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Collaboration software market to reach $45B in 2019, with Cisco and Microsoft as dominants: Synergy Research

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Collaboration software market will continue to grow at its rapid pace, majorly driven by hosted and cloud collaboration market segments.

According to a recent study by Synergy Research, the global collaboration market is expected to total $45 billion, growing by 9% this year. The analyst firm predicts that TeamWork Apps market will witness the highest growth, increasing by around 60% in 2019.

CPaaS (Communications Platform as a Service) and VaaS (Video as a Service) will each grow by 30%. CPaaS is a cloud-based solution that allows developers to integrate real-time communications features into their apps. The developers don’t have to create backend infrastructure and interfaces. Whereas, VaaS is the solution for delivering video conferencing services over a network.

As per Synergy Research, Unified Communications as a Service (UCaaS) and CCaaS (Contact Center as a Service) are expected to be the next markets to witness highest growth. UCaaS is a cloud delivery model that includes online messaging and meetings, video conferencing, and other team collaboration applications. On the other hand, CCaaS is a cloud-based platform that helps enterprises to use a contact center software for providing an enhanced customer experience.

The study further states that total hosted and cloud collaboration markets are expected to rise by 19% in 2019. Revenue from on-premise products will decrease by 3%, as more enterprises are approaching a cloud strategy.

These collaboration markets are opening broad opportunities for vendors. As per Synergy, the quarterly revenues from collaboration solutions are currently running at an all-time high, and are further expected to grow seamlessly over the next five years.

In the third quarter, the revenues from collaboration solutions, including both hosted & cloud applications and on-premise products will reach approx. $11 billion. In the fourth quarter, the revenues are predicted to be even higher.

The study finds that revenues from hosted & cloud solutions currently hold 64% market share, whereas on-premise products account for 36%. This shows a significant change in the last three years, when the market was somewhat distributed equally between the two segments.

“Collaboration continues to be a somewhat fragmented market with many disruptive and high-growth companies targeting specific technology areas,” said Jeremy Duke, Synergy Research Group’s founder and Chief Analyst.

“That being said, the overall trend is quite clear in that traditional on-premise sales are shrinking and being replaced by cloud-based communication services. There is now wide adoption of these new emerging cloud services and our forecasts show that they will continue to grow strongly over the next five years.”

By region, North America will continue to dominate the collaboration market, with over 50% of the total market share. The EMEA region accounts for around one-third of the market share.

Cisco and Microsoft are the leaders in collaboration software market, where Cisco has pulled further ahead in the last quarter. Cisco’s collaboration solutions include Cisco Webex Teams, Cisco Webex Meetings, Cisco Unified Contact Center Express, Cisco IP Phones, etc.

Cisco is investing significantly in collaboration services. Last year, the company acquired an AI-driven relationship intelligence platform provider named Accompany for $270 million to form Cisco Collaboration Technology Group.

Microsoft, on the other hand, provides Office 365, Microsoft Teams, Skype for Business, Outlook, to name a few. The tech giant is increasing collaboration among everyone with its tools. It announced the free version of Microsoft Teams, rolled out new features in Teams to empower Firstline workers, and is continuously adding new features to collaboration tools.

Also read: Office 365 arrives to Mac App Store, bringing improved productivity to Mac users

Behind Cisco and Microsoft, the vendors like Slack, twilio, BroadCloud, Zoom, Fuze, Dropbox, RingCentral, and LogMeIn are leading the market in distinct segments. Synergy mentioned that growth of Slack is worth noticing, as its collaboration tools have witnessed over double growth year over year.

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