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What Is UCaaS (Unified Communications as a Service)?

What is UCaaS (in a sentence)?

What is UCaaS? “Unified Communications as a Service” is a cloud-based solution model for all a business’ communications applications. This will typically combine tools like email, video conferencing, instant messaging, and more into a fully-mobile suite that can be accessed from any device.

The Meaning of UCaaS in Business

Unified Communications as a Service (UCaaS) has been receiving a lot of attention recently in light of recent events.

As businesses scramble to get to grips with what it means to organize a remote workforce, many are left unprepared.

63% of company departments have at least one person who works remotely for a significant amount of time, but 57% of businesses have no formal work-from-home policies

The global market for UCaaS was already surging as cloud computing becomes more ubiquitous in the business world, but now there is an even greater need for UCaaS services.

UCaaS communications is a technology that harnesses cloud-based services to streamline enterprise communications.

The “unified communications” refer to the vast number of channels businesses use to exchange information, such as:

  • Voicemail
  • Chat
  • Email
  • Web, audio, and video conferencing
  • Telephones

The “as a service” part denotes the unique software that eliminates the need for full IT staff or intricate IT infrastructure, by allowing enterprises to run their businesses from anywhere in the world at all times.

But UCaaS is more than an exchange of information.

Among other things, it’s a way to increase efficiency by increasing your ability to utilize instant communication in your business processes.

It improves mobility across departments and satellite locations, and it helps to integrate external software in a smooth and consistent manner.

And that’s just the beginning of what UCaaS communications can help your enterprise achieve.

Unified Communications as a Service (UCaaS) vs. Voice Over Internet Protocol (VOIP)

VOIP helps organizations increase cost savings on voice communications by providing an inexpensive alternative to traditional, landline phone services.

It is implemented through your internet service provider (ISP) using a special adaptor.

Staff then use headsets or softphones to make calls and access features such as caller ID, call waiting, forwarding, blocking, and voicemail.

A UCaaS system, however, delivers collaboration tools such as instant messaging, video conferencing, file sharing, and more through an agreement with a United Communications enterprise. In short, VoIP is just one small part of what would now be a more comprehensive package.

While a VoIP cloud service may have been sufficient for businesses in the past, a UCaaS solution is a better fit for the communication needs of today.

The vendor will install relevant infrastructure and/or cloud resources, depending on the tools you need.

Features of UCaaS Communications

With a variety of collaboration services available to facilitate communication using a cloud-based delivery model, UCaaS offers decision-makers a variety of capabilities to enhance intra- and inter-business communication.

  • VoIP for telephony
  • Video conferencing to facilitate remote workers and off-site teams
  • Enterprise mobility through mobile accessibility
  • Instant messaging for real-time communication
  • Communications platform as a service (CPaaS) for real-time cloud-based communications
  • Customer relationship management to analyze data and improve customer relationships and interactions
  • Contact center features that allow customers to access assistance through chat, messaging, email, etc.

These features help provide business agility, a key factor and primary concern for organizations as they navigate the waters of digital transformation from long-standing legacy systems.

functions of ucaas

Why Are More SMBs using UCaaS?

Traditional office spaces are being disrupted by an increase in mobile and remote workers and trends toward bring-your-own-device (BYOD) policies in the workplace.

These two factors alone require that an enterprise’s communications system function across a wide variety of platforms while ensuring data is safe and secure—a primary reason more SMBs are shifting toward this technology.

In addition to the improved efficiency that can result from streamlining communications systems into one platform, UCaaS provide a way for businesses to achieve a high level of cost savings.

Communication barriers cost the average organization $62.4 million per year in lost productivity

As an advanced technology, UCaaS systems operate more efficiently—and cost-effectively—than more traditional communications models, saving money and increasing productivity.

Of course, that increased productivity means employees are getting more work done faster, and that can lead to significant increases in revenue.

Finally, smoother communications translate into a better customer service experience, giving your organization the ability to meet or exceed consumer demands for a competitive advantage.

UCaaS Market and Where It’s Heading

After a pandemic-dominated 2020 and the first half of 2021, businesses have had to adapt to new ways of working and to do so adopt technology like UCaaS systems.

Naturally, the biggest change by far was the simple fact that the vast majority of the population was consigned to their homes under lockdown restrictions.

This of course meant that organizations had to adapt to this widescale change—especially as regards the communications barriers that arose—and roll out solutions to allow their workforces to continue operating effectively.

In most cases, the priorities were focused on communication tools like Zoom and Microsoft Teams to solve these issues.

Related Post: Infographic: Teams vs Zoom vs Slack

What may be of interest is the continuing investment that businesses are pouring into UCaaS solutions, borne out of both necessity and the benefits that have been garnered by companies implementing them.

In IDC’s March 2021 report on the worldwide Unified Communications & Collaboration market for 2020, they found that investment in UCaaS platforms had soared.

By their calculations, the market as a whole grew 24.9% over the course of 2020 to $47.2 billion.

Fastest-growing solutions

  • Hosted Voice/UC Public Cloud (UCaaS) grew 26.1% year over year and 6.8% sequentially in 4Q20 to nearly $4.6 billion in revenue. For the full year 2020, public cloud UCaaS revenue increased 21.2% to $16.4 billion.
  • UC Collaboration (including video conferencing software and cloud services) increased 48.0% year over year and 5.1% sequentially to reach almost $6.2 billion in revenue in 4Q20. For the full year of 2020, UC Collaboration revenue increased 45.0% to $22.1 billion.
  • Revenue for IP Phones declined 20.4% year over year but grew 20.3% sequentially in 4Q20. For the full year of 2020, IP Phones revenue declined 22.8% to $1.9 billion. Shipments of IP Phones declined 23.1% year over year but increased 14.7% sequentially. For the full year of 2020, shipments of IP Phones were down 22.2%.
  • Enterprise Videoconferencing Systems (i.e., videoconference room endpoints) surprisingly increased 26.1% year over year and 36.5% sequentially to more than $827 million in 4Q20. For the full year of 2020, revenue increased 12.4% to almost $2.6 billion.

Source: IDC

Cloud UCaaS Systems Leads the Way

By IDC’s estimates, it’s very much the public cloud UCaaS market that’s leading the way as far as business communications solutions go.

As businesses become more comfortable with the cloud, largely as a result of the much-improved security, scalability, and affordability, they’ve taken to using the public cloud extensively to support their tech stacks.

Communications platforms make up a significant part of this and it shouldn’t come as too much of a surprise that the result is companies spending big on platforms like Teams and Slack.

Related Post: What Slack’s $28 Billion Deal Means for Cloud Services

As these platforms continue to grow, we can expect to see further integration between communication and collaboration apps, and indeed Salesforce’s purchase of Slack is an indication of how large operators in the space are looking to tie in all their services (like UCaaS and ERP) together into a single platform offering.

Don’t be surprised if the consolidation of UCaaS communications and other software solutions continues in the future as providers look to amalgamate their services.

UCaaS: Security & Compliance

There’s no doubt that cybersecurity is a major concern for SMBs, particularly after a tough 2020 where attacks have increased to levels never seen before.

It should come as little surprise that 2020 has been a benchmark year in terms of cyberattacks. Estimates indicate that more data records had been breached in the first six months of 2020 alone than any other year on record.

With nearly half of all cyberattacks aimed at them, savvy small businesses are always looking for ways to tighten security and increase data protection.

However, now that more data is being kept in cloud-based systems, there’s been an increase in the technological development of security protections specifically designed to minimize the risks of hacking, DDoS attacks, malware, and more as they relate to data in the cloud.

Things to look for in a good UCaaS system include:

  • A secure data center for strong physical security, power redundancy, and disaster recovery
  • Data encryption to prevent eavesdropping and hacking
  • Encryption or protection of communications in the form of calls and messages
  • Robust network security
  • Controllable and monitored account access and administration
  • Periodic updates, upgrades, and patches

As an example, Microsoft Teams provides a framework that allows enterprises to allow first- and third-party services into the team environment for a full-features collaborative experience.

However, they also provide data encryption along the entire communication route, as well as supporting key compliance standards for both North America and the European Union.

Why is it Important for Modern Businesses to Have Good Communication?

When interdepartmental communications break down, information, processes, priorities, and tools aren’t shared among departments—a process known as “siloing.”

This process has a measurable impact on operations, reduces morale, and can have a negative impact on culture and revenue.

Healthy cross-department communication is essential for businesses looking to undergo a culture shift through successful digital transformation.

Unifying connections among departments can keep everyone on the same page, increase efficiency and productivity, encourage collaboration, and improve morale.

ucaas global market growth

Communications such as email newsletters, accessible and modifiable meeting schedules, employee feedback, and team-monitoring solutions like Microsoft Teams all assist in building a strong, unified working culture.

UCaaS is for Every Level in Your Organization

Everyone in your office can benefit from having a universal communications system that isn’t constrained to one department.

Support and call center staff can leverage reporting and analytics to improve response time and quality.

Outside sales will appreciate the ability to have real-time information at their fingertips to close deals more effectively and stay in close contact with leads and other team members.

Onsite staff can easily transition from a mobile phone to a desktop computer with the press of a button.

The ability to organize call groups and paging groups, chat with teammates through a web portal, or set up dedicated number-based conference calls makes collaboration simple.

A UCaaS solution is as much about opening up communication channels for every employee in an organization as it is getting a shiny new messenger platform. Whether it’s easier cross-department communication or making employees in the field a platform to take with them in their pocket; its uses are pervasive.

Benefits of Utilizing a UCaaS Solution

UCaaS assists companies in overcoming communications challenges by streamlining processes, both internally and externally.

Distilled down to the three most obvious benefits for the stakeholders—businesses, their employees, and their customers—the principal benefits of UCaaS solutions include:

1. Flexibility

UCaaS communications allows employees to work in any location—in the office or remotely—and have access to all pertinent data they need to do their job 24/7.

Not only does this increase the agility of your enterprise, but it boosts productivity and morale.

31% of companies are keen to use UCaaS to shed technical debt from legacy systems and processes.

Of course, in light of the events of 2020 and the continuing pandemic, organizations have been forced to take their operations outside the office and put into place remote work policies so they can continue working.

While many are back in the office, many workers are still at home, and uncertainty surrounding the future of the pandemic is an important consideration.

In times of uncertainty, businesses with a UCaaS platform are able to effortlessly shift their working circumstances without losing operational functions.

It’s also worth noting that remote work, regardless of the pandemic, was something that was seeing increasing popularity in any case, and many employees want to see progressive tech solutions that meet these modern expectations.

Prior to the pandemic, 63% of company departments had at least one person who works remotely for a significant amount of time, but 57% of businesses had no formal work-from-home policies.

2. Productivity

Productivity is improved when UCaaS is engaged to increase the speed and effectiveness of communication among departments, between individuals, and with customers.

Objectives are accomplished more efficiently through enhanced communications that keep data within reach at all times.

Cisco estimates that 75% of UCaaS users experience better productivity when working in a business across multiple sites.

Productivity naturally sees the biggest boost in organizations where employees are not necessarily working in the same office. Without a platform that can help them communicate and share data and information in an instant, it’s a lot more difficult to operate in an effective way.

34% of businesses have reduced IT spending by an average of $161k a year by eliminating redundant apps and shifting to cloud-based unified communications as a service (UCaaS) solutions.

It’s also worth considering the effect that implementing a UCaaS platform has on your IT team. While IT departments are typically used to putting out fires, businesses are often finding that transitioning to a cloud-based suite frees up the need to host servers and more importantly frees up time for IT employees.

These employees can then be (and often are) allowed to redirect their efforts more towards supporting business operations rather than solely IT support.

3. Collaboration

Finally, robust communication tools help employees collaborate more effectively, resulting in a positive and collaborative culture and, ultimately, a better experience for your customers as well.

We’ve spoken about how opening communications channels between all departments is a key advantage of having a UCaaS solution. This is also a key advantage when it comes to collaboration between employees.

When we talk about collaboration in this regard, we mean the freeing up of data siloes and ease of access with regard to information.

Data that was previously inaccessible from one department to the next is now a lot easier to exchange, creating an environment in which information can be utilized to a much greater extent than a legacy communications system can offer.

Forrester reports that between 60% and 73% of all data within a business goes unused.

So, it’s not only important that businesses take advantage of the communication aspect of UCaaS, but also their ability to make more actionable use of the mountains of data that exist in any given business.

Key Takeaways

  • UCaaS offers significant benefits to SMBs looking for ways to improve their communication structures
  • As an advanced technology, UCaaS systems operate more efficiently—and cost-effectively—than more traditional communications models, saving money and increasing productivity
  • There are benefits from UCaaS at every level of business, including cross-departmental communications
  • UCaaS increases productivity, flexibility, and collaboration for a better corporate culture, improved customer relationships, and increased revenue while keeping costs to a minimum

In Conclusion 

UCaaS offers significant benefits to SMBs looking for ways to improve their communication structures. As an advanced technology, UCaaS systems operate more efficiently—and cost-effectively—than more traditional communications models, saving money and increasing productivity. 

UCaaS increases productivity, flexibility, and collaboration for a better corporate culture, improved customer relationships, and increased revenue while keeping costs to a minimum 

Learn more about the main reasons that all SMBs should be utilizing a UCaaS system today.