LICENSED FOR DISTRIBUTION

Market Guide for Midmarket Unified Communications as a Service, North America

Published: 10 January 2018 ID: G00321910

Analyst(s):

Summary

Midmarket enterprises are increasing their UCaaS adoption in an effort to drive collaboration and communication improvements. Midmarket application leaders must assess UCaaS requirements in the context of broader business needs and initiatives including bundling and network connectivity.

Overview

Key Findings

  • UCaaS providers with comprehensive communications services will be able to create sustainable differentiation in the UCaaS midmarket competitive landscape.

  • UCaaS providers vary markedly in their ability to support industry-specific APIs and meet vertical-specific security and compliance requirements.

  • The midmarket UCaaS competitive landscape will diverge as providers incorporate unique approaches to WSC, platform developments and broader partnerships.

Recommendations

To optimize IT operations, IT application leaders tasked with planning, selecting and deploying unified communications and collaboration should:

  • Reduce overall IT spend and provide a more seamless user experience by selecting UCaaS providers with broad portfolio and delivery capabilities (basic contact center, file sharing, security, networking, office suite, mobility) as part of single contract.

  • Identify provider support for specific industries' security or compliance requirements, as well as support for third-party applications central to business processes.

  • Incorporate longer-term provider initiatives and roadmaps into UCaaS evaluations by requesting insight into provider networking plans, workstream collaboration developments, platform partnerships and API support.

Market Definition

This document was revised on 8 February 2018. The document you are viewing is the corrected version. For more information, see the Corrections page on gartner.com.

Unified communications as a service (UCaaS) for the midmarket — defined as organizations with between 100 and 999 employees, and typically $50 million to $1 billion in revenue — includes cloud solutions intended to improve user productivity and enhance collaboration. Gartner defines UC solutions as offerings that facilitate the use of multiple enterprise communications methods to achieve those aims. UC solutions integrate communications channels (media), networks and systems, as well as IT business applications and, in some cases, consumer applications and devices.

UCaaS includes six broad communications service areas:

  • Telephony — Includes enterprise-grade voice features, including support for mobility.

  • Meeting solutions — Includes multiparty voice (audio) conferencing, videoconferencing, web conferencing (including document- and application-sharing capabilities), and various forms of unified meeting capabilities.

  • Unified messaging (UM) — Includes email and various approaches to UM.

  • Presence and instant messaging (IM) — IM enables individuals to send textual and other information to individuals or groups in real time. Presence services enable individuals to see the status of other people and resources.

  • Clients — Includes thick desktop clients, thin browser clients, clients for mobile devices (such as smartphones and tablets), and specialized clients embedded in business applications.

  • Communications-enabled applications — Includes integrated contact centers, communications platform as a service (cPaaS) and workstream collaboration (WSC), among others.

Cloud delivery of UC functions is characterized as provisioning services on shared infrastructure (for example, data centers, racks, common equipment and blades). Cloud delivery also uses shared tools (for example, provisioning, performance and network management tools); per-user-per-month pricing; and elasticity to dynamically add and remove users. Cloud UC can be provisioned in two primary ways:

  • Multitenant — Includes UCaaS in which all customers share a common (single) software instance.

  • Multi-instance — Each customer receives its own software instance, but shares infrastructure.

Note: Many UC providers support delivery models in which equipment resides in a service provider's data center and is provisioned on a per-user-per-month basis, but the equipment is dedicated for use by a single organization. This type of dedicated cloud offer is not included in this evaluation.

Market Direction

The UCaaS midmarket is undergoing transformation as the solutions that IT planners acquire evolve and as UCaaS providers enhance their midmarket portfolios. UCaaS solution adoption is accelerating within the midmarket, with the adoption of services designed to improve collaboration, customer service, workflows and security. In response, providers continue to enhance portfolios and go-to-market strategies to leverage the UCaaS midmarket opportunity.

Gartner estimates that the North American UCaaS market for midsize enterprises was almost $1.5 billion in 2017. The market is expected to yield a 19% compound annual growth rate (CAGR), generating nearly $3 billion in end-user spend by year-end 2021 (see "Forecast: Unified Communications, Worldwide, 4Q17" ). Table 1 shows annual midmarket spending projections in constant dollars from 2014 through 2021.

Table 1.   UCaaS End-User Spending (Millions of Dollars), North America, Midmarket, 2014-2021

2014

2015

2016

2017

2018

2019

2020

2021

CAGR (2016-2021)

UCaaS End-User Spending

810

978

1,207

1,480

1,791

2,146

2,505

2,860

18.8%

Growth

21%

23%

23%

21%

20%

17%

14%

Source: Gartner (January 2018)

The North American UCaaS market for midsize enterprises consists of a broad mix of providers. Providers include small applications specialists, telecom service providers, large office suite providers, cable providers, system integrators, heritage premises-based telephony providers and, most recently, infrastructure as a service (IaaS) providers.

The North American UCaaS midmarket is composed of two provider approaches:

  • Providers provisioning UCaaS solutions, leveraging their own proprietary platform.

  • Providers provisioning UCaaS solutions via a third-party platform that they own and support.

Gartner increasingly expects the UCaaS market to trend more to the first option because it is a more agile approach, whereby enhancements and new functionality are quickly available to customers. Benefits and risks for the two provider types are shown in Figure 1.

Figure 1. Risks and Benefits Associated With Different Provider Approaches
Research image courtesy of Gartner, Inc.

Source: Gartner (January 2018)

Market Analysis

IT application leaders within midsize organizations seek specific UCaaS solutions to align with organizationwide communications initiatives and business processes.

This Market Guide complements the Gartner UCaaS Magic Quadrant, which requires global support spanning North America, Europe and Asia/Pacific. The strict global requirement in the Magic Quadrant leaves out many of the North American-focused UCaaS providers that are a good fit for the thousands of midmarket businesses and organizations in the U.S. and Canada. Therefore, this Market Guide focuses on some of the more prominent North American UCaaS providers that are not featured in the Magic Quadrant.

Verticalization of Services

Within the UCaaS market, industry-oriented and streamlined communications are especially important to address requirements for simple, yet deep integration across workplace systems in midsize enterprises. UCaaS providers display various abilities to address the requirements of individual industry sectors. APIs can enable deeper connections and integration with external vertical ecosystems. Essentially, APIs have the ability to connect business processes with external digital functions to create seamless industry-specific business operations. The ability to acquire vertically oriented UCaaS solutions means that services are tailored for specific industry sectors and are more closely aligned with unique business processes within these sectors. For example, Vonage's real-estate-oriented UCaaS solution features centralized authentication with Active Directory (AD) integration through Okta and Azure AD (both prominent in the real estate industry) to enable centralized authentication. Furthermore, Vonage's MobileConnect solution is emphasized in this vertical to enable communications handoffs from the office to mobile devices as real estate agents meet with on-site customers.

Some industry segments require adherence to specific compliance standards to ensure security within a vertical segment. Acquiring necessary certifications at the industry level ensures your solution adheres to some common security standards applicable to your business. For example, U.S. healthcare providers (or any organization that electronically handles U.S. medical records) must comply with the American Health and Insurance Portability and Accountability Act (HIPAA). Acquiring UCaaS from a provider specifically offering UCaaS for healthcare organizations, such as Evolve IP or Windstream, means the solution architecture is likely to be inherently HIPAA compliant.

Bundled UCaaS

While some IT application leaders prefer stand-alone UC functions, many prefer acquiring UCaaS functions as part of an office suite or bundled solution. Pricing will be based on a broad set of features versus a single UC application. As part of the office suite or solution bundle, a large set of employees within organizations will obtain UC functions, regardless of specific user requirements. According to Gartner's Midmarket End User Survey results, 82% of midmarket IT planners agree (strongly agree to somewhat agree) that they seek affordable integrated bundled solutions (see Figure 2). Only 5% of respondents disagree with this pursuit and, instead, seek point solutions.

Figure 2. Degree to Which Midsize Enterprises Seek Affordable Integrated and Bundled Solutions
Research image courtesy of Gartner, Inc.

Source: Gartner (January 2018)

Gartner expects bundled functionality to continue to improve for UCaaS. For example, functionality within Google G Suite and Microsoft Office bundles continue to experience enterprise-grade enhancements, making functionality suitable for a more extensive base of worker groups and business use cases. In some cases, functionality improvements will offset midsize enterprise requirements for stand-alone premium UC cloud services. For example, some planners will decommission contracts for premium-grade conferencing services specifically designed to support large groups of users engaged in large, external-facing sessions. Expect midsize enterprises to reduce the number of cloud services coming into the organization as bundled office functions grow in scalability and features.

Gartner expects noncloud office providers to increasingly grow their adjacent service bundles. In addition to telephony, providers will include services such as conferencing, IM/presence, networking, security and file storage as part of bundled solutions. More robust, broad service features will be included in promotional campaigns to incentivize end-user adoption. For example, Windstream is currently positioning a free month of service when its UCaaS OfficeSuite is acquired alongside its software-defined WAN (SD-WAN) services.

Cost Considerations

IT budgets will influence the types of UCaaS solutions acquired and the ways in which solutions are acquired. According to Gartner's End User Survey results, the most significant challenge midmarket IT planners expect to face over the next 12 months relates to budget constraints (see Figure 3). More than half of IT planners say IT budget constraints will be one of the most significant challenges going forward. Cost will be an important consideration in solution acquisition and planning across both lower (organizations with between 100 to 499 employees) and upper (organizations with between 500 to 999 employees) midsize enterprises.

Figure 3. Significant IT-Resource- and IT-Management-Related Challenges for Midmarket Organizations
Research image courtesy of Gartner, Inc.

Source: Gartner (January 2018)

Some midsize enterprises will acquire UCaaS through a freemium approach. UCaaS freemium services feature basic voice or conferencing services with minimal functionality. For some organizations, this approach is used to save money and test service types. Providers, in turn, receive benefits in terms of gaining access to a broader base of users without investing significant resources in the sales cycle. IT application leaders should look for clarity with service types to distinguish the benefits of paid-for services versus the functionality available in freemium offers. In some cases, the freemium services will suffice for particular business requirements. In other instances, paid-for services will be required to meet enterprise-grade business needs. Typical paid-for enhancements to conferencing services include recording, polling, noise cancellation features, personalization of meeting rooms, screen sharing capabilities and support for a larger number of meeting participants. Gartner estimates that the user conversion rate from freemium to paid-for services is approximately 5% to 7%. Increasingly, value-added services will be provisioned through a freemium approach as premium UC services continue to acquire more robust, industry-centric functionality.

User Preferences

Ease of use will increasingly shape UCaaS acquisition decisions and impact the extension and use of services across midsize organizations. If user interfaces are not intuitive and straightforward, users will fail to widely adopt the application. Intuitive user interfaces will also be critical for moving beyond the initial application investigation phase.

Providers, in response, will continue to enhance the integration of various UCaaS functions. As part of this consolidation/unification effort, providers will:

  • Strive to launch an application in fewer steps

  • Improve access to features and functions (seamless mobile device and endpoint support)

  • Implement zero-touch or low-touch service provisioning (look for ongoing provider investment in portals)

  • Embed artificial intelligence (AI) functionality

  • Enhance the reporting and interoperability functions between UC service types

  • Consolidate the look of different interfaces

Ease of use is a moving target, as broader functionality and options are extended to UCaaS solutions and preferences for simplicity continue to grow. Gartner expects ease of use will lead to the stickiness of applications, thereby reducing customer churn. Many midmarket enterprises might have multiple types of UCaaS elements within an organization. However, the only services that will be renewed at the end of the contract period will be those that exhibit broad usage across the organization.

Workstream Collaboration/Team-Centric Communications

Increasingly, communications functionality (including voice) will be offered through a WSC-centric approach. The idea of WSC centrism means the communications applications are primarily aligned across a shared-team, conversational workspace instead of broadly across the organization. Core WSC capabilities include persistent messaging, alerts, notifications, search, archiving, content sharing and file storage. Voice and video capabilities are currently at various stages of (limited) maturity across WSC solutions, although providers will focus on enhancements in these areas.

Figure 4 shows the top three greatest benefits or outcomes IT planners experienced as a result of WSC use within their organization. According to IT planners who currently use WSC solutions, the ability to share information more easily and improvements associated with team coordination are the top benefits. Overall, a wide range of benefits are cited for WSC use — from productivity improvements to improvements in third-party application integration.

Figure 4. Top Three Benefits of WSC Usage
Research image courtesy of Gartner, Inc.

Source: Gartner (January 2018)

Shifting Network Approaches

UCaaS providers have multiple WAN strategies to connect with their customers, with the market now in a state of flux. Traditionally, cost-sensitive midsize enterprises connected with customers via DSL or cable modem broadband. In some cases, customers secure two broadband connections, one specifically for UCaaS and the other for general-purpose internet access. Many large organizations connect their smaller sites via broadband; this is common in retail, where there may be hundreds of locations (such as a drug store chain).

Other midsize enterprises have strong voice-quality requirements and are willing to spend extra for Internet Protocol Multiprotocol Label Switching (IP MPLS) WAN connected UCaaS. With IP MPLS, the voice connection receives traffic prioritization, thereby yielding a higher voice quality in terms of packet delay, error and jitter. In addition to costing more, IP MPLS is more complicated to administer and takes longer to install.

The market is now changing. Increasingly, there are direct fiber drops to buildings, making high-speed, duplex connectivity cost-effective (at rates of 100 Mbps and up). With this type of fiber broadband, there is so much capacity that IP MPLS traffic prioritization may not be needed.

The other new market trend is toward SD-WAN, whereby each branch office is connected via two broadband connections (which can be some combination of cable modem, DSL, fiber or 4G/5G [future]). Some SD-WAN options also support IP MPLS. An SD-WAN device is located at each branch office and has the ability to logically fuse the two broadband connections together. Via digital signal processing, the SD-WAN device can take two broadband connections with mediocre quality and deliver a single input connection of high quality (yielding higher quality of service [QoS] to the voice signal). Midsize enterprise application leaders should evaluate networking, in conjunction with UCaaS, to ensure the networking options support requirements for the UCaaS architecture, QoS, application prioritization and overall cost.

Representative Vendors

The vendors listed in this Market Guide do not imply an exhaustive list. This section is intended to provide more understanding of the market and its offerings.

Table 2.   Overview of Respresentative Vendors in the North American UCaaS Midmarket

Bell Canada

CenturyLink

Evolve IP

Intermedia

Jive

Vonage

Windstream

Solution name

Bell Total Connect

(1) CenturyLink Hosted VoIP, (2), Cisco HCS, (3) CenturyLink Government UCaaS

The Evolved Office: UCaaS

Intermedia Cloud Voice (with Skype for Business and AnyMeeting)

Jive UCaaS

Vonage Enterprise

OfficeSuite

Own software stack or third-party stack

BroadSoft BroadWorks

(1) BroadSoft BroadWorks, (2) Cisco HCS (3) BroadSoft BroadCloud

BroadSoft supplemented with internal SIP platform

Internally developed and third party

Internally developed

BroadSoft BroadWorks

Internally developed

UCaaS Provisioning Mode

Multitenant

Multitenant

Multitenant (3)

Multitenant

Multitenant

Multitenant

Multitenant

Multitenant

Multi-instance

Multi-instance (1, 2, 3)

Multi-instance

North America UCaaS Delivery

Canada

Yes

No

Yes

No

Yes

Yes

No

U.S.

No

Yes

Yes

Yes

Yes

Yes

Yes

Network Connectivity Support

Unmanaged broadband (DSL or cable modem)

Unmanaged broadband

Unmanaged broadband

Unmanaged broadband

Unmanaged broadband

Unmanaged broadband

Unmanaged broadband

Managed internet (carrier-grade SLAs)

Managed internet

Managed internet

Managed internet

Managed internet

Managed internet

Managed internet

SD-WAN

SD WAN

SD-WAN

SD-WAN

SD-WAN

SD-WAN

IP MPLS

IP MPLS

IP MPLS (CenturyLink Government UCaaS)

IP MPLS

IP MPLS

IP MPLS

Solution Capabilities

Enterprise voice

X

X (1, 2, 3)

X

X

X

X

X

Web and videoconferencing

X

X

X

X

X

X

X

Multipoint video

X (1, 2, 3)

X

X

X

X

Screen sharing

X

X (1, 2, 3)

X

X

X

X

X

Call recording

X (1, 2)

X

X

X

X

X

Unified messaging

X

X (1, 2, 3)

X

X

X

X

X

Presence and IM

X

X (1, 2, 3)

X

X

X

X

X

Adjacent communications applications

Call center

X

X (1, 2)

X

X

X

X

X

Contact center (voice and multimedia)

X

X (1, 2)

X

X

IVR

X

X (1, 2)

X

X

Clients

Softphone

X

X (1, 2, 3)

X

X

X

X

X

SIP-based

X

X (1, 2, 3)

X

X

X

X

X

Other

X (1, 2, 3)

X — third party

All major

X

Support for mobile clients

Android

X

X (1, 2, 3)

X

X

X

X

X

iPhone

X

X (1, 2, 3)

X

X

X

X

X

iPad

X (1, 2, 3)

X

X

X

X

X

BlackBerry

X — third party

Third-party application integration

Salesforce

X (2)

X

X

X

X

X

Zendesk

X

X

X

Marketo

Box

X

Dropbox

ServiceNow

X

ServiceMax

Okta

SAP

X (2)

X

X

Others

Skype for Business, Microsoft Dynamics, Oracle

X

Office 365, Oracle Sales Cloud, Microsoft Dynamics, NetSuite, Desk.com, Google G Suite, Clio, JobDiva, ConnectWise, Bullhorn, Zoho

Skype for Business, Google G Suite, Microsoft Dynamics, Office 365, HubSpot, Apptivo, 1CRM, Accelo

Industry Compliance Certifications

PCI DSS

X (2)

X

X

X

COPPA

FERPA

FIPS

X (3)

HIPAA

X (1, 2, 3)

X

X

X

X

HITRUST

X

SOC 1 Type 2

X (3)

X

X

X

SOC 2 Type 2

X

X (3)

X

X

X

Bridge Letter availability

GLBA

FedRAMP

X

X

FISMA/NIST 800-53

X (3)

X

X

Top Vertical Support

Vertical 1

Finance

Public Sector

Finance

Healthcare

Retail

Retail

Vertical 2

Government

Retail

Healthcare

Legal

Real Estate

Healthcare

Vertical 3

Business Services

Healthcare

Retail

Finance

Finance

Finance

Subscriber Retention Rate

Monthly retention rate

99.0%

96.40%

99.85%

99%

98.60%

98.80%

99.00%

(1) Hosted VoIP; (2) Cisco Hosted Collaboration Solution (HCS); (3) CenturyLink Government UCaaS
COPPA = Children's Online Privacy Protection Act; FedRAMP = Federal Risk and Authorization Management Position; FERPA = Family Educational Rights and Privacy Act; FIPS = Federal Information Processing Standard; FISMA = Federal Information Security Management Act; GLBA = Gramm-Leach-Bliley Act; HCS = Hosted Collaboration Solution; HITRUST = Health Information Trust Alliance; IVR = interactive voice response; NIST = National Institute of Standards and Technology; PCI DSS = Payment Card Industry Data Security Standard; SIP = Session Initiation Protocol; SOC = Service Organization Control
Note: At the time of publication, Cisco was in the process of acquiring BroadSoft. Pursuant to the agreement, Cisco will pay $55 per share in exchange for each share of BroadSoft, representing approximately $1.9 billion.

Source: Gartner (January 2018)

Bell Canada

Bell Canada competes in the Canadian market with its BroadSoft-based Bell Total Connect solution. Bell has a "sweet spot," serving small and midsize businesses, but it also positions UCaaS in the Canadian large enterprise segment. While Bell Total Connect provides the features most midsize businesses utilize, the offer does not currently support call recording or multipoint video capabilities, although both features are scheduled for near-term release. Bell broadly positions the same UCaaS solution across multiple vertical segments.

Small businesses and midsize enterprises in Canada should consider Bell Total Connect for basic UCaaS functionality. A third-party meeting solution provider may be required for robust collaboration-centric conferencing requirements.

CenturyLink

CenturyLink leverages multiple platforms to deliver UCaaS solutions across the U.S., including Cisco HCS, BroadSoft's BroadWorks and the Metaswitch platform. The platforms offer an array of services and functions, ranging from basic IP telephony and unified messaging functions to file sharing and video/web collaboration functions. CenturyLink's UCaaS solutions can be provisioned in multitenant and multi-instance configurations. CenturyLink has a sweet spot in the small business and lower midsize enterprise segments with its BroadSoft-based CenturyLink Hosted VoIP (featuring fixed-mobile convergence), combined with WebEx meeting capabilities for video, audio and web-conferencing functions. Hosted VoIP became HIPAA compliant in 2Q17, enabling more straightforward service acquisition for healthcare-related organizations. The company has a dedicated Government UCaaS solution (undergoing FedRAMP certifications) for small and large education, and federal, state and local government entities.

U.S.-based midsize enterprises, should consider CenturyLink Hosted VoIP for IP telephony services, especially within healthcare-related industries, government agencies and organizations looking for combined network services.

Evolve IP

Evolve IP positions its Evolved Office: UCaaS with a midmarket sweet spot. The solution leverages the BroadSoft platform, which is supplemented with an Evolve IP SIP platform and Evolve IP's omnichannel contact center controlled by its OSSmosis Portal. The solution supports broad UCaaS capabilities, and provides comprehensive support for third-party applications across the financial, healthcare, retail, insurance and veterinary sectors. Additionally, Evolve IP supports native Skype for Business and Google G Suite integrations, and it positions a full range of network connectivity options to customers, including SD-WAN.

Midsize enterprises across the U.S. — especially those wanting integrated, compliant UCaaS/contact center as a service (CCaaS) — should consider Evolve IP for customizable solutions requiring specific network configurations backed by high SLAs.

Intermedia

Intermedia positions Intermedia Cloud Voice (built on its own platform) and hosted Skype for Business services in the midsize enterprise UCaaS market, with a sweet spot in the small business and lower midsize enterprise segments. Intermedia supports adjacent services including email, archiving, backup, file sharing and security as part of its portfolio. The company does not currently support native third-party application integration. However, developments are underway to offer support for Zendesk, Marketo, ServiceNow and ServiceMax in the future. UCaaS solutions are supported for delivery over unmanaged broadband.

U.S.-based small businesses and lower-end midsize enterprises in the healthcare, legal and finance verticals looking for industry-specific bundles that support the communications, compliance and security requirements of these industries, should consider Intermedia.

Jive

Jive competes in the North American UCaaS market with its native Jive UCaaS platform. Jive sells to midsize enterprises, but it also supports small businesses and large enterprises, including some accounts with more than 15,000 endpoints. Jive supports basic web and video-conferencing, and UM. Jive UCaaS is competitively priced and straightforward with all-inclusive licensing configurations. Jive's legacy verticals are education and the public sector, but the company targets other verticals, too. Key compliance certifications are SOC 1 and SOC 2, as well as FIPS, helping to promote adoption in the financial and U.S. government sectors. The company pursues opportunities across both the U.S. and Canada.

North American midsize enterprises looking for cost-effective UCaaS solutions over their network infrastructure should consider Jive.

Vonage

Vonage's soon-to-be-released upper midmarket UCaaS solution, Vonage Enterprise, is based on BroadSoft's BroadWorks platform (as the underlying softswitch). Vonage Enterprise features MobileConnect, a single client for IM and conferencing on multiple devices and integrated WebRTC-based conferencing. MobileConnect, combined with VonageHub, enables real-time search, contextualized conversations and notification functionality in a centralized application. (See Table 2 for additional features.) Vonage's second midmarket UCaaS solution, Vonage Business Cloud (based on its own software stack), is positioned for small businesses to lower-midsize enterprises. The solution features a mobile client and QoS availability via SD-WAN (branded SmartWAN). Vonage Business Cloud is complemented with support for Amazon Chime and SMS messaging (with Nexmo, the Vonage API [CPaaS] platform). It also supports third-party integrations. Vonage utilizes Nexmo for API development for voice, chat and SMS. The company supports a comprehensive list of compliance certifications and positions its services within specific industry segments, including (but not limited to) retail, real estate and financial services.

U.S.-based midsize enterprises (both lower midsize and upper midsize enterprises) should consider Vonage for industry-specific UCaaS solutions and UCaaS requiring API integration.

Windstream

Windstream supports multiple solutions in the U.S. midmarket, including Metaswitch (obtained with the 2016 EarthLink acquisition) and OfficeSuite following the 2017 Broadview acquisition. These acquisitions, expanded Windstream's U.S. network footprint. In August 2017, Windstream announced OfficeSuite (OS) as its flagship offering, as it also owns the software intellectual property under the Windstream brand. The solution features third-party application integration with Skype for Business, Google G Suite, Microsoft Office and Microsoft Dynamics. The OS solution is packaged alongside Windstream SD-WAN and offered with up to 100% SLAs for availability. Windstream also positions dedicated Mitel and Avaya UCaaS (not featured in this report), and BroadSoft UCaaS. Key verticals for Windstream include healthcare (hospitals, clinics and small healthcare groups); financial services; retail; hospitality; and education.

U.S.-based midsize enterprises, especially those in the healthcare, retail, finance, hospitality and education segments, should consider Windstream if they are looking to leverage high-performance UCaaS capabilities bundled with SD-WAN.

Market Recommendations

Application leaders should evaluate key provider and service capabilities as part of the UCaaS decision cycle:

Vertical

  • Establish your industry-specific security requirements — such as PCI DSS in the retail sector or HIPAA in the healthcare segment — and assess shortlisted providers' UCaaS service compliance. Demonstrated adherence to standards and industry-specific certifications should be an important part of your UCaaS evaluation.

  • Identify third-party applications that your organization currently leverages or plans to leverage over the next three years as part of your larger communications environment. Evaluate provider services in the context of support for strategic applications.

Solution Capabilities

  • Examine the ease of use and intuitiveness of interfaces during the sales cycle. Solutions lacking simplicity will fail to be used across the business. In many cases, failure to leverage companywide solutions will reduce the overall usefulness across the organization.

  • Embrace opportunities to acquire adjacent services as part of your UCaaS contract. In many cases, bundles can include services such as file sharing/file storage, lightweight contact center, networking (such as SD-WAN) and security services (such as monitoring). Bundling can reduce the cost of acquisition (compared to stand-alone services), provide simpler billing and provide a more seamless user experience.

Networking Support

  • Seek providers whose services align with your networking preferences. Directionally, managed internet and SD-WAN will increasingly be considered superior over broadband and IP MPLS.

Budget

  • Assign monetary values to features offered as part of bundled suites. Even though some elements might not have an associated price tag, this activity will enable cost comparisons across providers and services.

  • Leverage promotional campaigns and volume discounting to negotiate service prices. Service extension to organizations with more than 500 users should receive, on average, 20% to 30% price reductions on a per-user basis compared with organizations with only 50 users.

Third-Party Platform Evaluation

  • Investigate underlying third-party platform providers as part of your evaluation. Changes with the platform provider and its commitment to long-term platform developments can significantly impact your provider's service delivery capabilities.

Team-Centric or Organizationwide Communications Functionality

  • Assess your organization's approach to UCaaS solution functionality and ensure voice capabilities offered through WSC solutions to meet requirements for enterprise-grade capabilities.

  • Explore the centrality of team-led or project-led communications services within your business. Some organizations (for example, professional services, healthcare, high-tech and financial services groups) might experience greater benefits from team collaboration approaches compared with users in the education or retail sectors.

Evidence

Gartner's Annual Enterprise Survey Title

Gartner's Annual Enterprise Survey is based on a Gartner study conducted in six countries: Brazil (n = 500), China (n = 500), India (n = 500), France (n = 500), the U.K. (n = 500) and the U.S. (n = 500). The research was conducted online from September to December 2016 to gather content and help Gartner build its forecasts for the following areas:

  • Business process services

  • Software

  • Data centers

  • Devices

  • Unified communications

  • Enterprise communications services

Respondents answered the content areas in which they were more knowledgeable. For the unified communications section, 948 organizations were surveyed.

Quotas were established for vertical and employee size for each country, using Gartner published vertical and size-of-business forecasts. The results were then weighted to be representative of the business universe in each country.

The survey was developed collaboratively by a team of Gartner analysts that follow the IT market, and it was reviewed, tested and administered by Gartner's Research Data and Analytics team.