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    Microsoft Gains Ground on Cisco in Collaboration

    Written by

    Jeff Burt
    Published June 10, 2015
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      Microsoft continues to creep up on market leader Cisco Systems in the highly competitive global collaboration space, according to analysts at the Synergy Research Group.

      Numbers released by the market research firm June 9 showed that in the first quarter, while Cisco continues to hold a commanding lead in the category of on-premises collaboration technology, Microsoft continues to stay ahead in the rapidly growing hosted and cloud solutions market.

      The first three months was also the first time that quarterly revenues from hosted and cloud offerings surpassed those of on-premises solutions, according to the analysts.

      Overall, Cisco owns 14 percent of worldwide collaboration revenue, seeing 6 percent growth after the same period last year, while Microsoft’s share is at about 13 percent. Cisco’s share of the on-premises collaboration market was about 23 percent, compared with Microsoft’s at about 18 percent.

      However, Microsoft had about 9 percent of the hosted and cloud collaboration market, while Cisco garnered about 5 percent. In the overall collaboration and on-premises spaces, Avaya finished third. Google was third in the hosted and cloud space, according to Synergy Research.

      “Microsoft continues to be a significant disruptor in collaboration and its aggressive embrace of all things cloud is opening up ground for further disruption and market share advances,” Jeremy Duke, Synergy Research’s founder and chief analyst, said in a statement. “We believe that if Microsoft is successful in rolling out Skype for Business in Office 365, it could take its collaboration opportunity to a whole new level.”

      However, Cisco is continuing to rework its collaboration portfolio, moving farther into the hosted and cloud arena with such moves as the introduction of its Spark solution and the acquisition of Tropo in May, Duke said.

      Tropo brought with it a cloud API platform that makes it easier for developers to embed real-time communications into their applications. Cisco officials in November 2014 unveiled Project Squared, which included a broad array of collaboration technologies—such as WebEx—and was designed to make it easier for customers to use the products and to move company’s collaborations efforts farther into the cloud. The initiative was renamed Spark in March.

      The cloud is becoming increasingly important to the collaboration space. Analysts at Markets and Research last year said they expect the global UC market to hit $75.8 billion by 2020, and that it will continue to shift from on-premises systems—which in 2013 made up more than 60 percent of the space—to cloud-based solutions, which are easier and less expensive to deploy and maintain.

      Other analyst firms are seeing the same trend. Infonetics Research earlier this year in a survey of 162 large and midsize organizations found that by next year, more than 50 percent will be running at least some of their unified communications (UC) applications—such as voice, email and instant messaging—on a private or public cloud. In another report, analysts with Global Industry Analysts said the market for cloud-based video conferencing could hit $2.9 billion by 2020, with the growth again driven by a more mobile enterprise and workforce as well as the move to 4G networks and the proliferation of IP-based video conferencing systems.

      With trends like a more mobile workforce, the proliferation of connected devices and cloud computing, workers increasingly are demanding tools that enable them to collaboration anytime, from anywhere and on any device. A growing number of vendors are growing out their portfolios to include cloud- and software-based offerings.

      That’s the fastest segment of the collaboration space, according to Synergy Research analysts. Revenue for the entire collaboration space grew 4 percent in the first quarter over the same time in 2014, while revenue from hosted and cloud solutions jumped 10 percent year-over-year. Hosted and cloud solutions account for 51 percent of all collaboration revenue.

      Revenue for on-premises solutions fell 2 percent.

      Jeff Burt
      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

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