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April 3, 2017updated 04 Apr 2017 5:02pm

Microsoft collaboration challenge to Cisco boosted by cloud shift

Cisco continues to dominate the collaboration market but the move towards cloud could tip the balance in Microsoft's favour.

By Joe Clark

Cisco’s dominance of the Collaboration Market is continuing to grow, though challengers are beginning to appear, according to a new report.

The new report from Synergy Research Group found that Cisco grabbed a 15% share of the Collaboration Market in 2016 and hit a five year peak of 28% in on premise based solutions. Microsoft currently holds 13% of the total market, but just 17% of on premise based solutions.

In third place IBM and Avaya were in direct competition with Big Blue outpacing Avaya in the third quarter, although Avaya maintained an overall lead for the year. It’s worth noting that Avaya recently filed for chapter 11 bankruptcy protection in January.

Cisco Appdynamics

Jeremy Duke, Synergy Research Group’s founder and Chief Analyst, said: “Collaboration continues to be a somewhat fragmented market that is characterised 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%.”

“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. 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.”

Total revenues from the collaboration market, which includes enterprise voice, email, social and cloud communications, accounted for $9 billion in 2016, close to its all-time high. The biggest change to the market was the move towards cloud based systems which saw a 9% increase over 2015, something that was reflected in the 4% decrease in premise based systems.

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Currently no group has achieved a double digit share of the cloud market but Microsoft has taken the lead with 9%. Cisco came in second with 6%, and AT&T is currently in third with 4%. As the market continues its move towards cloud, this could see the balance tipped in Microsoft’s favour.

Synergy Research group found that the strongest growth was found in three areas, applications that focused predominantly on teamwork such as Slack and Spark, Contact Centre as a Service (CCaS) such as Gensys, inContact and Five 9, and Video as a Service (VaaS) such as Zoom and BlueJeans.

In January, MarketsandMarkets released a report estimating that the Collaboration Market is expected to grow to $49.1 billion by 2021.

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