Worldwide UC&C revenues grew 7.2% in Q1 2023

Worldwide revenues in the Unified Communications & Collaboration (UC&C) market grew 7.2% year over year to $15.4 billion in the first quarter of 2023 (1Q23), according to the International Data Corporation (IDC) Worldwide Quarterly Unified Communications and Collaboration Tracker. For the full year 2023, worldwide UC&C revenue is forecast to grow 8.2% year over year to $64.2 billion. In volume terms (units/lines/licenses/seats), the worldwide UC&C market grew 7.7% year over year in 1Q23 to 587.6 million. The slightly lower growth rates in revenue compared to volume indicates continued downward pricing pressure per unit sale.

“Businesses continue to increasingly invest in cloud-based UC Collaboration and UCaaS (including telephony) solutions, while moving away from strictly hardware-based, premise-based IP PBX/UC systems,” said Jitesh Gera, research manager, Unified Communications and Collaboration at IDC. “Anything that provides more communication flexibility and interoperability at a lower cost has buyers’ attention. Interoperability and integration are key for the success of videoconferencing systems and cloud-based UC collaboration vendors, and equally key for their clients’ outcomes as well. The benefits that a cloud-based approach brings only increase with the AI capabilities being rolled out, handing enterprises the keys to drive value across their business quickly and cost-effectively.”

Meanwhile, worldwide revenues in the Communications Platform as a Service (CPaaS) market grew 10.2% year over year but declined 3.5% sequentially to $3.6 billion in 1Q23 due to economic uncertainty and an elongated sales cycle. CPaaS includes messaging, voice, video, and email as some of the key segments. As of 1Q23, messaging accounts for the largest share of CPaaS revenues at 67%, while voice accounts for 15%. For the full year 2023, CPaaS revenues are expected to grow 13.3% year over year to $15.7 billion. IDC