Disruption Discussion: Cloud Communications + Unified Communications

Published March 07, 2016 by Tony Jamous

In the past, I have shared how Nexmo is growing at significant strides. In this new Disruption Discussion series, I’ll share the larger trends that are driving our growth, how we see different markets and technologies evolving over time, and where cloud programmable communications will lead us. 

At Mobile World Congress (MWC) carriers and handset manufacturers are typically the focus. However, over the years, we’ve been seeing more Unified Communications (UC) players participating. At least from a cloud communications perspective, we have been seeing our world get closer to UC for a while now. When I brought this up to other MWC attendees, I got some inquisitive looks, which motivated me to explain my views here.

Why Unified Communications?
The term “Unified Communications” has been around for nearly decades, often referring to the combination of PBX, email and instant messaging. But as workforces have become increasingly mobile by default, UC vendors have aggressively developed and added new capabilities to their existing suites to support mobile users. In our case, we’re seeing more vendors getting involved in messaging, data and voice support. Collaborative and real-time software like Slack are also introducing new communication channels that, wholistically, are creating a lot of potential growth in the mobile UC market.

We’re not the only ones seeing growth here – IDC estimates total revenue from this space to grow from $511.8 million in 2014 to $1,486 million in 2019 (a total market CAGR of 23.8%).

What is driving this growth? Well, the way people communicate is getting complicated: the number of channels people use to communicate is increasing very quickly, people expect to do more with their communications, and they expect higher quality from these solutions. In short, the ways people communicate is growing beyond a single UC player’s ability to service, while a lot of innovative solutions are coming from cloud computing. I know this is a wide-sweeping statement, so I’ll specify where we come in.

APIs and SDKs are the New Yoga
Traditionally UC vendors have been walled garden solutions, but we are seeing them open their solutions with APIs and SDKs, and are becoming more flexible and nimble.

UC vendors understand their solutions must be more flexible to address the various ways their customer’s workforce is communicating. UC vendors must support an ever growing list of technologies while simultaneously supporting legacy hardware. Enhancing mobile collaboration among business units and reducing annual hardware-associated spend poses a problem that APIs and SDKs are uniquely positioned to solve.

In a recent conversation with my friend, Mark Winther of IDC, he captured why in a very precise way. He said, “APIs and SDKs are the most flexible software that exists – they are completely customizable for the customer and are built from the ground up to be easily integrated with existing solutions. By opening up to APIs and SDKs, UC vendors are able to much more quickly support new features, platforms and channels than building them internally.”

I completely agree, and this results in two significant shifts for UC vendors:

  • They empower customers to create custom solutions they need, increasing their customer base while avoiding feature sprawl
  • They significantly increase their pace of product innovation while creating faster sales cycles

Unifying Unified Communications
Not only are people using more ways to communicate, they expect to be more productive with communications solutions. This requires UC vendors to deliver a consistent experience across their expanding solutions. IDC agrees, saying vendors “should work to ensure a consistent experience across devices and applications users can enjoy common experiences (such as meetings or conferences) across platforms regardless of their mobile client or communications modality.”

Here’s where APIs and SDKs benefit both the UC vendors and their customers:

  • APIs and SDKs are much easier to customize and integrate with customers’ existing solutions than a lot of UC software
  • UC vendors can integrate existing solutions without having to rewrite unfathomable amounts of legacy code

Also, while UC has traditionally been used for internal communications, we are seeing a growing need for consistent UC for business-to-customer communications. More customers are expecting to be able to communicate with companies through any channel necessary – be it through SMS, voice, chat apps – I’ll explain this trend in another post because it’s pretty significant in it’s own right.

Looking ahead: We’re not Replacing UC, We’re Revitalizing it
So, is this the death of traditional UC vendors? Absolutely not. We see our software working in tandem with legacy solutions. Like I explained earlier, APIs and SDKs are easy to integrate into existing products, allowing UC vendors to continue offering legacy solutions.

Simultaneously, our software is making the established players even more appealing to developers, similar to how we are making the telco carriers more appealing to new companies like Airbnb, BlaBlaCar and WeChat.

And because software is global by default, this will allow UC vendors to easily address markets all over the world and adjust accordingly in each region.

So we see cloud communications revitalizing the UC space, and serving as a catalyst for growth and innovation. And with every year at MWC, I see more UC vendors getting involved as their world becomes inherently more mobile.

Do you see the same thing or something different in the space? I’d love to hear your thoughts. Stay tuned as I share more of our perspectives on how cloud communications is changing markets and challenging the status quo.