Why operators need to focus on UCaaS for SMEs

UCaaS-companies have seen tremendous growth in the last few years, with main players such as Microsoft Teams, Zoom, and Cisco adding thousands of new users to their platforms each week. The general interest in UCaaS increased by 86% after the pandemic.

However, the very early adoption of unified communication platforms has mainly come from larger enterprises rather than small and medium-sized businesses.

There are some 24 million SMEs in the EU alone, together representing around 99% of all companies in the area. However, SMEs have historically been a tricky segment to serve successfully with unified communication. An annual survey from IDC revealed that the adoption of unified communication systems (before the pandemic) was roughly 30% for businesses with fewer than 249 employees. In contrast, enterprises had adoption rates over 50%.

Key differences in adoption between markets also exist. In Telavox’s home market, the Nordics, the majority of companies use a UCaaS platform and it’s more common to have a corporate mobile subscription than not to have one. The market solution maturity largely drives this high adoption rate, with carriers having the right SME offering.

The Nordic UCaaS solutions are tailored to SMEs based on three key buying factors that SMEs view as essential.

Large enterprises typically use multiple solutions (two out of three have more than one video collaboration vendor). On the other hand, SMEs prefer simplicity and completeness. They carry slim IT budgets that favour one-size-fits-all solutions over a best-of-breed setup.

Secondly, SMEs typically don’t have dedicated IT personnel and require a simple solution to maintain. The complex solutions designed for larger enterprises are beyond the scope of many SMEs to manage effectively. Therefore, they have limited appeal to decision-makers.

Lastly, SMEs’ operational setup is less complex (e.g. national, a few offices), which rarely needs platform customisation – essentially, any UCaaS solution could be implemented off-the-shelf – assuming an appropriate solution is available in their market.

It is likely not a surprise that the software industry is the first to move towards a digitalised ecosystem and buyer journeys. It can serve as a key enabler in multiple ways, with research showing that digitalised SMEs have a three times higher likelihood of achieving revenue growth.

This means that operators need a digital acquisition engine that can help onboard new customers digitally throughout the whole process – from sign-up to installation. Additionally, the most important requirement is to provide a “try-before-you-buy” option. This can be done either by freemium (basic functionality for unlimited usage) or free trials (full functionality but time-limited) – many SMBs would probably not even consider buying a SaaS product if neither freemium nor free trials are available.

Unified communication is all about interconnectivity and sharing an experience that puts further emphasis on “try-before-you-buy”. Microsoft Teams offers a free trial month of Office365, and Zoom has a basic “free” package. In both cases, this allows users to try the platform.

For Verizon’s operator-led UC solution, BlueJeans, it was also reported that free trials generate more than 90% of their sales. A free testing period is essential if SaaS companies wish to start a meaningful sales conversation with SMEs.

SMEs have been moving towards cloud-deployed solutions even pre-COVID19. For instance, SME’s cloud budget more than doubled from 2016 to 2018 ($889,000 in 2018).

With SMEs needing less platform customisation, they are more flexible to deploy the service directly as intended – which heavily favours the cloud model. Cash flow constraints also play into cloud solutions as these require no up-front investments relative to on-premise.

Demand for cloud-based unified communication will continue to grow as more businesses adapt to a new era of mobility in their workforce. With practically all of them being current or potential direct customers to operators, it becomes increasingly important to provide the right SME offering. Those that execute it successfully will be able to capitalise on the ever-growing number of opportunities among SMEs.

Are you looking to either scale up or complement your existing UCaaS offering? Take a look at Telavox’s solution to discover how you can enable growth for your SME segment.