What is collaboration?
Collaboration helps individuals work together and achieve a common business purpose. It can be synchronous, wherein everyone interacts in real time online meetings, instant messaging, and video conferencing, or it can be asynchronous, wherein interaction can be time-shifted. Examples of this would include document uploading, shared workspace annotations, or contributions to websites.
Major players in the collaboration business
According to Synergy Research Group, Cisco Systems (CSCO) is the market leader in the collaboration segment, with over 16% share. Microsoft (MSFT) and Avaya follow, with 13% and 4%, respectively, as of the end of 4Q15. Cisco’s overall market share is now at a two-year high, because revenues from hosted or cloud solutions have exceeded those of premise-based collaborations for the fourth consecutive quarter.
Microsoft continues to lead the hosted or cloud collaboration space. Cisco, Verizon (VZ), Google (GOOG), and Citrix follow—in that order. The total collaboration market grew 4% YoY (year-over-year) in 4Q15. Total revenues in the collaboration market—which includes enterprise voice, UC applications, email software, enterprise content management, telepresence, and a range of hosted or cloud communications and applications—rose by over $9 billion in 4Q15.
Specifically, revenues from hosted or cloud solutions continue to rise, with a 10% YoY growth in 4Q15, while revenues from premise-based systems fell by 3% YoY in 4Q15. Notably, Microsoft accounts for 11% of the Technology Select Sector SPDR Fund (XLK).
In the next part, we’ll analyze the key growth drivers of the collaboration market.