Many Cautions for the 2017 Gartner Magic Quadrant for Unified Communications as a Service (UCaaS MQ), Worldwide

Gartner published the 2017 UCaaS MQ on September 6, 2017. The themes and trends are very similar to the 2016 UCaaS MQ. However, the 2017 UCaaS MQ seems to concentrate on the requirements of world-wide customers working with major service providers.

Other types and sizes of organizations may find the vendor inclusions and rankings would be very different based on their own requirements and may also find highly suitable suppliers who are not considered in this report. A few examples of organizations that may not be served by this UCaaS MQ include governmental agencies, transportation firms such as railways, regional retail and distribution firms, healthcare delivery systems, real estate and construction-related firms, and organizations with 1,000 or fewer employees.

A review of this UCaaS MQ in the context of the actual requirements and bidding situations that we and our consultant community peers are seeing brings out the following seven areas for caution and adaptation related to the 2017 UCaaS MQ.

1. Emphasis on worldwide delivery capability. To be considered for the UCaaS MQ, a vendor must be “a global UCaaS platform provider that has developed its own proprietary software stack…” or “a global service provider or system integrator selling UCaaS based on a third-party UCaaS platform.” This emphasis on global scope eliminates qualified service providers and platform providers who are not delivering in all global regions, i.e. at least North America, Europe, and Asia/Pacific. If your organization requires delivery in only one of these regions, you may want to seek a regional provider who does not have the costs and overheads of maintaining global operations.
    
2. Tailored for Gartner’s large enterprise, multi-national clientele. Of course, a Gartner report is written, first and foremost, for the subscribers to Gartner services. This is certainly a factor in the worldwide focus of this UCaaS MQ. The large enterprise profile of many Gartner subscribers may also influence both the selection criteria and the scoring of the vendors against the criteria. If your organization has less than 1,000 employees, you may wish to balance this UCaaS MQ with some proactive reference checking with peer organizations in your size range, region and industry.
    
3. Conflicting messages regarding multitenant vs. multi-instance. This UCaaS MQ considers UCaaS in two formats: multitenant, “in which all customers share a common (single) software instance,” and multi-instance, “in which each customer receives its own software instance.” However, Gartner also says that, “Larger businesses (more than 1,000 employees) have traditionally preferred a separate software instance…” Four of the six vendors in the “Leaders” quadrant are service providers that are hosting multi-instance versions of UCaaS software, typically Cisco HCS, Microsoft Skype for Business Server (SfBS), or Broadsoft BroadWorks platforms. However, the multi-instance approach is essentially the hosting of an on-premises system in a service provider’s “cloud” datacenter. By contrast, much of the innovation in the UCaaS market is being provided by the multitenant software solutions and vendors that are not constrained by the requirements of an on-premises system. If your organization is seeking the innovations of UCaaS rather than just the outsourcing of operations to a UCaaS service provider, be sure to consider direct UCaaS subscriptions with the multitenant providers.
    
4. Mixed messages related to UCaaS software producers vs. UCaaS service providers. In addition to the bias of UCaaS service providers towards the multi-instance solutions (see 3 above), most of the UCaaS service providers in this UCaaS MQ produce only small portions of their revenue from UCaaS. Seven of the fifteen vendors are primarily operators of telephony and/or data networks. UCaaS pricing and service levels from these companies may depend heavily on whether your organization is also a major customer for their network services. On the other hand, while it may be attractive to subscribe to UCaaS from a multitenant software vendor for whom UCaaS is their primary business and from whom innovations may flow more quickly, those vendors may not have the long-term operational experience of the service providers. Thus, care is recommended in choosing between UCaaS service producers and service providers.
    
5. Lack of clarity on the value of UCaaS software ownership by UCaaS vendors. Subscription to UCaaS from a vendor that does not produce or “own” the software for the UCaaS service offering adds at least one more level of intermediary between the end user organization and the producer of the functionality on which the organization and its employees will depend. This may be a major problem if (a) the requested or required innovations are not a priority of the UCaaS service provider; (b) the UCaaS service provider chooses to not to offer some features due to operational costs; or (c) software fixes or updates are not scheduled on a timely basis by the UCaaS service provider. If your organization is considering proposals from UCaaS vendors that do not directly produce or “own” the software, be careful to set the proper expectations and to include the appropriate contract terms and conditions to assure your organization will not be disadvantaged in delivery of core products and services to your clients, customers or constituencies.
    
6. Little guidance as to how this marketplace will sort out. Gartner appropriately notes that “IT application leaders must evaluate a fragmented UCaaS landscape…” Gartner lists another ten “notable” UCaaS vendors in this report. A recent prior UCaaS MQ noted there were as many as 250 UCaaS vendors now in the worldwide marketplace. Surely, consolidation is expected as the better UCaaS vendors drive out the weaker vendors. This will likely occur both in the UCaaS platform provider and the UCaaS service provider categories. It may not be practical nor competitive to ‘wait it out,’ so your organization may wish to make contingency plans through both contract terms and vendor management to enable a flexible response if your selected UCaaS vendor were to change status during the term of your UCaaS subscription with them.
    
7. No weighting on co-existence with or migration from on-premises systems. While last on the list, this factor may be the most important. Even if your organization were to plan to move to UCaaS over a weekend, a major migration will be required from your current on-premises PBX system. More likely, the migration to UCaaS will proceed over a period of several years, during which time the UCaaS system may need to co-exist with your on-premises communications systems. The co-existence can be very simple (i.e. just calling from directories) or may be complex (e.g. connecting the UCaaS system to your on-premises audio and video conference rooms). Further, the UCaaS service may need to conform with your organization’s policies for security, identity management, single sign on, regulatory compliance, and more. Be diligent in planning for the migration and co-existence aspects of UCaaS.

In summary, the Gartner 2017 UCaaS MQ provides a marketplace view that is relevant for large, multi-national firms. Care and caution are appropriate if using this UCaaS MQ when considering a UCaaS commitment, especially if your organization is different from a typical large, multi-national firm.