Worldwide UC&C Market Grows Despite Economic and Geopolitical Headwinds in 2022, According to IDC Tracker

Worldwide revenues in the Unified Communications & Collaboration (UC&C) market grew 7.9% year over year and 2.1% sequentially to $15.2 billion in the fourth quarter of 2022 (4Q22), according to the International Data Corporation (IDC) Worldwide Quarterly Unified Communications and Collaboration Tracker. For the full year 2022, worldwide UC&C revenue grew 9.8% year over year to $59.3 billion.

Businesses have been investing in UC collaboration and UCaaS solutions to improve employee and customer interactions while supporting cost-effective business agility and digital transformation (DX) initiatives. When it comes to telephony communications solutions in use today, roughly two thirds of organizations are using at least some cloud based UCaaS as part of their primary approach, and UCaaS adoption is expected to continue. Network-related spending remained resilient in 2022 despite inflation, regional conflicts, lingering channel issues, etc. Speed, network resiliency, and productivity continue to be seen as key drivers of the market.

UC&C technology segment specifics for 4Q22 and the full year include the following:

• Hosted Voice/UC Public Cloud (UCaaS) grew 16.2% year over year and 4.4% sequentially in 4Q22 to $5.6 billion in revenue. For the full year 2022, public cloud UCaaS revenue increased 16.6% to $21.2 billion.
• UC Collaboration (including video conferencing software and cloud services) increased 5.9% year over year and 0.3% compared to the previous quarter to $7.3 billion in revenue in 4Q22. For the full year 2022, UC Collaboration revenue increased 9.1% to $28.8 billion.
• IP Phones revenue declined 8.3% year over year and was down 14.3% sequentially in 4Q22. For the full year 2022, however, IP Phones revenue increased 2.5% to almost $2.0 billion. IP Phone shipments fell sharply in 4Q22, declining 20.6% year over year and 14.2% compared to the previous quarter. For the full year, IP Phone shipments were down 6.5% year over year.
• Videoconferencing Room Endpoints declined 2.2% year over year but increased 13.7% sequentially to $471 million in 4Q22. For the full year 2022, revenue declined 3.1% to $1.8 billion.
• Huddle Room Endpoints increased 19.5% year over year and 18.1% sequentially to almost $287 million in 4Q22. For the full year 2022, revenue increased 11.5% to $1.0 billion.

"Together UCaaS and UC collaboration apps continue to drive growth in the worldwide UC&C market," said Rich Costello, IDC senior research analyst, Unified Communications and Collaboration. "The provider landscape is evolving in major ways as we head into 2023 with pressure on providers to increasingly monetize their existing base while attracting new customers."

From a regional perspective, the IDC Worldwide UC&C Tracker reported the following results in 4Q22 and for the full year 2022:

• In North America (U.S. and Canada), total UC&C revenue declined 1.7% compared to the previous quarter but increased 7.1% year over year in 4Q22 to $7.1 billion. For the full year 2022, total revenue was up 8.9% to $28.1 billion.
• Europe, the Middle East, and Africa (EMEA) saw total revenue grow 4.2% sequentially and 5.5% year over year in 4Q22 to $4.3 billion. For the full year 2022, total revenue was up 7.2% to $16.8 billion.
• Asia/Pacific (including Japan) (APJ) experienced total revenue growth of 7.4% sequentially and 12.4% year over year to about $3.3 billion in 4Q22. For the full year 2022, total revenue was up 14.8% to almost $12.2 billion.
• Latin America total revenue increased 5.0% compared to 3Q22 and 12.9% year over year in 4Q22 to more than $580 million. For the full year 2022, total revenue was up 16.3% to over $2.2 billion.

UC&C Vendor Highlights

• Microsoft's total worldwide UC&C revenue was $6.1 billion in 4Q22, up 3.9% sequentially and 18.4% year over year. For the full year 2022, Microsoft total revenue was $23.0 billion, an increase of 20.9% over 2021 and representing a 38.7% share of the worldwide UC&C market.
• Cisco's total worldwide UC&C revenue was $984 million in 4Q22, down 12.3% compared to 3Q22 and down 8.5% year over year. For the full year 2022, Cisco total revenue declined 6.4% to $4.2 billion, representing a 7.4% share of the worldwide UC&C market.
• Zoom's total worldwide UC&C revenue increased 1.2% sequentially and 3.4% year over year to almost $1.1 billion in 4Q22. For the full year 2022, Zoom's total revenue grew 6.6% to $4.2 billion, representing a 7.1% share of the worldwide UC&C market.

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.

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