International Data Corporation (IDC) valued the worldwide unified communications and collaboration (UC&C) market at $69.2 billion last year, noting that revenue grew 7.8 percent year over year. The research firm forecasts the market to grow at a compounded annual growth rate (CAGR) of 3.9 percent through 2029 to reach cumulative revenue of $85.4 billion.
"The worldwide UC&C market is undergoing a massive transformation with new AI capabilities being released every quarter," said Denise Lund, research vice president for worldwide telecom and unified communications and collaboration at IDC, in a statement. "Businesses are recognizing the value of AI in UC employee engagement and UC customer engagement solutions. However, the AI-driven growth anticipated in the coming years will be counterbalanced by declines in IP phones, IP PBX/UC systems, private-cloud UCaaS, and videoconferencing infrastructure segments."
Among the companies in the UC&C segment, IDC noted that Microsoft's revenue rose 14 percent year over year to $31.5 billion in 2024, accounting for a 45.6 percent share of the worldwide UC&C market (up 2.4 percentage points from 2023). Zoom's UC&C revenue grew approximately 1 percent year over year in 2024 to $4.3 billion. The company accounted for a 6.2 percent market share, losing 40 basis points compared to 2023, according to IDC, which also noted that Cisco's UC&C revenue fell 4. percent year over year to $3.7 billion in 2024, while its market share declined by 70 basis points to 5.3 percent in 2024.
At the same time, IDC noted that worldwide revenue in the communications platform-as-a-service (CPaaS) market grew 7.7 percent YoY to $16.7 billion in 2024 and expects its to grow at a 9.3 percent CAGR through 2029 to $25.9 billion.
"The worldwide CPaaS market is growing steadily as the demand for API-powered customized communications use cases continues to rise, particularly to leverage AI-driven capabilities," said Courtney Munroe, research vice president for worldwide telecommunications research at IDC, in a statement.
Of the companies in that market segment, IDC noted that& Twilio continued to lead the worldwide CPaaS market with a 24 percent market share, up 70 basis points from 2023. Its CPaaS revenue surpassed $4 billion in 2024, growing 11 percent year over year, according to IDC. Sinch, it said further, maintained second place with a 15 percent market share in 2024, down 1 percentage point from 2023. Its CPaaS revenue grew approximately 1 percent year over year to $2.4 billion in 2024.
Integrated unified communications (UC) and customer engagement (CE) solutions represent the fastest-growing yet smallest segment in the global UC^C market, according to IDC. These solutions offer essential customer communications features and cater to organizations that need frequent customer interactions across functional teams but do not require a full-service contact center. it said.
This integrated UC-CE segment is new and is expected to grow at a 33 percent CAGR from 2025 to 2029, reaching nearly $2 billion by 2029, IDC said.