The worldwide Unified Communications & Collaboration (UC&C) market grew 29.2 percent year-over-year and 7.1 percent quarter-over-quarter to $13.1 billion in the fourth quarter of 2020, according to the International Data Corporation (IDC) Worldwide Quarterly Unified Communications & Collaboration QView. Revenue growth was also up an impressive 24.9 percent for the full year 2020 to $47.2 billion.
How business was conducted changed dramatically in 2020 due to COVID-19, driving companies of all sizes to consider and adopt scalable, flexible, cloud-based digital technology solutions (e.g., Unified Communications as a Service or UCaaS) as part of their overall integrated UC&C solution.
Vendors and service providers also saw exponential growth in the number of video and collaboration end-users in 2020. In 2021 and beyond, IDC expects worldwide UC&C growth will be driven by customers across all business size segments (small, midsize, and large) with interest especially in video, collaboration, UCaaS, mobile applications, and digital transformation (DX) projects.
Some UC&C market specifics include:
- Hosted Voice/UC Public Cloud (UCaaS) grew 26.1 percent year-over-year and 6.8 percent sequentially in 4Q20 to nearly $4.6 billion in revenue. For the full year 2020, public cloud UCaaS revenue increased 21.2 percent to $16.4 billion.
- UC Collaboration (including video conferencing software and cloud services) increased 48.0 percent year-over-year and 5.1 percent sequentially to reach almost $6.2 billion in revenue in 4Q20. For the full year 2020, UC Collaboration revenue increased 45.0 percent to $22.1 billion.
- Revenue for IP Phones declined 20.4 percent year-over-year but grew 20.3 percent sequentially in 4Q20. For the full year 2020, IP Phone revenue declined 22.8 percent to $1.9 billion. Shipments of IP Phones declined 23.1 percent year-over-year but increased 14.7 percent sequentially. For the full year of 2020, shipments of IP Phones were down 22.2 percent.
- Enterprise Videoconferencing Systems (i.e., videoconference room endpoints) increased 26.1 percent year-over-year and 36.5 percent sequentially to more than $827 million in 4Q20. For the full year 2020, revenue increased 12.4% to almost $2.6 billion.
“In 2020, COVID-19 caused many businesses and organizations to re-think their plans for leveraging digital technologies and accelerated interest in and adoption of solutions such as team collaboration, team messaging, videoconferencing, and UCaaS, among other technologies,” said Rich Costello, senior research analyst, Unified Communications and Collaboration at IDC. “In 2021, IDC expects positive growth numbers across these key UC&C segments to continue, albeit at slightly more modest rates.”