Cisco, with a dominating lead in sales of on-premises solutions, was the top vendor in the overall collaboration technology market in the fourth quarter (Q4) of 2016, according to the latest data from Synergy Research Group. In total, the market attracted just over $9 billion in revenue during the quarter.
Microsoft took second place while IBM and Avaya battled it out for third. Although IBM emerged victorious in Q4 2016, Avaya claimed bronze for all of 2016.
"Overall the market value was again close to an all-time high and Cisco's market share increased for the third consecutive quarter," said John Dinsdale, a chief analyst a Synergy, in a research note sent to Datamation. "However, those disruptive vendors are shaking up the market, with many new cloud-based applications gaining traction in the small office environment and likely to now penetrate mid- to high-end enterprises."
Those disruptors are already having a measurable impact on the market. Sales of hosted and cloud-based collaboration solutions jumped nine percent during the quarter on an annual basis. Meanwhile, revenue from on-premises systems dipped four percent.
"Collaboration continues to be a somewhat fragmented market that is characterized by a long list of disruptive and high-growth companies, with no less than 15 companies achieving full-year growth rates in excess of 20 percent," observed Synergy founder and chief analyst Jeremy Duke. "That level of growth is certainly not matched by the market leaders, with the top 10 companies in aggregate seeing their revenues actually decline somewhat in 2016."
Among the fastest growing segments is team collaboration, improving the fortunes of Cisco's own Spark platform and Slack, noted the research firm. On March 14, Microsoft jumped into the fray by releasing Teams, a team collaboration product for Office 365. Included in select Office 365 plans, Teams provides a Slack-like chat experience that integrates with the software giant's market-leading Office productivity software and cloud services suite.
The contact center as a service (CCaaS) segment is also on the upswing, giving vendors like Five9, Genesys/Interactive Intelligence and inContact a boost. Finally, video as a service (VaaS) like BlueJeans and Zoom are also enjoying the perks of increased adoption.
"Looking ahead we see that new cloud-based applications will continue to disrupt traditional business communication systems, creating strong opportunity for new cloud-based solutions," Duke concluded.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.