Episode Transcript
[00:00:22] Speaker A: Hello and welcome everybody. Thanks for tuning into MetroSight, a podcast for Metrogy. I'm Beth Schultz, Metrogy's vice president of Research and Principal Analyst, and with me today is Diane Myers, who is also a principal analyst. And Diane is responsible for our market forecasting and vendor rankings. These reports are part of our annual Metrocast service, which is our deep dive on the markets for different technology categories comprising the customer experience and workplace collaboration. Markets for Workplace collaboration, which is why we're here today.
That includes UCAs. And we published the Global Buy side Workplace Collaboration Metricast 2023 study with about 1400 companies addressing their adoption and spending plans across nine workplace collaboration technologies. And those are on Prem PBX's UCAs, as I mentioned, meetings, team collaboration, SIP trunking, video room systems, personal endpoints, UC management and enterprise SBCs. In our Metricas study, we also asked participants to tell us about their plans to change providers, when and why, and we ask them to rate their providers on a number of criteria and to share business success metrics.
From these latter two, we recognize providers that receive at or above average customer sentiment scores and whose customers achieved high business success, providers with top ratings. And both earn our MetroStar Top Provider Award. And this year we named 18 top providers as part of our Metrocast service Workplace collaboration deliverables. This year, Diane has compiled market forecasts based on buyside intelligence from our Metrocast study, plus supply side input for four technologies, UCAs on Prem PBXs, SIP Trunking and IP desk phones. We've published in depth, size and spending forecasts for each, as well as companion workbooks. And we've published our first UCAS Vendor Ranking. And Diane is here to tell us more about that report. Diane, welcome.
[00:02:36] Speaker B: Great, thanks.
[00:02:36] Speaker A: I know how much time and effort goes into everything that you do related to metricast, especially the Metra reports. So you must be really excited to have this first UCAS Metro rank on the books.
[00:02:49] Speaker B: Yes, absolutely. For sure.
[00:02:52] Speaker A: Okay, so why don't you tell us about this Metro rank report, give us the overview, and sort of tell us what you were looking at specifically around UCAs.
[00:03:03] Speaker B: Yeah. So this is our second metro rank. So if you'd looked at earlier, we had done one in the year on the CCAS market, and we take a very similar metric based approach.
It's the same methodology that we're looking at for any of these kind of the ranking vendor profiling reports. To have inclusion, we look at market share. And in the case of UCAS, we did it based on the installed base of UCAS seats.
[00:03:32] Speaker C: Right?
[00:03:33] Speaker B: So one seat.
Know the best way to think of a UCAS seat is one unique did.
[00:03:40] Speaker C: Right.
[00:03:41] Speaker B: So direct phone number so that we determine who the top ten are. Right.
Based on that. And then we go from there. Right.
I don't know if you want me to get into this, but I'll just quickly kind of highlight the categories. We look at financial strength. We look across five different core financial metrics. We look at market momentum. So how much did their market share change year over year relative to how the overall market is moving?
We look at the customer sentiment and the customer business success scores, which we take from the larger study. Right. That's what we're hearing from customers and how they're rating the different providers. And then we look at the product mix, right. Do you have this capability? Check. Do you have that capability?
[00:04:26] Speaker C: Check. Right.
[00:04:26] Speaker B: And it all gets scored up and from there. And some categories get higher weights than others.
[00:04:33] Speaker C: Right.
[00:04:33] Speaker B: So they're more important like market share. And from there then we have our list of our top ten.
[00:04:40] Speaker A: So in terms of the types of providers in that top ten, is it primarily just born in the cloud or migrated or changed strategy from an on premise origin?
What's sort of the makeup there?
[00:04:55] Speaker B: Yeah, I mean it's a real mix of different companies.
[00:04:58] Speaker C: Right.
[00:04:59] Speaker B: So at the top we have. Right, which is a software based cOmpany, cloud infrastructure has been doing bits and pieces of UC for many years.
Microsoft Teams really came about and had strength from more the collaboration side.
[00:05:18] Speaker C: Right.
[00:05:18] Speaker B: So whether it be the messaging and then the meeting side and then adding on the voice piece, and then you have what we call more on the like, as you mentioned, came from a legacy of on prem business. So that would be a company like Cisco. That would be a great example for Cisco is sitting in there. And then we have kind of born in the cloud companies. We have eight by eight. We have RingCentral, we have Vonage, Nextiva and even Zoom.
[00:05:48] Speaker C: Right.
[00:05:48] Speaker B: And then the other category and go to meetings.
[00:05:52] Speaker C: Right.
[00:05:52] Speaker B: Or go to.
[00:05:52] Speaker C: Right.
[00:05:53] Speaker B: With the meetings and then the voice side. And then we have two other companies that are more traditional service riders, cable operators.
[00:06:02] Speaker C: Right.
[00:06:03] Speaker B: We have Verizon and Comcast in the mix. So it's a real mix of companies and how they are meeting customers where they need service really kind of varies a little bit from company to company. Microsoft really, their strength is in the overall suite of applications that they're offering businesses, particularly with the Office space products.
[00:06:28] Speaker C: Right.
[00:06:28] Speaker B: The productivity tools. Right. So the larger suite of email and spreadsheets and document delivery pieces. And then you have a company like a Comcast who is selling broadband services and now they're layering on the voice and the UC or a company like Zoom who started off in meetings and got the meetings and then extended out. So really companies coming from lots of different angles on how they're reaching the end enterprise business.
[00:06:58] Speaker A: So, Diane, let's talk a little bit more about Microsoft since it is top of the list and no surprise there, given what's happened with Microsoft during the pandemic. But before the pandemic, that would have been a big surprise, right? Microsoft wouldn't even qualify for being on the list, correct?
[00:07:16] Speaker B: Yeah, well, yeah, for sure.
I've been looking at and kind of evaluating companies and market shares for many, many years, right prior to even this report. And Microsoft was not a top ten.
[00:07:30] Speaker C: Right.
[00:07:30] Speaker B: They kind of got into the business when they acquired Skype for business, but that was still even more a little bit of on Prem or kind of dedicated hosted type of solution. And a lot of it wasn't voice related. And prior to that they had other know link and the like. But really for Microsoft, what was kind of the pivotal moment for them with Teams was the pandemic.
[00:07:52] Speaker C: Right.
[00:07:53] Speaker B: Businesses needed to move very quickly with collaboration suites. Right. We saw Zoom being positively impacted, Cisco with Web and absolutely Microsoft with Teams. And a lot of it was just the meetings piece and then other collaboration tools, little bit less thought given on the voice side, but that has come along. And so Microsoft really, I mean, the pandemic was a pivotal moment for Teams to take off in ways that we would not have been able to anticipate even months before. When we think about late 2019, January, February of 2019, I wouldn't have thought we would be where we are today in terms of the explosion with Teams. And so their market share, let me put that in perspective. They are the largest market share for UCAs hands down. They have the largest market share and they keep growing and extending.
You know, once you hit a certain point, sometimes your growth, a new customer slows a little bit because you've hit a size where growth rates just, it's just the nature of it, right. You're still growing but at a slower rate. And that's really not the case with Microsoft. I mean, they're still outpacing the market growth.
So they are taking customers, but they're also flipping customers who've been on Prem or maybe they've used Microsoft for meetings and now they're just saying, look, I want to go all in on one vendor and that's going to be Microsoft. And we know that's the case.
[00:09:28] Speaker C: Right.
[00:09:28] Speaker B: So not only in market shares and in studies where we ask who you're using and who you're evaluating, but even with enterprises that we consult with and that we have discussions with many of them, if they have not already made that full move, they're already in that process of now putting everything in on the Microsoft side.
[00:09:47] Speaker C: Right.
[00:09:47] Speaker B: So maybe they were already using teams for meetings, like as I said, and now this year or going into 2024, it's all about now provisioning the voice and the video pieces all onto Microsoft.
[00:09:59] Speaker A: So Microsoft's Metro rank positioning is pretty secure for the foreseeable future, I would imagine.
[00:10:08] Speaker B: Yeah. I'll tell you, when we look at just like the score, the top score, Cisco is not that far behind.
But does that mean Microsoft's going to be a top provider? I don't foresee that going away. Are they the number one in our full scoring?
Maybe not, but they'll be a top one for sure. And Cisco is the second largest market share. And this is Cisco WebEx.
[00:10:33] Speaker C: Right.
[00:10:33] Speaker B: And this is Cisco Webex where Cisco is the one running and managing the platform and the voice capabilities. This is not the other pieces that they have where they're selling wholesale platforms to service providers. This is their own branded service, which is Webex calling the Webex suite.
Cisco has really strong financials, as does Microsoft, the second largest market share. They've got a really strong product mix, especially on the Voice. That does exceed a bit of what Microsoft has. Microsoft is still a few years behind in development, although they have moved very quickly and we expect them to continue to move quickly. And Cisco had a little bit higher, slightly market momentum this year, but they were growing from a little bit smaller base. So those two are right up there for sure.
[00:11:30] Speaker A: What about surprises?
So Microsoft would be kind of a given in that, you know, as you put all this time and effort into studying market share and studying the other factors that go into this ranking, what kind of struck you as something that you hadn't been expecting to see?
[00:11:51] Speaker B: Yeah, gosh.
In terms of who was in the top ten, it was pretty much who I had expected to see.
[00:12:04] Speaker C: Right.
[00:12:04] Speaker B: So from that, like who was in there?
[00:12:06] Speaker C: Right.
[00:12:08] Speaker B: Because we knew like Zoom and eight by eight and Ring Central and Vonage were doing quite well.
I think maybe one thing that is worth pointing out that was probably the only thing that was maybe a little bit more surprising than others is that ring was not as high as I would have thought going into this ring central. They definitely have the market share.
[00:12:36] Speaker C: Right.
[00:12:36] Speaker B: They are the third largest in market shares, but where they fell off a little bit was in some of the customer rating scores. I mean that is where they fell off. And they don't have as strong a financials as Cisco, Microsoft and Zoom.
[00:12:51] Speaker C: Right.
[00:12:52] Speaker B: The financial metrics aren't quite as strong, although they are improving and we recognize that. But the customer sentiment was know kind of put them a little bit further behind. And we know that this is an area that they're addressing and that they're working on. But that was probably the only one. As I was working through it, I expected them to be a little bit higher up in our ratings.
[00:13:12] Speaker A: Okay.
[00:13:14] Speaker B: And I'll tell you just Beth, when we think about the top ten, and I kind of mentioned most of them. So Microsoft at the top and then next diva at the bottom, number ten.
[00:13:25] Speaker C: Right.
[00:13:25] Speaker B: Just to be in that top ten, there is still a lot of companies that just miss the cut off.
[00:13:30] Speaker C: Right.
[00:13:31] Speaker B: And I think it's worth just mentioning who some of those companies are in terms of who we're watching and who has the ability to rise above. And those include companies like Diopad, Sangoma, Google, Intermedia, Windstream.
Some of those are global companies like a Google. Some are more North America focused. And then there's obviously companies in Europe, right? We have companies like Gamma, but we also have companies like Vodafone and BT and some of the large incumbents there that are similar to Verizon, although many of these companies, including Verizon, are really focusing on partnerships and working with those partners like a Cisco or a Zoom or even a Microsoft. So lots of companies in this mix. And years ago, we used to have over 100 that we were actively following. And obviously with a lot of mergers and acquisitions, not as many, but still, there is still a lot of companies out there in this space.
[00:14:35] Speaker A: So definitely we'll have to watch out for 2024 Metro rank for UCAs. Maybe some jockeying at the lower end of the list at least, and maybe.
[00:14:44] Speaker B: A little bit of shifting within those top ten. Does Zoom rise a little higher than Cisco or does Comcast or how does vonage fall out? But definitely we could 100% see some companies at the bottom fall off and other ones come up. They're very close.
[00:15:05] Speaker A: Okay, any other points you wanted to raise about the UCAS Metro rank study? If not, let's talk about what's coming in terms of Metro ranks.
[00:15:15] Speaker B: No, I think I would just say just one point I would leave on this, and I would say this with all of our reports that are in this kind of ranking is that these are companies that should be on most businesses shortlist.
[00:15:32] Speaker C: Right.
[00:15:32] Speaker B: This is a great way to say, okay, here's a shortlist or of companies, because if you're on the top ten, I mentioned a few that were kind of below the list. These are companies that are obviously doing things that are.
[00:15:43] Speaker C: Right. Right.
[00:15:43] Speaker B: To even be up in this top ten, they've gained some scale. They've got things going on the product side. So depending on where you're at and what you need, they're all worth kind of at least starting as a starting point to take a look.
[00:15:57] Speaker C: So.
[00:15:57] Speaker B: But yep, up next.
[00:15:58] Speaker A: Yeah, that's absolutely fantastic point. Okay, so up next, where are we going next, Diane?
[00:16:05] Speaker B: Well, we're working on the CPAs, Beth. You and I together.
[00:16:09] Speaker A: We are.
[00:16:10] Speaker B: And I think that one will come out fairly shortly. Right, like that one. We know who the top ten are. I'm actually really excited about that report because I think it is a very dynamic area and there's a lot of really interesting companies in the CPAs outside of the ones you automatically think of off the top of your head. So I think that one's exciting.
Then the one that I'm working on also is on SIP trunking. And I think it's worth noting for anyone listening to this that we are using the term Sip trunking in a very broad perspective. I know a lot of people think about SIP trunking to on prem solutions, but this is including bring your own SIP.
[00:16:53] Speaker C: Right.
[00:16:53] Speaker B: Bring by, you know, things like direct routing operator Connect to Microsoft environments, but also similar, bring your own connectivity to Cisco, Webex or to Zoom or to others. So that SIP trunking is a catch all. So there are some also interesting things in there because of the whole Microsoft impact.
[00:17:13] Speaker A: Yeah, absolutely. And that one will be coming out. What's your sort of guesstimate on that.
[00:17:19] Speaker B: Right now at the end of the year? That's my goal.
[00:17:21] Speaker C: Okay.
[00:17:23] Speaker A: And then next up in all of this, I kind of started off this podcast which is kind of going through what our metricast service entails. So next up, or actually underway, you're working on it now, is the CX Metricast study for 2024.
[00:17:44] Speaker B: Yeah, we're right now in the process of reviewing and finalizing the questionnaire with the goal of getting that programmed and launched, ideally in December, and then having the results available to drive forecasts, but also the study results and the metro stars in January timeframe. And what are we looking at? What are we thinking about in terms of other kind of areas. We'll have the same workplace collaboration, Metrocast, a big, large study next year. Also, we'll do another know. We'll do some more metro ranks, right. We're figuring those out. Definitely UCAs and CCAs. Those are kind of foundational right. At this point. But we're also evaluating. Right. So maybe we're not committed to it, but we're seriously evaluating doing some quarterly data and more to come on that. But that's kind of right now in the brainstorming phase.
[00:18:47] Speaker A: Well, that little teaser is a great place to leave listeners at, I think.
Thank you very much for taking the time to go over the UCAS Metro rank with us.
As always, listeners, we're happy to have you on board with us. If you have any questions for Diane or anybody on the Metro G team, please feel free to reach out to us. You can just go to our website at ww metrogy.com and click the Contact us button.
And just on behalf of the Metrogy team, let me say thank you again for listening. Goodbye till next time, and take care, everybody.
