Has Microsoft Teams Won The UCaaS War?
With now over 300 million monthly users, even the most anti-Microsoft industry commentator will find it hard not to concede that Microsoft Teams is doing rather well.
The unified comms market as we know it has changed considerably since the coronavirus pandemic. Through fortune, yes, but also through canny product strategy, Microsoft Teams is the undisputed leader in UCaaS right now.
Might this change moving forward? It’s hard to say.
Those fully on board with Microsoft domination suggest Microsoft has already won the battle for UCaaS supremacy.
One anonymous commentator said, “It’s too late for anyone else. Microsoft has already won.”
Microsoft to decouple Teams from Office 365
This was in response to the recent suggestion that Microsoft may be forced to decouple Teams from Office 365.
Those embedded and committed to the Teams community don’t appear worried.
This news stems from the potential to avoid an EU antitrust investigation.
And it’s a similar tune to when Slack filled an official complaint in 2020. Its claim was that Microsoft’s bundling of Office and Teams was “illegal and tied Teams into its market-dominant Office suite to force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers”.
Whether this will prove to be a deterrent to continued and further Teams adoption remains to be seen.
The question, it seems, is whether Teams will be the total platform for UCaaS or whether there will be underlying PBXs, calling providers, and other various integrations in the mix.
Dom Black, Research Director at Cavell Group, says the following about the future of the UCaaS market:
"Voice adoption within Microsoft Teams has been growing at a significant rate, and over the next five years, Cavell forecasts that Microsoft will have around 35% market share of the UCaaS market. Although Microsoft is winning in the large enterprise, we do not see voice enablement being as strong in the SME segment, where collaboration is not as relevant to the majority of small businesses.”
Is Microsoft winning calling, UCaaS, or collaboration?
The distinction between voice, UCaaS, and collaboration is a blurry one.
On one hand, everyone in a business might use Teams for meetings and chat. But calling is taken care of behind the scenes.
Microsoft has opened the door to integration and interoperability with three calling options:
Teams Calling Plan
This is a clear sign that working with existing calling providers is part of the wider strategy. And recognition that UCaaS and/or collaboration remains an integrative experience.
That in itself shows a clear route to market for some providers in the UCaaS market. We even see Cisco, a long-term direct competitor, as certified partners for devices, contact center, and direct routing.
The strength of the UCaaS market
We must also consider the undeniable wealth of choice in the UCaaS market. The number of unified comms providers seemingly grows every day.
Sure, there are clear leaders in the Gartner Magic Quadrant and other research areas. But, those who specialize in custom areas will continue to thrive until Microsoft decides to eat their lunch.
There are also niche use cases like finance and legal, where the desire and incentive to move to cloud is less so.
In these industries, the storing and moving of data from on-premises to cloud is a major deterrent. With no focus on on-premises, Microsoft will find it hard to penetrate these markets.
We can make a similar case for frontline workers like on naval vessels and oil rigs. While there is no doubt collaboration technology is needed here, Teams is still not the obvious choice. Intranets and offline resources play a major factor—factors where Teams is less strong and/or has too many options to do the same thing.
Then factor in those who don’t or won’t use Teams for chat because they have a superior experience in an in-house tool, or are tied to a chat-first app like Slack or Twist.
If you’ve ever tried to get a hardened Slack user to migrate to Teams, you’ll know what I’m talking about.
legit told a recruiter no once as soon as the invite they sent over was for teams— Alex Torres (@alex_g_torres) December 16, 2021
Decoupling Teams = wider addressable market for competitors?
The question for customers changes from…
“Do we want to use Teams because it’s free and already installed?”
“Is Teams the right choice, given the strength of UCaaS options in the market?”
With 300 million monthly active users and counting, it does feel like the ship has sailed for the removal of free Microsoft Teams for Office 365 users.
But we mustn’t forget those with other UCaaS apps in play.
Through personal preference, shadow IT, and don’t forget when everyone started using their own apps when they suddenly started working from home, communications apps in use are all over the place.
Generally, the bigger the business, the more apps in use that perform extremely similar functions.
In conclusion, Microsoft is performing extremely well in the UCaaS market.
Its rate of adoption and market penetration is likely to continue unless the decoupling of Teams from Office 365 impacts businesses in a way that most Teams enthusiasts dismiss as nonsensical.
But stranger things have happened…we can attend Zoom meetings in our cars now, after all.