The Unified Communications Market: What Are Its Key Drivers?


Jan. 9 2016, Updated 1:05 p.m. ET

Huge growth expectations

Previously in this series, we discussed Microsoft’s (MSFT) recent acquisition of Talko in the UC (unified communications) space. We also discussed how leaders Cisco Systems (CSCO), Microsoft, Avaya, and Mitel Networks are following the acquisition route to strengthen their standing in the UC space. IDC Research expects the UC market, which was $26.2 billion in 2014, to grow to $38 billion in 2016. Transparency Market Research estimates that the UC market has the potential to reach $61.9 billion by 2018.

Verizon (VZ) is a leading company in IP (Internet protocol) and data services, whereas CenturyLink (CTL) is another company in voice, transport, and fiber services.

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Growth drivers in the UC space

John Howard, director of Unified Communications & Collaboration for EMEA (Europe, the Middle East, and Africa) at Logitech, thinks that trends in the mobile space are urging enterprises to adopt UC technologies. Mobile workforce and BYOD (bring your own device) trends have urged companies to evaluate the options that UC platforms could provide. Mobile UC and BYOD technology enable remote work, spur-of-the-moment meetings, and mobility across all departments.

Growth in mobile apps and increased connectivity are expected to drive growth in the UC space. Startups such as Talko and Slack, which provides real-time messaging, show foresightedness.

Investors who wish to gain exposure to Microsoft could consider investing in the iShares Russell 1000 Value ETF (IWD). While IWD invests 2.0% of its holdings in Microsoft, it also has an exposure of 3.4% to application software.


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