The Business Communications Landscape Is Ripe for Massive Disruption

Transcription

1 THOUGHT LEADERSHIP The Business Communications Landscape Is Ripe for Massive Disruption MAY 2017 Raul Castanon-Martinez, Senior Analyst, Workforce Collaboration and Communications Business communications have undergone a significant transformation in the last three years; the result is in many ways diametrically opposite to what we have known until recently as unified communications. The transition from a hardware-centric industry into a software-defined ecosystem will be critical for the role that business communications will play in the digital transformation of the enterprise RESEARCH, LLC

2 ABOUT 451 RESEARCH 451 Research is a preeminent information technology research and advisory company. With a core focus on technology innovation and market disruption, we provide essential insight for leaders of the digital economy. More than 100 analysts and consultants deliver that insight via syndicated research, advisory services and live events to over 1,000 client organizations in North America, Europe and around the world. Founded in 2000 and headquartered in New York, 451 Research is a division of The 451 Group Research, LLC and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication, in whole or in part, in any form without prior written permission is forbidden. The terms of use regarding distribution, both internally and externally, shall be governed by the terms laid out in your Service Agreement with 451 Research and/or its Affiliates. The information contained herein has been obtained from sources believed to be reliable. 451 Research disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although 451 Research may discuss legal issues related to the information technology business, 451 Research does not provide legal advice or services and their research should not be construed or used as such. 451 Research shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice. NEW YORK SAN FRANCISCO LONDON BOSTON 1411 Broadway Suite 3200 New York, NY P F Geary Street 9th Floor San Francisco, CA P F Paxton House (Ground floor) 30, Artillery Lane London, E1 7LS, UK P +44 (0) F +44 (0) Federal Street 5th Floor Boston, MA P F ABOUT THE AUTHOR RAUL CASTANON-MARTINEZ SENIOR ANALYST, WORKFORCE COLLABORATION AND COMMUNICATIONS Raúl Castañón-Martínez is a senior analyst based in Boston focusing on business communications and collaboration technologies such as enterprise messaging, voice, bots, speech recognition and unified communications. II

3 Key Findings The transition of business communications from a hardware-centric industry to a software-defined ecosystem is accelerating and reaching a tipping point. This will redefine the competitive landscape; most of the dominant players from yesteryear will be displaced by emerging startups with innovative approaches for improving how businesses communicate. Innovations in the digital workspace, like team collaboration and communications-enabled workflows, will be possible thanks to the scalability and flexibility that the cloud provides. This will make the transition to cloud-based communications even more compelling. III

4 Executive Summary INTRODUCTION Legacy providers of unified communications (UC) face a growing challenge from cloud-based competitors and emerging cloud-only, mobile-first vendors. In addition, cloud-based communications providers are redefining how workers communicate and collaborate with each other and the ways in which businesses engage with their customers, partners and employees. These companies many of which were not around 10 years ago are challenging the dominance of longstanding incumbent UC providers. In this report, we look at the key trends in business communications, including and principally the transition from a hardwarecentric industry into an open, software-defined ecosystem. Business communications have evolved in the last three years and have influenced the current competitive landscape. There are emerging trends that will transform the industry in the next two years for example, the role emerging technologies (like communications APIs) will play, the convergence of communications and collaboration services and the hyperscale cloud infrastructure providers influence on the industry. METHODOLOGY This report is based on interviews, reports and advisory work with enterprises, vendors, service providers and investors. Our research and findings are based on discussions with leading vendors concerning their product strategies and recent commercial performance. These include communications providers like 8x8, Bandwidth.com, Dialpad, Fuze, Jive Communications, LoopUp, NEC, RingCentral and Flowroute; communications PaaS (CPaaS) providers like Kandy (GENBAND), ShoreTel, Nexmo (Vonage), Tropo (Cisco) and Twilio; technology vendors such as Cisco, Google, IBM, Microsoft and Nuance Communications; messaging platforms like Slack Technologies and HipChat (Atlassian Software Systems); and emerging startups such as Converse, Conversable, Flow XO, Inbenta, Meya, Troops and Chyme (Unvired). We focus on the US market within this report because this is the region most affected by advances in enterprise communications over the past two years, with innovations on different fronts as well as M&A activity concentrated in US-based companies. We include end-user survey data from the US that illustrates consumers attitudes toward mobile communications and the new digital channels; sources include our Global Mobile Forecast and Voice of the Connected User Landscape (VoCUL) surveys on US Consumer Trends and Smart Home Trends. Reports such as this one represent a holistic perspective on key emerging markets in the enterprise business applications space. These markets evolve quickly, though, so 451 Research offers additional services that provide critical marketplace updates. These updated reports and perspectives are presented on a daily basis via the company s core intelligence service, 451 Research Market Insight. Forward-looking M&A analysis and perspectives on strategic acquisitions and the liquidity environment for technology companies are also updated regularly via Market Insight, which is backed by the industryleading 451 Research M&A KnowledgeBase. Emerging technologies and markets are covered in 451 Research channels including Business Applications; Cloud Transformation; Data Platforms and Analytics; Datacenter Technologies; Development, DevOps and IT Ops; Enterprise Mobility; European Services; Information Security; Internet of Things; Mobile Telecom; Multi-Tenant Datacenters; Networking; Service Providers; Storage; and Systems and Software Infrastructure. Beyond that, 451 Research has a robust set of quantitative insights covered in products such as Voice of the Enterprise, Voice of the Connected User Landscape, Cloud Price Index, Market Monitor, the M&A KnowledgeBase and the Datacenter KnowledgeBase. All of these 451 Research services, which are accessible via the web, provide critical and timely analysis specifically focused on the business of enterprise IT innovation. For more information about 451 Research, please go to: IV

5 Table of Contents 1. BUSINESS COMMUNICATIONS WILL PLAY A CENTRAL ROLE IN THE DIGITAL TRANSFORMATION 1 MOBILE MESSAGING HAS BECOME THE NORM FOR PERSONAL AND BUSINESS COMMUNICATIONS Figure 1: Two out of Five Employees Use a Smartphone for Business Purposes Daily Figure 2: Messaging Is Emerging as a Top Activity Alongside Core Productivity Tools The Use of OTT Messaging Apps Reflects Limitations in Business Communications Tools Figure 3: M&A Activity for Business Communications, Q Q Figure 4: Timeline of Sample Business Communications M&A Transactions THE CONVERGENCE OF UC WITH MESSAGING AND COLLABORATION THE IMPACT OF HYPERSCALE CLOUD PROVIDERS BUSINESS COMMUNICATIONS REMAINS A COMPLEX AND FRAGMENTED SPACE DIGITAL WORKSPACE AND COLLABORATIVE COMMUNICATIONS 6 MOBILE MESSAGING WILL REMAIN A DISTINCTIVE TOOL FOR BUSINESS COMMUNICATIONS THE TRANSITION TO THE CLOUD IS REACHING A TIPPING POINT Figure 5: User-Driven Business Tools Are the Top of the List in SaaS or Hosted Application Adoption BUSINESS COMMUNICATIONS WILL EVOLVE INTO A SOFTWARE-DEFINED ECOSYSTEM IMPLICATIONS OF A SOFTWARE-DEFINED ECOSYSTEM FOR THE ENTERPRISE AND IT Industry Outlook: Chat Bots, NLP and AI CONCLUSIONS FURTHER READING INDEX OF COMPANIES 13 V