Episode Transcript
[00:00:23] Speaker A: Hello. Welcome, everybody, and thanks for tuning in to Metrosite, this podcast from Metrogy. I'm Beth Schultz. I'm the vice president of research and the principal analyst with Metric. And with me today is my colleague, Dianne Myers. Diane is the senior research director and principal analyst responsible for our market forecasting and vendor rankings. And those are part of our metrocast service. Today, Diane is going to be sharing top takeaways and other highlights from our recently published workplace collaboration Metrocast to a buyer side market forecast study. And we had 998 companies globally participate in that study. So, Diane.
[00:01:05] Speaker B: Yeah, yeah, thanks. So, yeah, and thanks for kind of queuing up the study. This is a follow on, right? This is the third year. I think it's third year we've done this study. And.
Yeah, we. I mean, I'll just jump in and you can interrupt me with questions as we go along. But in this study, we are covering workplace collaboration technologies. And in some that, we go a little bit deeper. But we're looking at adoption, we are looking at drivers who they're using.
We look at the. On Prem PBX, and when we say on Prem, it could be in a dedicated cloud. So dedicated PBX is UC as a service. Meetings, video meetings, video conferencing equipment, personal endpoints. So when you say personal endpoints, we made like a Sip phone, a desk phone headset, or like a video camera team collaboration, event platforms, right? So really, truly having an event, sip trunking and enterprise SBC's. So those are like the big topics that we covered.
[00:02:13] Speaker A: Okay, great. So why don't we just go through takeaways for each of the technology areas that you did cover. You want to start with UCas?
[00:02:21] Speaker B: Yeah. So, yeah, and I probably won't touch on everything, but let's touch on the things that I thought were really kind of important.
[00:02:28] Speaker C: Right.
[00:02:29] Speaker B: So UCAAS has. Definitely.
[00:02:31] Speaker C: Right.
[00:02:32] Speaker B: And this is actually not new. This isn't like a brainstorm, but, you know, but we know that UCAAS has become the platform of choice, right, for integrating, calling, meeting, collaboration.
[00:02:42] Speaker C: Right?
[00:02:42] Speaker B: So those three pieces, and that's what's driving most companies in their decision, right. So maybe they had on premise PBX, and maybe they were using some other service for meetings, for video, and then maybe even a third one for collaboration, chat, document sharing and the like. But really, UCaaS is that platform, right, in terms of an enterprise, it doesn't mean you might not integrate some other pieces, but that's kind of the core.
But I'll say on prem hasn't gone away. So there is still plenty of PBX dedicated pbxs out there. And on top of that we have some hybrid deployments.
Let me just bring up this. Not part of the study, but we know that Zoom has recently made partnership with Myta and with Avaya to really do that hybrid deployment. Really the calling is still on Prem, but how do I integrate that? So that's some of the takeaways that even if I'm sitting there and I really don't plan on throwing my PBX away anytime soon, I could still do some hybrid deployments. And that was just one example. You could do it with others. We see lots of that happening with Microsoft Teams. We even see Cisco doing this and the like.
So I could still have things in the cloud and I could still maintain on Prem. Pbxs are not growing. No one is buying new large scale PBX that will continue to be a declining market. But the reality is that there's still a good size of installed base out there.
We know that UCAA's spending will continue to increase, right. Because there's still a lot of companies on Prem that will move over. But also we know that our respondents to the study who said, yeah, we're looking to increase spending in the next couple of years and we asked them why. It's because they're actually growing their seats, right. So maybe they started small.
If you're a large enterprise, maybe you started with one department or one location and now you're growing that.
[00:04:40] Speaker C: Right.
[00:04:40] Speaker B: And that's pretty typical path for a lot of companies.
We know that.
The reason, gosh, the reason businesses are looking for those single vendor solutions, right. Having that single platform.
[00:04:56] Speaker C: Right.
[00:04:56] Speaker B: For ucaas, it helps with cost.
That tends to be a big reason why it drives me to that better user experience, not having to flip between three, maybe four different applications just to have one.
But the result.
But there's some impact to that.
Vendor selection starts to churn away, right. So if I, you know, you pick your vendor, right. You know, maybe I'm gonna eliminate my meetings and I'm gonna roll that into ucas to something else and then I'm gonna have looking there. And so what we do is then we end up having a lot of turnover with, with primary vendors, the company, right. And a lot of people would say this is Microsoft Teams impact, right. This is because Microsoft Teams has become such a dominant force in ucAs. A lot of people already were using Microsoft during using it for productivity tools 365. And now, oh, now I can just roll my teams into that, and that tends to be a big decision maker. And really, teams has been on kind of a tear. Right, for market share dominance since COVID Since the pandemic.
Yeah. But I want to pick up one other thing, and so sorry. And then I'll take a breath. You talk about. But one other thing that I thought was probably very interesting, and one that we get a lot of questions about, is, why are businesses. First of all, is there demand for businesses to use a single vendor across UC and CC? Okay.
And using a single vendor does not necessarily mean I have an integrated solution.
[00:06:41] Speaker C: Right.
[00:06:41] Speaker B: And I think that's a really important distinction.
And that's because I could, you know, back in the day on prem, I could have had a via for contact center, and I could have had a via for my calling and collaboration solutions. And there's a number, you know, Cisco would be the same. Right. So I could have that. So we ask, you know, if they're using the same vendor, not that they're fully integrated, but yes. So today, 43% say they have the same.
[00:07:07] Speaker C: Right.
[00:07:08] Speaker B: Across.
Across vendors. But we asked a question. I think this is what.
[00:07:12] Speaker C: What.
[00:07:12] Speaker B: I mean, why. I think this is important is why, right. Or what value? So if you're using the same vendor, what value are you driving from that? And there was three. Three big ones.
[00:07:25] Speaker C: Right?
[00:07:25] Speaker B: And the number one, and there wasn't a lot of differentiation in terms of importance, but the number one was to be able to allow your contact center agents and other employees inside the business to chat and help resolve customer issues in real time. Right? That was number one.
[00:07:41] Speaker C: Right.
[00:07:41] Speaker B: So having that. That piece of it. Number two, cost savings.
[00:07:44] Speaker C: Right.
[00:07:44] Speaker B: One vendor, one throat to choke, and then the other one was another enablement piece, enabling your contact center to use collaboration apps for customer calls.
[00:07:56] Speaker C: Right.
[00:07:57] Speaker B: So if you've been on a call that says, look, I need to escalate to video, well, maybe I'm already having a video conferencing session, and I can tap into that and I can use that. Maybe I can use another chat application to do some chat. So that was the. Those are the three big reasons. And I thought a much more seamless.
[00:08:13] Speaker A: Experience if you're doing that from the same platform.
[00:08:17] Speaker B: Yeah. And seamless for the employees and for the agents.
[00:08:20] Speaker C: Right.
[00:08:21] Speaker B: I mean, you know, you have to make it seamless for the end user, but absolutely, for, you know, for the agents and for all of that, I will say. Right, so that's what our. The survey said. And that, you know, we're talking about the study we out in the market, when we talk to companies, we see that that demand and the growth for using a single solution is more down market with small and mid sized market clients. I just want to make that clear that even upmarket with larger and kind of probably more formal contact centers, you know, with lots of very unique requirements, they are still looking for Buster breed. Right, for the contact centerpiece. That's not to say that they might not have some integration, but that isn't going to drive that decision on which platform they use.
[00:09:07] Speaker A: Yeah, that's a great point.
What other takeaways, Diane?
[00:09:14] Speaker B: Yeah, so let's, you know, so we were talking about ucas as being kind of that central piece, right. And we, you know, but we just, you know, and as that becomes a central piece, that is where most of the revenue is kind of pooling into.
[00:09:27] Speaker C: Right.
[00:09:27] Speaker B: And so those are probably some things to think about.
[00:09:29] Speaker C: Right.
[00:09:30] Speaker B: So we know that meetings and messaging.
[00:09:35] Speaker C: Right.
[00:09:35] Speaker B: So that's the chat.
[00:09:36] Speaker C: Right.
[00:09:36] Speaker B: Whether it be chat one to one or some team team chat activity, those are mainstream, right, people. I mean, and those became mainstream back in 2020.
[00:09:46] Speaker C: Right.
[00:09:47] Speaker B: So we're four years in. There isn't a lot of new growth for just those types of point solutions.
[00:09:54] Speaker C: Right.
[00:09:55] Speaker B: So if I was using zoom, if I was using Webex, if I was using teams, then I probably have grown into ucaas. But all these solutions that are just pure meeting solutions, they have probably grown or are in the process of growing to full ucaas. And I'm not swapping. The only reason I'm swapping is because I'm probably going to ucaas.
[00:10:21] Speaker C: Right.
[00:10:21] Speaker B: And so that is creating some, there's no really new areas of revenue growth for standalone loan point solutions and really no new customers to grab. Really what I'm grabbing is if I can grab a competitive, you know, someone from a competitor, but I'm probably not going to grab them just purely for point. I'm grabbing them for that full ucas. And I think that's just an important, you know, kind of piece to understand.
[00:10:46] Speaker A: I would imagine we'd see, you could see some movement, too, if companies are merging, you know, acquisitions, and then you've got multiple platforms and you're going to standardize or something.
[00:10:56] Speaker B: For sure. 100%. 100%, yeah, yeah, no doubt about it. And probably the only other area I would talk about and, you know, and there's a lot in the study right around cameras and sip trunking and SBC's, but a lot of that is continuing. There's not any new big things there. Probably the only other thing I would talk about, and this has been something that's been happening for years now, but IP desk phones are just kind of declining, right? I mean, people are not refreshing. They may still have desk phones, especially if people are still coming back into the office or you have executives and conference rooms or kind of hoteling arrangements, not hotel hospitality. But when I go into an office and I'm just finding a desk to use for the day.
[00:11:41] Speaker C: Right.
[00:11:41] Speaker B: Because I'm still in that kind of transition where I'm not back in the office permanently, there may still be desk phones, but they're in decline. People aren't refreshing.
But the flip side is that headsets are continuing to grow and people are continuing to use them and quite frankly, refresh them. If I got headset four years ago, yeah, I probably need a new one. So headsets are in a refreshed mode for sure.
[00:12:04] Speaker A: Okay. Just kind of big picture. Any sort of general trends you want to note based on the research, any of your expectations on how the market's going to be shaping up or any surprises that you found in the research?
[00:12:19] Speaker B: Yeah, I didn't find anything that was like, oh, wow, I didn't see that coming. Right. Because this is a fairly, I mean, this is an established market, right. We're still moving with UCAs, but, you know, the vendors, the providers, they're in place. Things are continuing to move. I think the bigger question that we need to look at, and it wasn't really addressed so much in the study, but if, I think just largely about this sector, is how can the companies in this space continue to grow and stay competitive, right. Because we know, and I said that, right, Microsoft is kind of ruling the world in this bucket. So if I'm a company in this space or if I'm from an enterprise, how do I evaluate what's out there and do I take a chance on a smaller company and how do I grow revenue? How do I, you know, if I'm not getting those primary UCAs seats, you know, is there a space for me? And I would say, and I was actually a conference this week and this was a huge topic.
[00:13:25] Speaker C: Right.
[00:13:25] Speaker B: You know, what do you do? And, you know, and everyone throws out, well, you know, you gotta get into the contact center. You have to be contact center as a service. And a lot of these companies have, for sure. Right. And that's why a lot of them, you know, are looking at like, oh, you know, is there value? And what value can we present in terms of that integrated platform across CX and collaboration for sure.
[00:13:47] Speaker A: And of course, the reverse is true too, right? Like contact centers and service providers are also getting into ugas.
[00:13:54] Speaker B: So, yeah, 100%. And so then we look at, is AI an area of revenue? And we don't cover AI in this study. We know metrogy has a great AI study to look at that. But, you know, where does AI have an impact in this space? Does AI have an impact on spending? And in some cases we would say yes, because we know that there are things even in the collaboration space where companies are starting to charge for AI, but there's others where it's now just expected, like meetings, transcription.
I'm not paying extra for transcription from any of these companies. It's kind of just expected.
I think there's this balance of what features now are expected and do I have to do, and then what features could we get companies to purchase, right. And where is that pain point or pain point in terms of like, wow, this solves a problem and I'm willing to pay a little extra for it. And we didn't cover that in here. But I think that is a topic that will not go away for the next few years. Right. Is how do I grow this revenue beyond just getting companies to move to my UCAAS platform off of on Prem? You know, how can I, how can I move it forward? And is AI something, or can I wrap security services into it? Can I do some other value add? Do I wrap professional services? But you know, professional services aren't scalable. You know, what is it?
[00:15:12] Speaker C: Right.
[00:15:12] Speaker B: Because it is still growing ucaas, because we do have people moving from on Prem, but we're going to hit a point before too long and it's single digit growth.
[00:15:21] Speaker C: Right.
[00:15:21] Speaker B: We're not double digit growth. We're not on the context center side with CCAAs where it's double digit and just doing really well because now we're approaching, or right in here, that 50%, maybe slightly below the installed base is on UCAAs. So this next wave is going to be slower, right, in terms of migration.
And does the market, can the market sustain lots of small players in the market, especially as Microsoft just keeps getting bigger and. Yeah, and in the light of other big players. Right. You got Zoom, you got Cisco. I mean, these are three big companies that have resources to do other things, right?
[00:15:57] Speaker A: Absolutely. So that's a good place to leave our listeners off thinking about Diane. But before we say our goodbyes, just quickly, what's next for the Metrocast service?
[00:16:08] Speaker B: Yeah. So the next thing to expect that's coming out next week is our forecast for the CX categories. That includes on prem contact center platforms, CPAs and CRM, and in addition to annual market shares and market shares for Q one and Q two of this year. So those every day, I think, oh, I'm so close. And then I have to tweak a few things, but they are coming next week.
And then we are working on metro ranks for CPaas and Ucaas. And then also the forecasts and the market shares for this category were. I'm working on those, too. So that'll be coming. All of that's going to be coming really quickly.
[00:16:50] Speaker A: Okay. Well, thank you, Diane, for sharing the trends, the top takeaways and giving us a preview of what's coming next for metrocast listeners. If you're interested in learning more about our Metrocast service or any of our research, we'd be happy to hear from you. You can reach out to us via the contact button on the metrogy website at www.metrogy.com. and that is all for now. On behalf of Diane and the rest of the metricy team, goodbye till next time, and take care, everybody.
