It's time to pay attention to the Canadian UCaaS market
This three-part blog series explores the market dynamics that make selling UCaaS a compelling proposition for Canadian managed service providers, the inevitable competition with the telcos, and an emerging partner model that could offer the winning formula for MSPs.
UCaaS market sees growth, recurring revenue streams
Long-term growth, high margins and recurring revenue streams make the UCaaS market a captivating opportunity for Canadian managed service providers.
Although it’s forecasted to grow by double digits through 2023, it’s not just the size of the UCaaS market that makes it attractive to MSPs. The Canadian voice landscape is in the middle of a radical disruption that is allowing smaller, emerging players positioning cloud-based solutions to compete and win against traditional voice incumbents.
Customers are moving away from conventional capital technology purchases and embracing new consumption-based models. The pay as you go nature of UCaaS fits the bill perfectly — requiring minimal upfront investment, it’s quick to deploy, expand and upgrade.
Enterprise customers are also choosing to focus more on their core businesses and less on managing technical infrastructure. UCaaS moves much of that infrastructure management to the provider, allowing for the reallocation of staff and budget resources to more strategic initiatives.
Canadian MSPs are also embracing other key advantages of the UCaaS market:
- UCaaS remains a largely untapped opportunity — Gartner estimates that on-premise solutions still account for 70% of the solutions sold to enterprise customers. At the same time, Gartner reports that “UCaaS capabilities now exceed those available from premises-based UC solutions.”
- While selling premise-based voice solutions is capital-intensive, UCaaS requires significantly less financial investment and involves a much shorter sales cycle.
- UCaaS generates recurring revenue for MSPs, typically for 6-10 years. Growth in user counts and the integration of new features and applications create an ongoing customer engagement, making UCaaS a truly ‘sticky’ solution.
- Many customers are streamlining supplier relationships and embracing ‘one-stop shopping.’ Once embedded with UCaaS, MSPs can position and consolidate other managed security, cloud, and infrastructure solutions.
Can MSPs afford to sit out the UCaaS fight?
While the UCaaS market represents a sizable opportunity for Canadian MSPs, providers face significant investments in talent, training and certifications in order to compete.In some cases, business retooling (such as sales structure and compensation changes) may also be required.
Faced with this heavy lifting, MSPs with limited Unified Communications background or capabilities might be tempted to stick with their current core offers and opt out of selling UCaaS.
That could prove to be a costly error. Canadian telcos, hungry for new revenue streams, also see opportunities in the voice market transition and the shift toward single supplier relationships. They’re using their voice incumbency to position their own XaaS solutions — and putting them on a collision course with competing MSPs.
About Chris Poupart:
Chris Poupart is a networking and IT industry veteran. As a member of the Cisco Canada executive, he led the Canadian Services team, engaging the Cisco partner community to grow sales and drive customer satisfaction. Prior positions included national sales and channel roles with Cisco, Nortel, and Bay Networks.
Now an independent B2B technology marketing consultant based in Toronto, Chris writes about technology solutions and how they have the power to transform businesses and the workplace