, which is available in more than 140 counties and supports more than 100 languages. The UCaaS offering includes messaging, presence, peer-to-peer voice and video, along with support for web, audio and videoconferencing.
Earlier this year, Redmond, Wash.-based Microsoft acquired Event Zero to enhance performance management and provisioning capabilities for SfBO. Microsoft is the No.1 leader for execution on the Magic Quadrant and among the middle of the pack for vision.
Microsoft
Strengths: Microsoft is aggressively expanding its public switched telephone network (PSTN) and conferencing capabilities of SfBO, which Gartner said will lead to a complete cloud-native UCaaS solution. The company has an extensive ecosystem of SfBO partners that offer professional services, devices, applications, infrastructure and network services.
Weaknesses: SfBO's telephony capabilities "lag considerably" behind most competing UCaaS offers, said Gartner. In addition, Microsoft does not support an open SfBO API ecosystem, which Gartner said makes it impossible to replicate what can be supported in SfB Server partner solutions.
Challengers: Google
Google's UCaaS offering, Hangouts, is part of the company's IT collaboration suite Google Apps for Work. The company's UCaaS infrastructure spans 15 data centers in North America, Europe, Asia-Pacific and Latin America. The Mountain View, Calif.-based internet giant has a multitenant cloud service supporting functions such as VoIP, messaging, video and web conferencing, email and mobility.
Google has both a direct sales force and channel partners for securing new accounts. The company is ranked No. 2 for execution on the Magic Quadrant and ranks among the bottom of the pack for vision.
Strengths: Google's pricing is competitive and transparent, with annual fees ranging from $50 to $120 per user, according to Gartner. In 2016, Google UCaaS enhancements included a greater mix of Chromebox for meetings endpoints, WebRTC video efficiency improvements and an increased number of Hangout sessions from 15 to 25.
Weaknesses: Google doesn't support native business voice services, which hurts Google's position against Microsoft. Gartner said customers express dissatisfaction with the lack of native interoperability between Chromebox for meetings and standards-based video platforms, as well as complexity in connecting Chromebox for meeting with Hangouts On Air.
Challengers: Verizon
The New York-based global service provider supports two UCaaS offerings, with the lead based on Cisco's HCS platform. Verizon has a strong partnership with Cisco and combines marketing teams for UCaaS worldwide. UCaaS also supports integrated Cisco cloud UC offerings such as WebEx and Spark.
Verizon's second UCaaS offering is its Virtual Communications Express based on BroadSoft's multitenant platform with most of these customers in the SMB market. The company is ranked No. 4 for execution and among the middle of the pack for vision on the Magic Quadrant.
Verizon
Strengths: Verizon is rolling out "innovative" joint mobile and wireline services in the U.S. that are packaged with both the cloud BroadSoft and Cisco UC solutions, said Gartner. Due to its large size and footprint, Verizon is well-positioned to complement UCaaS with related offerings in SIP trunks, Contact Center as a Service, wireless, security and managed, professional and data center services.
Weaknesses: The company hasn't made a significant investment around Microsoft's UCaaS solutions, believing that the Cisco and BroadSoft platforms are better for integrating its mobile, wireline and IT solutions, according to Gartner. Companies with fewer than 3,000 employees say it can be difficult to work through Verizon's various delivery groups such as sales, installation and customer service.
Challengers: AT&T
AT&T Collaborate is the company's new UCaaS solution that leverages a network function virtualization (NFV) or software-defined networking (SDN) environment. The offering initially is being sold in the U.S. only, but AT&T said it will be launched globally in 2017.
The second AT&T cloud offering is based on Cisco HCS with data centers in North America, Europe and Asia-Pacific. The Dallas-based company also supports managed Microsoft SfB offerings as well as services for Cisco and Avaya's UC offerings. AT&T is ranked No. 5 for execution and among the middle of the pack in vision on the Magic Quadrant.
AT&T
Strengths: AT&T's UCaaS offering benefits from the company's strong brand recognition, global networks, security services and global data centers. AT&T has extensive conferencing capabilities that include Cisco WebEx and Collaboration Meeting Rooms, its own global IP audioconferencing, AT&T Video Meetings with BlueJeans Network, and audio support for Microsoft SfB.
Weaknesses: The company can be slow in rolling out new cloud UC technology that needs to be integrated with all of its back-end systems, according to Gartner. AT&T's broad array of offerings can be difficult to understand due to elements of UC functionality and underlying network services being bundled in multiple ways to support various customer requirements.
Challengers: NTT Communications
NTT Communications has combined its UCaaS capabilities with Arkadin, which NTT acquired in 2014, focused on providing foundational UCaaS services by leveraging proven vendor platforms, according to Gartner. Its Arcstar UCaaS solution for large enterprises are based on Cisco's HCS platform, complemented with NTT's software-defined WAN, LAN and services. NTT primarily uses a direct sales model for its larger accounts.
The Arkadin Total Connect UCaaS offering targets midsize businesses with the Microsoft UC stack, with Arkadin's conferencing services added. NTT is ranked among the middle of the pack for execution on the Magic Quadrant and near the bottom for vision.
NTT
Strengths: Japan-based NTT has strong capabilities across the Cisco UCaaS stack and a proven ability to support large enterprises above 20,000 employees, according to Gartner. Arkadin is strong across the Microsoft SfB stack while also offering a broad mix of audio, web and video conferencing capabilities through its own technology and strategic partners like Vidyo and BlueJeans Network.
Weaknesses: NTT and Arkadin business units are run separately without significant synergies between the two, said Gartner. NTT's brand recognition is low outside Asia-Pacific with regional staff concentrated in selected large markets in North America and Europe.
Visionary: Orange Business Services
The Paris-based global service provider owns Business Together as a Service, a UCaaS offering that can be delivered through Cisco's HCS infrastructure or Microsoft's private cloud SfB. Orange deploys a reference architecture for its UCaaS offerings with a defined set of gateways, routers, video endpoints, headsets and switches, with UCaaS data centers spanning North America, Europe and Asia-Pacific.
Business Together as a Service is primarily sold through direct sales. Orange ranks No. 4 for vision and among the middle of the pack in execution on the Magic Quadrant.
Orange Business Services
Strengths: Orange has enhanced its Cisco UCaaS position by upgrading to Cisco HCS 10 while also promoting Cisco Spark. The company has built APIs to integrate its Jive Software collaboration tool with UCaaS to enable a mix of collaboration and business social capabilities to improve business efficiency, according to Gartner.
Weaknesses: The company's long-term position supporting the Microsoft UC stack is threatened by Microsoft's focus to internally support UCaaS as part of Office 365. Gartner said Orange also doesn't target complex deployments, such as analytics and business operational improvement, but instead focuses on delivering services through the Cisco and Microsoft UC stacks.
Visionary: Mitel
Mitel provides a multitenant UCaaS offering for SMB customers, MiCloud Office, as well as a cloud offering for enterprises -- the MiCloud Enterprise. MiCloud key elements include telephony, collaboration and contact center, which can all be delivered through public, private and hybrid deployments. Mitel's global service offerings comprise 14 regional data centers operated by Mitel, while its approximately 2,500 channel partners focus on sales, customer service and technical support.
The Ottawa, Canada-based company recently introduced MiTeam, a workstream collaboration offering that integrates with its MiCollab suite. Mitel is ranked No. 5 for vision on the Magic Quadrant and among the middle of the pack for execution.
Mitel
Strengths: Mitel continues to expand its market presence in Europe with cloud services now supported by data centers in Germany, France and the U.K., while also building out its cloud channel in Asia. Its Open Integration Gateway supports integration with Salesforce, FieldAware, SugarCRM, Google, Microsoft, NetSuite and Zoho as well as custom integration that enable vertical solutions.
Weaknesses: Mitel's UCaaS brand doesn't resonate well in the enterprise market, particularly for businesses above 3,000 employees. Gartner said it is concerned about the company's capacity to support its expanded portfolio after years of cloud acquisitions and new products launches while at the same time supporting on-premises UC.
Visionary: Vonage
Vonage has acquired and integrated several UCaaS-related vendors over the past three years including Vocalocity, Telesphere, SimpleSignal, gUnify, iCore Networks and most recently Nexmo for $230 million. The Holmdel, N.J.-based company's cloud UC offering is a combination of the BroadSoft platform and Vonage's capabilities such as its Zeus self-service portal, SD-WAN, video bridging, Microsoft Skype integration, and gUnify APIs.
The majority of its customers have fewer than 1,000 employees within its core market in North America. Vonage is ranked among the middle of the pack for vision and near the bottom of the Magic Quadrant in execution.
Vonage
Strengths: Vonage's management team has proven its ability to successfully acquire then integrate UCaaS assets, said Gartner. The company is continuing to expand its functionality led by its new SD-WAN capability and APIs for cloud services through gUnify technology.
Weaknesses: Many of the company's customers are VoIP-focused and do not use the full Vonage UC offering. Vonage also doesn't possess a native contact center as a service offering, while coverage in Europe and Asia-Pacific is still maturing.
Niche Players: Interoute
The London-based service provider has expanded its core business of enterprise voice and data network services into the data center and UCaaS space. Its UC offering is based on Interoute One, a set of services offering voice, conferencing and collaboration, various Microsoft Skype configurations, contact center capabilities and video services – which are all complemented by Interoute's SIP-based global Virtual Voice Network.
Interoute's data centers across Europe, North America and Asia-Pacific offer localized data sovereignty. The company ranks among the middle of the pack for vision and near the bottom of the Magic Quadrant for execution.
Interoute
Strengths: Interoute focuses on Microsoft technology with an infrastructure as a service UCaaS approach that is scalable and flexible, according to Gartner. The vendor acquired Easynet in late 2015 -- gaining expanded customer operations support including project managers, technical support staff and additional employees in the Americas and Asia-Pacific.
Weaknesses: In terms of revenue and its approximately 2,300 employees, Interoute is smaller than many of its competitors such as BT, Orange and Vodafone, with limited financial assets to expand in the North American market. The company's account base, personnel and brand recognition is also geared toward Europe.
Niche Players: ShoreTel
ShoreTel's new cloud platform, Connect Cloud, draws from its existing on-premise UC distributed architecture, enabling the same software to be used in on-premises, cloud or hybrid configurations. The company acquired contact center specialist Corvisa in December to provide a richer set of multimedia capabilities and APIs.
Sunnyvale, Calif.-based ShoreTel sells its UCaaS solutions both directly and through channel partners in North America, while customers in Europe and Asia-Pacific get services primarily through the channel. ShoreTel is ranked near the bottom for both vision and execution on the Magic Quadrant.
ShoreTel
Strengths: ShoreTel continues to expand, train and incentivize its UCaaS sales distribution base to promote the new Connect Cloud offering. Gartner said ShoreTel customers report improvements in Connect Cloud over the legacy ShoreTel Sky in areas such as desktop client, portals, ease of use and in hybrid environments.
Weaknesses: The majority of Connect Cloud customers are SMBs. In order to succeed in the enterprise UCaaS market, Gartner said ShoreTel needs a stronger base of midsize enterprises, which is a challenge given that many competitors have greater resources. In addition, ShoreTel's video offering does not provide multiparty conferencing or interoperability with third-party solutions such as from Polycom and Cisco.
Niche Players: Star2Star
Star2Star's UCaaS offering is optimized for organizations with multiple distributed sites, providing technology designed to support sites connected by broadband connectivity in rural markets. The Sarasota, Fla.-based company's architecture combines centralized multitenant UCaaS with an appliance installed at each site. If the WAN connection becomes unavailable, the StarBox continues to provide full functionality.
Sales through Star2Star are exclusively through channel partners. The company ranks last in both execution and vision on the Magic Quadrant.
Star2Star
Strengths: Gartner said Star2Star is well-suited for SMBs with multiple sites looking for cost-effective UCaaS solutions centered on PBX replacement as well as large retail deployments that are VoIP-centric. The company has found its niche with distributed environments and it continues to experience market and revenue growth, according to Gartner.
Weaknesses: Star2Star has limited brand recognition, resources and visibility compared to its competitors. Its UC feature set is limited compared to the leading UCaaS vendors, such as not supporting screen sharing or providing a native video integration with third-party video endpoints including Cisco and Polycom.
Notable Mentions
Otherwise strong UCaaS vendors were not included in this quadrant because of insufficient global coverage, according to Gartner. These notable UCaaS players are Alcatel-Lucent Enterprise, CenturyLink, Comcast, Fonailty, Jive Communications, Masergy, Tata Communications, Telefonica, Telstra and Vodafone.