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Research Firm IHS Markit Named RingCentral The Leading Provider In The Unified Communications as a Service Category.

RingCentral Ranked #1 in IHS Markit UCaaS Scorecard For Third Year In A Row

Diane Myers
Senior Research Director, VoIP, UC, and IMS
IHS Markit Technology | Vendor Scorecard
Top Takeaways
In this Scorecard we look at the top 10 UC as a service (UCaaS) providers in North America. Over the past nine years, there has been slow and steady consolidation of business VoIP providers in North America. However, despite the mergers and acquisitions, there are still a large number of UCaaS providers in the region, including traditional premises-based PBX and UC vendors, pure-plays, incumbent operators, cable MSOs, CLECs, ISPs, and system integrators. At the end of 2018, the providers that made the cut had over 500K UCaaS seats each, with over 1.3M seats at the high end. A number of providers that did not make the cut have an installed base of 150– 500K seats. Consolidation continues with each passing year, but the market still cannot sustain the large number of providers long term, so we will see further consolidation or providers closing down.

Among the leading UCaaS providers, a few stand out:

  • As the market share leader and with above average market growth, installed base, and financial score, RingCentral came out on top in this year's scorecard by a large margin. Over the past year, RingCentral has separated itself from the rest of the pack through continued focus on expanding its customer base, addressing large enterprise requirements and investments in product development, professional services, and customer care.
  • Mitel jumped again, moving from fourth to second as it kept pace with the market and grew its installed base enough to solidify its second-place ranking. The company has focused on MiCloud Connect as its lead UCaaS offering and spun the cloud business off into its own division in 2019 to allow the business to run more like a UCaaS pureplay than an arm of a legacy PBX and UC vendor, which we believe is a good move for the company.
  • 8x8 had an all-around solid year, growing enough to keep its installed base at number three. Its installed base, service development, and market average growth and financials keep it in the running as a top provider. In terms of market share, it is the fourth-largest UCaaS provider. The company has also been expanding its presence up-market with larger businesses and growing its channel partners.
  • Verizon rounds out the top four UCaaS providers. The operator had above average financial score and has the third-largest installed base. The company is heavily tied to Cisco (through its BroadSoft acquisition) for its service UCaaS portfolio. Verizon is working to attach multinationals, the mid-market, and small businesses with a portfolio of data, security, and professional services and resources that is hard for pure-plays to match.
  • This year's scorecard shows that although the leading pure-play providers are a force, they have serious competition, particularly among older, more established companies—namely incumbent operators (Verizon and Windstream), traditional UC vendors (Mitel), and cable operators (Comcast). The ongoing demand for UCaaS services is vast with a broad set of customers and requirements.
  • There is a broad mix of providers outside the top 10 that are growing and doing interesting things in regard to product innovation, channel strategy, and customer service. These include Fuze, GoTo (formerly Jive), NetFortris, Cox, CoreDial, CenturyLink, Dialpad, Fusion, Masergy, Intermedia, CallTower, Digium, and Evolve IP.
This document is an excerpt; please contact IHS Markit for the full report including all service provider profiles.
    UCaaS Leadership Scorecard
    The UCaaS market in North America is marked by a large and dynamic provider landscape. Mergers and acquisitions continue as providers look to gain scale, new capabilities, and long-term survivability. Additionally, traditional PBX and UC vendors such as Cisco, Mitel, Unify, Microsoft, Alcatel-Lucent Enterprise, and Avaya continue their push into the cloud either directly or through platforms sold to providers.

    The top 10 providers have been fairly consistent over the past few years. Compared with our 2018 report, there have been some shifts in the rankings with RingCentral pulling away from the pack in 2018. The other noteworthy change was Windstream coming back into the top ten and Fuze just falling off. The consistency of the top providers indicates that many continue to do the right things, in some cases expanding through acquisitions and growing organically.

    In this year's Scorecard, RingCentral led by the largest margin we've had in this report because of its market share position as the largest provider in North America with its Office offering, as well as the strongest financial score. In addition to its market share, RingCentral grew well above the market average, which helped cement its leadership position. RingCentral operates its own platform and is focused on meeting the needs of businesses of all sizes. RingCentral has been aggressive with customer acquisition, and has maintained an edge in service development on the UC front with enhanced meetings and team collaboration.

    Mitel made another jump in this year's report because of its UCaaS installed base and solid momentum in growing its user base; it is the second-largest provider in North America. Mitel is the one traditional PBX and UC vendor in the scorecard and has operated more like a traditional equipment vendor than a nimble, pure-play UCaaS provider. Having sold the company to private-equity firm Searchlight Capital in 2018, the UCaaS business was split into its own unit in part to get the company moving in that direction. Mitel has two UCaaS offerings: MiCloud Connect, its multi-tenant-based service for the SMB market, and MiCloud Flex for larger enterprise requirements.

    8x8 and Verizon came in together for the second year in a row with only 0.02 points separating them. 8x8 has consistently been near the top of our Scorecard and is a long-standing stalwart of the UCaaS market. The provider has a strong position with small and mid-market businesses and continues to expand up-market to large enterprises directly and through channel partners. This year was about executing on its new X Series of packages, which brought together UCaaS and cloud contact center into combined service packages in an effort to simplify service consumption.

    Verizon is the one traditional telco that has successfully made the transition to advanced business voice services, including UCaaS. It is the third-largest UCaaS provider in North America and serves small, mid-market, and large enterprises. Verizon is in a unique position through Verizon Wireless to sell a true mobile first UCaaS service, which it has been successfully selling for well over a year. In 2018, its financial strength gave it an edge over smaller, privately held providers.

    Nextiva rounds out the top five UCaaS providers, having made the largest jump in this year's report because of its strong growth, which gave the provider the largest market momentum score. The company utilizes Cisco BroadWorks for call control but has done its own development on UC and enhanced applications, which has given it control over the user experience. Although the company is privately held, it has taken no outside financing and continues to expand and invest through its own resources.

    In our February 2019 Unified Communication (UC) Strategies and Leadership North American Enterprise Survey, we asked the respondents who are implementing at least part of their UC solution through UCaaS to rate criteria for selecting providers. The top four criteria, rated very important by the most respondents, are security, financial stability, service and support, and managed service provisioning. This corresponds with informal discussions with enterprises that express concern about going with a provider that is stable, can offer a high- quality service, and can support their needs to grow.

    There are a handful of UCaaS providers that just miss the top 10 cutoff for this report but are worth highlighting. These providers include Fuze, GoTo (formerly Jive), NetFortris, CoreDial, Cox, Masergy, CenturyLink, Dialpad, Avaya, Fusion, Intermedia, Digium, CallTower, and TPx. These are all important providers to watch, and many are doing interesting things with applications and go-to-market strategy focused on specific verticals, market segments, and next-generation services .

    One important trend in the UCaaS market is the growth of larger enterprise deals in the past five years. As adoption has risen, we see changing requirements around quality, support for hybrid environments, security, and support for SD WAN. These are public and private sector firms ranging all the way up to tens of thousands of endpoints. Many of these larger deals are with organizations that are highly distributed, where the benefits of cloud across many locations is readily apparent. With the rise of these opportunities, many providers are evolving their businesses to chase these deals down. However, not all cloud providers are suited for the rigors of large enterprise deals, and there are risks to chasing and winning them.
    About RingCentral
    RingCentral, Inc. (NYSE:RNG) is a leading provider of global enterprise cloud communications and collaboration solutions (UCC). RingCentral's platform offers much more than traditional office phone systems, VoIP business phone service, or virtual PBX. More flexible and cost-effective than legacy on-premises systems, RingCentral empowers today's mobile and distributed workforce to communicate, collaborate, and connect from anywhere, on any device. Providing increased flexibility and cost effectiveness,. It is a comprehensive platform of features that unify voice, SMS, team messaging and collaboration, conferencing, video meetings, webinars, contact center, and faxRingCentral's open platform integrates with leading business apps and enables customers to easily customize business workflows. RingCentral is headquartered in Belmont, California, and has offices around the world.

    A few reasons why RingCentral is the leading cloud communications and collaboration solution:
    RingCentral Global Office™
    RingCentral Global Office™ eliminates geographical borders by now offering a truly local solution throughout the world. Specifically, for European countries, service includes local numbers, support, and currency billing.
    RingCentral Glip
    RingCentral Glip is a single, unified experience for all of RingCentral Office's communications and collaboration capabilities. RingCentral's unified client brings all modes of communication into one place, reducing the time users waste switching between apps and device endpoints. This workspace is one of a kind and includes team messaging, file sharing, gifs, calendars, project management, and even more collaboration features, with all of RingCentral's modes of communication in one place.
    RingCentral's Integrations
    RingCentral's Integrations capabilities provide workflow solutions while offering the ability to build customized solutions or select the desired apps available on the RingCentral Connect Platform™. Increase productivity and adoption while empowering users to effortlessly have all business tools at their fingertips.
    RingCentral is recognized as a leading UCaaS solution by industry analysts and reputable companies such as Google, Forbes, Gartner, Frost & Sullivan Deloitte, Synergy Research Group, IHS Markit, and more. RingCentral is recognized as a leader in the Gartner Magic Quadrant for Unified Communications as a Service (UCaaS) Worldwide for the fifth consecutive year.
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