Worldwide revenues in the Unified Communications & Collaboration (UC&C) market grew 6.9% year over year and 2.4% sequentially to $15.9 billion in the second quarter of 2023 (2Q23), 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 8.6% year over year to $64.7 billion. This represents an upward revision of roughly $500 million from the previous quarter's forecast. In volume terms (units/lines/licenses/seats), the worldwide UC&C market grew 11.4% year over year and 2.9% sequentially in 2Q23 to 620.7 million. Compared to the previous quarter, the gap between value and volume growth rates expanded further, indicating continued downward pricing pressure per unit sale.

"Remote collaboration needs continue to grow and evolve with the changing dynamics led by the return to work, coupled with new innovation from vendors, especially on the AI front," said Jitesh Gera, research manager, Unified Communications and Collaboration at IDC. "Moreover, public cloud Unified Communications as a Service (UCaaS) solutions integrated with telephony continue to be in strong demand as businesses increasingly look to unify their employee and customer communication channels with a strong foundation in voice. The hardware market is currently in flux, as vendors look to develop innovative meeting room equipment to offset the sharp declines in IP telephones and enterprise videoconferencing systems."

Meanwhile, worldwide revenues in the Communications Platform as a Service (CPaaS) market grew 13.2% year over year and 4.6% sequentially to $3.8 billion in 2Q23, recovering from a sequential decline during the previous quarter. "This segment is evolving as buyers focus on tangible benefits as well as automation across a diverse range of channels," said Courtney Munroe, research vice president, Worldwide Telecommunications Research at IDC. Although it is a challenging segment for CPaaS providers, Messaging continues to account for the bulk of the CPaaS market, sustaining its 67% share in 2Q23. For the full year 2023, CPaaS revenues are expected to grow 12.4% year over year to $15.6 billion a downward revision of $127 million from the 1Q23 forecast.

UC&C Company Highlights

• Microsoft's UC&C revenues rose 20% year over year to $6.8 billion in 2Q23, accounting for a 42.8% share of the market, up 40 basis points from 1Q23.
• Zoom's UC&C revenue grew 2.5% year over year in 2Q23 to $1.1 billion. It accounted for a 6.8% market share, staying relatively flat compared to 1Q23.
• Cisco's UC&C revenue fell 19.3% year over year in 2Q23 to $951 million, but its market share grew, albeit just 11 basis points over 1Q23, to 6%.

CPaaS Company Highlights

• Twilio continues to lead the worldwide CPaaS market with a 24.1% market share, up 68 basis points from 1Q23. Its revenues surpassed $913 million in 2Q23, growing 15.8% year over year.
• Sinch followed in second place with 15.8% market share, down 49 basis points from 1Q23. Its revenue grew 0.8% year over year to $600 million in 2Q23.

The IDC Worldwide Quarterly Unified Communications and Collaboration Tracker provides total market size and vendor market share data in an easy-to-use Excel pivot table format that includes IP Telephony/UC Systems (IP Phones, IP PBX/UC Systems), Enterprise Videoconferencing Systems (Videoconferencing Room Endpoints, Huddle Room Endpoints, Videoconferencing Infrastructure), UC Collaboration, and Managed/Hosted Voice/UCaas (Hosted Voice/Public Cloud UCaaS, Managed Voice/Private Cloud UCaaS). Measurement for the UC&C Tracker is provided in vendor revenue and unit/line/license/seat shipments. Additionally, the Communications Platform as a Service (CPaaS) market is covered as an optional add-on.

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International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

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Worldwide revenues in the Unified Communications & Collaboration (UC&C) market grew 6.9% year over year in Q2 2023 while the Communications Platform as a Service (CPaaS) market grew 13.2%, according to IDC.