The Evolution of UCaaS: From Voice to AI-Enhanced Communication

The business of a Communication Service Providers (CSPs) is complex.  No more is it just a means of providing voice phone calls, or means of transport for data so consumers can go to Instagram.  While these certainly continue to be an important component of what Service Providers do, and of the revenues a CSP obtains, there is a lot of competition in that area, and the margins are slim.   About fifteen years ago, we started to see these curves come out from analysts that showed the amount of traffic going up, but the revenues kind of flattening out, leading to a discrepancy between network costs and network revenues.  And boy, did that come true, leading to CSPs needing to innovate to find other revenues sources.

The industry saw various efforts at diversification away from just phone calls and providing a pipe for data.  They knew they needed to sell other services.  And since the CSPs provided their core services to both businesses and individuals, from the business front, selling more enhanced voice services to businesses made sense as a way to diversify.  After all, the business enterprise was coming to a CSP to get data transport and trunking for the business phone service anyway, so why not get into hosting of the business phone service, and thus also sell hosted business phone services.

So we saw the rise of UCaaS as an offer from the CSP.   It was (and continues to be) a win-win for both enterprise and for the SP.  It provides a means of additional monthly recurring revenue for the CSP in a very adjacent area (voice services).   And the enterprise is getting high quality, highly scalable and highly stable business phone service.