cloud

Covid-19 boosts shift to hosted and cloud collaboration solutions

28 September 2020 | Abigail Opiah

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Spending on UC collaboration tools grew 7% from the second quarter of 2019, reaching over $12 billion, according to new Q2 data from Synergy Research Group.

The data also showed that spending on hosted and cloud solutions grew by 18% while spending on on-premise products declined by 18%.

Hosted and cloud solutions now account for over three-quarters of the market, and while most hosted and cloud segments are expanding, growth was strong in teams SaaS, conferencing SaaS and CPaaS, Synergy revealed.

As a result Zoom, Twilio, Vonage and Slack all now feature in the top ten rankings of collaboration vendors.

Within on-premise products, the largest segments are IP telephony, video conferencing, on-premise email and content management.

While total on-premise spending is in decline, there was at least some growth seen in video conferencing equipment.

The highest growth segments in hosted and cloud solutions were teams, conferencing and CPaaS, but the largest segments remain hosted PBX & UCaaS, hosted contact centre and hosted/cloud email.

“We were already seeing a steady migration in the collaboration market away from on-premise products and towards cloud solutions,” said Jeremy Duke, Synergy Research Group’s founder and Chief Analyst.

“COVID-19 and the sudden radical change in working practices has resulted in an acceleration of that transition.

“CIOs need to find ways of maintaining communications and productivity in a world where remote working is the new norm and offices are sparsely populated. This is a world for which hosted and cloud solutions are perfectly suited.”

In March, Microsoft (NASDAQ: MSFT) announced that its group-collaboration platform, Microsoft Teams, had grown from 32 million daily active users to 44 million, mainly driven by the Covid-19 coronavirus.

The company recorded a 12 million increase in users in seven days according to its figures, adding that those users generated over 900 million meetings and calling minutes on Teams each day last week.