UCaaS Segment Poised for Continued Market Consolidation
Proprietary Solution Key to Differentiation
New York, NY (PR Wire, June 24, 2015) - Ongoing market consolidation and the emergence of clear market leaders in the unified communications as a service (“UCaaS”) market is the prognosis delivered by Andrew Gaffney, Managing Director of Q Advisors, at today’s meeting of the Cloud Communications Alliance in New York City. The Cloud Communications Alliance brings together over 50 leading providers of hosted, IP-based, Unified Communications as well as bankers and other industry service providers on a quarterly basis to discuss issues facing the industry. Gaffney, one of the eight hand-selected presenters at the June meeting, spoke about M&A and Capital Markets trends.
As part of Gaffney's presentation, he highlighted some of the positive trends in the UCaaS market showing that the total hosted PBX and UC market is projected to reach $13 billion by 2020, with growth exceeding 27% annually. Gaffney then went on to address the increasing consolidation in the UCaaS sector by describing the rapid growth over the past four years by UCaaS market leaders such as Ring Central, 8x8 and Vonage. Gaffney stated, "While no one in the market is dominant, it is going to be tougher and tougher for the smaller firms to compete, unless they can deliver a differentiated solution."
In order for UCaaS companies to both effectively compete in an evolving market, as well as drive premium valuations, Gaffney spoke in detail about the benefits of creating a "proprietary solution" through integration of UCaaS platforms into cloud IT and other enterprise solutions, such as contact centers. Gaffney supported his comments with analysis by Q Advisors demonstrating that players with a proprietary platform continue to receive premium valuations of 3 to 5 times Enterprise Value/LTM Revenue.
Q Advisors (www.qllc.com) is a global boutique investment bank focused on assisting our clients with their most important business transactions – mergers and acquisitions, debt and equity financings and recapitalizations. Since 2001, Q Advisors has managed transactions for companies located on four continents with a total value approaching $8 billion. We bring deep industry expertise in our areas of focus: technology, media and communications. With senior leadership that has founded, managed and owned large companies of our own, we focus squarely on the needs and interest of each client.
For additional information please contact:
Robin Liebowitz, Principal