UC&C Market to See Continued Growth through 2028

The worldwide unified communications and collaboration (UC&C) market is forecast to reach $69.1 billion in revenue in 2024, an increase of 7.5% compared to 2023, according to IDC. During the 2023-2028 forecast period, the market is expected to witness a slightly lower compound annual growth rate (CAGR) of 5.7% to reach $85 billion by 2028.

"The UC&C market has matured after significant investments were made in the past few years by businesses to address the changed work environment," said Jitesh Gera, research manager for Unified Communications and Collaboration at IDC. "In addition, the crowded UC&C market has led many solutions toward commoditization. However, AI is now changing the game altogether, bringing a fresh wave of new and differentiated capabilities that are likely to draw more investments in the coming years as businesses vie for enhanced employee productivity and better customer engagement."

Looking across the key technology segments of the UC&C market, the two software segments, UC collaboration (meeting software without voice telephony subscriptions) and unified communications as a service (UCaaS) (meeting software including voice telephony subscriptions), accounted for most of the worldwide market revenue (89% in 2023). Their share is expected to rise further as growth in the hardware segments (IP telephony and enterprise videoconferencing systems) turns negative over the forecast period. Meanwhile, the UC collaboration segment is forecast to outpace the overall market with a five-year CAGR of 7.6%.

Microsoft continued to lead with a 44.7% share by revenue in 1Q24. Zoom and Cisco followed distantly with a 6.4% and 5.5% market share respectively. The remainder of the market is largely fragmented with several smaller players focused mainly on specific industry verticals or small and medium businesses (SMBs) in their focus geographies. Among the drivers of UC&C adoption is the continued introduction of AI capabilities into UC&C solutions. IDC expects cloud-based UC&C deployments will increase over time, replacing on-premises deployments as security and data integrity continue to improve. The integration of UC solutions with contact center platforms will continue as buyers look to simplify their technology stacks and reduce their administrative load to work with single unified providers.