The global cloud communications market is set to grow at a compound annual growth rate (CAGR) of 18 per cent over the next five years and hit US$180.7 billion by 2027.
This is due to the trend of businesses switching from legacy private branch exchange (PBX) networks to cloud communications and opting for a pay-as-you-go model, according to data and analytics firm GlobalData.
Furthermore, the growing implementation of work-from-anywhere (WFA) and bring-your-own-device (BYOD) will continue to drive the implementation of cloud communications across all sectors.
The firm forecasted that Singapore and India are expected to see the fastest growth, recording CAGRs of 28.1 per cent and 28.4 per cent respectively.
Additionally, the US was revealed as the largest market for cloud communications solutions in 2022 with a share of 36 per cent of the total revenue, followed by China with an 8.5 per cent revenue share.
“Cloud communications is expected to continue its growth significantly due to scalability and adaptability,” said Tejal Hartalkar, senior technology analyst at GlobalData. “The technology offers both enhanced user and customer experience.
“In addition, these platforms often include advanced analytics and reporting features that help businesses gain insights into their communication patterns. This data-driven approach allows enterprises to make informed decisions and improve their communication strategies.”
According to GlobalData, the key verticals for cloud communications are manufacturing, information technology (IT), retail, retail banking and government, which collectively accounted for 33.7 per cent of the overall market in 2022.
Gary Barton, research director for Enterprise Technology and Services at GlobalData, added that cloud communications platforms have become the “default option” for most organisations.
“This trend was boosted by COVID-19 but has continued thanks to cloud-focussed digital transformation strategies by enterprises,” said Barton. “The cloud model offers the flexibility that most businesses require as work patterns evolve, and workforces grow and shrink.
“The cloud model also offers a strong disaster recovery component. The addition of complimentary components such as API plug-ins and artificial intelligence are increasing the ability of these solutions to offer business value and enhance customer engagement.”
Barton added that regulatory pressures around the world will steer the market accordingly.
“Regulatory pressures are increasing in most markets regarding the storage and transfer of employee and customer data,” he said.
“Cloud communication vendors and solution providers are therefore investing in security measures and encryption capabilities and local hosting options. These features help companies to meet stringent data protection and privacy laws like GDPR and CCPA.
“This allows businesses to reduce their compliance risks, enabling them to focus on core operations while ensuring transparent data practices. These enhancements ensure the ongoing relevancy of the cloud-hosted collaboration model.”