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Home ➤ Information and Communications Technology ➤ Cloud Telephony Service Market
Cloud Telephony Service Market
Cloud Telephony Service Market
Published date: May 2024 • Formats:
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  • Home ➤ Information and Communications Technology ➤ Cloud Telephony Service Market

Global Cloud Telephony Service Market By Deployment (Hosted, Cloud), By Enterprise Size (Small & Medium Enterprise (SMEs), Large Enterprises), By Network (Public Switched Telephone Networks (PSTNs), Voice over Internet Protocol (VoIP)), By Application (Conferencing, Multi-level IVR, Sales & Marketing, Customer Relationship Management (CRM)), By Industrial Vertical (BFSI, Education, Government, Healthcare, Media & Entertainment, Retail, Telecom & IT, Other Industry Verticals), Region and Companies – Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033

  • Published date: May 2024
  • Report ID: 119704
  • Number of Pages: 252
  • Format:
  • Overview
  • Table of Contents
  • Major Market Players
  • Request a Free Sample
  • Quick Navigation

    • Report Overview
    • Key Takeaways
    • By Deployment Analysis
    • By Enterprise Size Analysis
    • By Network Analysis
    • By Application Analysis
    • By Industry Vertical Analysis
    • Key Market Segments
    • Drivers
    • Restrains
    • Opportunities
    • Challenges
    • Latest Trends
    • Regional Analysis
    • Key Players Analysis
    • Top Key Players in the Market
    • Recent Developments
    • Report Scope

    Report Overview

    The Global Cloud Telephony Service Market size is expected to be worth around USD 52.3 Billion by 2033, from USD 22.2 Billion in 2023, growing at a CAGR of 8.9% during the forecast period from 2024 to 2033.

    Cloud telephony is a service that can help in voice and data service operations with the use of an internet connection rather than the traditional phone line. It offers improved scalability to firms by enabling them to add more channels to the existing trunks. It works on VoIP phone systems (Voice over Internet Protocol) and Public Switched Telephone Networks (PSTNs). Cloud telephony services can be operated without any physical connection to a phone company as it operates virtually.

    The cloud telephony service market has experienced significant growth in recent years. Businesses of all sizes are turning to cloud telephony to streamline their communication processes and enhance customer experience. The market is driven by several factors, including the increasing adoption of cloud technology, the need for cost-effective communication solutions, and the demand for advanced features and functionalities.

    Cloud Telephony Service Market

    Cloud telephony services offer a wide range of benefits to businesses. They provide flexibility by allowing employees to access the system from anywhere, enabling remote work and improving productivity. These services also offer scalability, allowing businesses to easily add or remove phone lines as needed. Additionally, cloud telephony provides advanced features such as call routing, call recording, voicemail, and integration with other business applications.

    Key Takeaways

    • The cloud telephony service market was valued at USD 22.15 Billion in the year 2023 and is estimated to reach USD 52.34 Billion in the year 2033 with a CAGR of 8.98% during the forecast period 2024-2033.
    • Based on the deployment type, the hosted segment is leading the market with a market of 61.9% in the year 2023.
    • Based on enterprise size, small and medium enterprises have dominated the market with a share of 70.1%.
    • On segmenting based on the type of network, the Voice over Internet Protocol segment has dominated the market with a share of 55% in the year 2023.
    • By segregating based on application, the Customer Relationship Management (CRM) segment has the largest market share of 40% in the year 2023.
    • Based on the industry verticals, the Telecom and IT segment has the largest market share of 20% in the year 2023.
    • In 2023, North America held a dominant market position in the cloud telephony service market, capturing more than a 35% share.

    By Deployment Analysis

    In 2023, the Hosted segment held a dominant market position, capturing more than a 61.9% share of the cloud telephony service market. This substantial market share can be attributed to the segment’s appeal to businesses seeking robust, cost-effective solutions without the necessity for extensive in-house infrastructure.

    Hosted cloud telephony solutions offer the advantage of lower upfront costs, as they eliminate the need for purchasing and maintaining hardware. This model is particularly attractive to small and medium-sized enterprises (SMEs) that prioritize budget-friendly, scalable communication solutions. Moreover, the hosted model provides enhanced reliability and flexibility, which are critical factors driving its adoption. Companies opting for hosted cloud telephony benefit from high uptime and the ability to easily scale services up or down based on business requirements.

    Providers of hosted services also regularly update their offerings to include advanced features such as integrated communication platforms that combine voice, video, and messaging capabilities, which are increasingly demanded in a hybrid working environment. The leadership of the Hosted segment in the cloud telephony market is also reinforced by its ease of integration with existing business systems, such as customer relationship management (CRM) software and enterprise resource planning (ERP) systems.

    This integration capability facilitates better customer service and improved operational efficiency, making hosted cloud telephony a preferred choice for companies looking to enhance their communication strategies without significant disruptions to their existing workflows.

    By Enterprise Size Analysis

    In 2023, the Small & Medium Enterprise (SMEs) segment held a dominant market position in the cloud telephony service market, capturing more than a 70.01% share. This significant dominance is primarily due to the cost-efficiency and scalability offered by cloud telephony services, which align perfectly with the operational needs and financial constraints of SMEs. These enterprises are often in need of flexible and affordable solutions that support their growth without requiring large capital expenditures or complex installations.

    Cloud telephony services provide SMEs with advanced communication tools that traditionally were only accessible to larger corporations due to high costs. Features such as virtual receptionists, on-demand call routing, and integration with mobile devices allow small businesses to present a professional image and manage communications more efficiently. This is essential for SMEs aiming to compete in broader markets without investing heavily in physical infrastructure.

    Additionally, the adaptability of cloud telephony services enables SMEs to rapidly adjust their communication capabilities in response to business growth or changing needs. This agility is particularly valuable in today’s dynamic business environment, where the ability to swiftly adapt to market conditions can significantly influence success.

    Cloud Telephony Service Market Share

    By Network Analysis

    In 2023, the Voice over Internet Protocol (VoIP) segment held a dominant market position within the cloud telephony service market, capturing more than a 55% share. This substantial market share can be attributed primarily to the segment’s cost-effectiveness and scalability, appealing to businesses of all sizes.

    VoIP technology allows companies to manage their communication services over the internet, which significantly reduces the costs associated with traditional Public Switched Telephone Networks (PSTNs). Additionally, VoIP offers enhanced flexibility and functionality, supporting features such as call forwarding, voicemail, and call routing, which are essential for modern business operations.

    The leadership of the VoIP segment is also reinforced by its adaptability in integrating with other digital communication platforms, making it a core component of unified communications systems. This adaptability is increasingly critical as businesses seek comprehensive solutions that include voice, video, and data services seamlessly.

    The ongoing shift towards remote work and the global expansion of businesses have further accelerated the adoption of VoIP solutions. The ability of VoIP systems to support international calls and remote communications at minimal costs compared to traditional methods is a pivotal factor driving its market dominance. Furthermore, technological advancements in VoIP systems, such as enhanced security measures, better connectivity, and improved call quality, contribute to its growing preference.

    The continuous upgrades and innovations in internet infrastructure, like the expansion of 5G networks, are expected to further enhance VoIP’s capabilities, promising even greater market penetration in the coming years. This ongoing evolution ensures that VoIP remains at the forefront of cloud telephony services, offering a robust, scalable, and cost-efficient communication solution for modern businesses.

    By Application Analysis

    In 2023, the Customer Relationship Management (CRM) segment held a dominant market position within the cloud telephony service market, capturing more than a 40% share. This leadership can be primarily attributed to the increasing necessity for businesses to enhance customer engagement and support through effective communication channels.

    CRM systems integrated with cloud telephony services enable businesses to streamline their communication processes, providing seamless interaction capabilities with customers through various channels like voice, SMS, and email directly from the CRM platform. The CRM segment’s prominence is further bolstered by the rising demand for personalized customer experiences and the need for efficient data management and analysis.

    Cloud telephony integrated into CRM systems allows for the automation of contact management, call logging, and customer interaction tracking, which significantly enhances the ability to provide personalized services and improves customer satisfaction rates. This integration supports real-time analytics and reporting, offering businesses critical insights into customer behaviors and preferences, thus enabling more informed decision-making and strategic planning.

    Moreover, the scalability and flexibility offered by cloud-based CRM systems are essential for businesses looking to adapt to market changes and expand their operations. The ability to quickly scale up or down based on business needs, without significant capital investment, makes this technology especially attractive.

    The continued innovation in cloud technologies and telephony solutions, combined with the growing recognition of the strategic value of CRM systems, suggests that this segment will continue to lead and expand within the cloud telephony service market in the foreseeable future.

    By Industry Vertical Analysis

    In 2023, the Telecom & IT segment held a dominant market position in the cloud telephony service market, capturing more than a 20% share. This substantial market share is primarily driven by the inherent need within these industries for robust and scalable communication systems.

    Telecom and IT companies are at the forefront of adopting advanced technologies to enhance their operational efficiencies and service offerings. Cloud telephony enables these companies to manage vast volumes of calls and data, maintain superior customer service, and ensure seamless communication across global operations.

    The leading position of the Telecom & IT segment is further reinforced by the continuous push for digital transformation within these sectors. As businesses within these industries strive to innovate and stay competitive, cloud telephony services offer scalable and flexible solutions that support the rapid deployment of new communication strategies.

    This includes the integration of AI and machine learning technologies to automate and optimize call routing, customer support, and telemarketing tasks, leading to increased productivity and reduced operational costs. Additionally, the global shift toward remote working models has accelerated the adoption of cloud telephony in the Telecom & IT sectors. These industries require reliable and secure communication tools that can support distributed teams and enable effective collaboration.

    Cloud telephony systems provide features such as virtual numbers, voice over internet protocol (VoIP), and direct inward dialing (DID), which are crucial for maintaining connectivity and business continuity. The ongoing advancements in cloud infrastructure and the growing reliance on cloud-based solutions are expected to continue driving the growth of the cloud telephony market in the Telecom & IT sectors well into the future.

    Key Market Segments

    By Deployment

    • Hosted
    • Cloud

    By Enterprise Size

    • Small & Medium Enterprise (SMEs)
    • Large Enterprises

    By Network

    • Public Switched Telephone Networks (PSTNs)
    • Voice over Internet Protocol (VoIP)

    By Application

    • Conferencing
    • Multi-level IVR
    • Sales & Marketing
    • Customer Relationship Management (CRM)

    By Industry Vertical

    • BFSI
    • Education
    • Government
    • Healthcare
    • Media & Entertainment
    • Retail
    • Telecom & IT
    • Other Industry Verticals

    Drivers

    Increasing adoption of remote working policy by businesses

    One of the major factors propelling the demand for cloud telephony services worldwide is the increasing adoption of remote working policies. Cloud phone services have enabled employees to communicate seamlessly irrespective of the physical location, and access the corporate phone system from any location with an internet connection.

    These services have increased productivity, facilitated remote work, and guaranteed that workers can stay connected with clients and co-workers while working from home. The market is also driven by different advantages that cloud telephony services provide including lower operational costs, more accessibility, and the capacity to incorporate market-leading technologies like analytics, virtual phone numbers, and interactive voice response (IVR).

    Restrains

    Lack of technological upgradation in the underdeveloped and developing nations

    The undeveloped and developing nations lack technological proficiency and skilled labor, thus hindering market growth. In addition to this the concerns of data loss through the Internet, privacy issues, and the accessibility of substitute communication methods could also impact the market.

    Poor infrastructure in developing nations and an increase in cyberattacks have been a major concern that needs to be addressed by the businesses operating in the market. As different multinational companies are constructing their networks, the need for cloud phone services is reducing. Another factor impeding growth is the high investment costs especially in case of small and medium-sized enterprises.

    Opportunities

    Growing demand for increased business efficiency is an opportunity for the business

    One of the main opportunities for the market to expand could be the increasing requirement to enhance business efficiency and streamline processes in different industries. Organizational data volume growth, the rise in small- and medium-sized businesses (particularly in emerging nations), the acceleration of economic digitalization, and the expansion of the IT sector in growing economies like China and India are a few opportunities for the market to grow.

    In addition, the increased demand from banking, financial services, and insurance (BFSI) and the increasing deployment of cloud services to lower operating costs have also been a huge opportunity for businesses in the market to grow.

    Challenges

    Data privacy and security concerns hamper the market growth

    There are numerous challenges faced by the cloud telephony services market. Concerns regarding data security and privacy could hamper the market as keeping private data in the cloud increases the possibility of security issues and unwanted access. The market also faces challenges in guaranteeing compliance with relevant laws and standards due to regulatory compliance requirements differing by region.

    Further, issues with compatibility across various cloud telephony platforms can make it difficult for firms to integrate and communicate with current systems. Overall, the cloud telephony service market needs to increase the quality of its offerings as compared to traditional phone systems.

    Latest Trends

    Globalization of businesses

    Globalization has been a trend that has boosted the cloud telephony market. As traditional phone systems have frequently encountered difficulties in creating their presence in foreign markets (especially companies that emphasize growing internationally), the emergence of these services has aided such businesses in communication across borders. These difficulties can include managing several service providers, negotiating complex legislation, and securing phone numbers.

    Cloud telephony services also allow enterprises to build a local presence without the need for actual infrastructure, the cloud phone service providers are collaborating with other companies. For instance, Ooredoo has collaborated with Cisco to launch a cloud phone service in Qatar. Additionally, these solutions are eradicating geographical obstacles, which promotes globalization and makes it easier for companies to flourish internationally.

    Regional Analysis

    In 2023, North America held a dominant market position in the cloud telephony service market, capturing more than a 35% share. This prominence can be attributed to several factors that reinforce the region’s leadership in technology adoption and infrastructure development. The demand for Cloud Telephony Service in North America was valued at USD 7.75 billion in 2023 and is anticipated to grow significantly in the forecast period.

    The proliferation of cloud-based solutions across industries, coupled with high levels of investment in IT infrastructure, significantly drives this market’s growth. Moreover, the presence of key players and startups in cloud telephony within the region further boosts innovation and adoption rates.

    Additionally, North America benefits from a robust regulatory framework that supports cloud technology deployment, ensuring data security and privacy. This, combined with the widespread acceptance of remote working models, particularly in the United States and Canada, has accelerated the demand for flexible and scalable communication solutions. The market is further fueled by the integration of advanced technologies like AI and machine learning, enhancing the cloud telephony services in terms of efficiency and customization capabilities.

    Europe follows North America, contributing significantly to the global cloud telephony service market, driven by an increasing preference for cost-effective and scalable communication systems. The market in Europe is characterized by stringent data protection laws, which compel businesses to opt for secure and reliable cloud communication solutions. Additionally, the ongoing digital transformation in countries such as Germany, the UK, and France, and the rising demand in Eastern European nations, are pivotal to the growth seen in this region.
    Cloud Telephony Service Market Region

    Key Regions and Countries

    North America

    • US
    • Canada

    Europe

    • Germany
    • France
    • The UK
    • Spain
    • Italy
    • Netherlands
    • Rest of Europe

    Asia Pacific

    • China
    • Japan
    • South Korea
    • India
    • Australia
    • Singapore
    • Thailand
    • Vietnam
    • Rest of APAC

    Latin America

    • Brazil
    • Mexico
    • Rest of Latin America

    Middle East & Africa

    • South Africa
    • Saudi Arabia
    • UAE
    • Rest of MEA

    Key Players Analysis

    The cloud telephony service market has witnessed significant growth in recent years, driven by the increasing demand for efficient and cost-effective communication solutions. This market segment is becoming increasingly competitive, with several key players emerging as leaders in the industry. These players are continuously innovating and expanding their service offerings to cater to the evolving needs of businesses across various sectors.

    Top Key Players in the Market

    • 8×8 Inc.
    • AVOXI Inc.
    • Cisco Systems Inc.
    • Dialpad Inc.
    • Exotel Techcom Pvt. Ltd.
    • Go 2 Market India Pvt. Ltd.
    • LeadNXT
    • Nextiva
    • NFON AG
    • Tripudio Ltd.
    • Other Key Players

    Recent Developments

    • In Aug 2023, Dialpad Inc. collaborated with MIA Distribution, an Australian UcaaS provider, to make its cloud telephony services called TruseCaaS solutions available throughout Australia.
    • In June 2023, Cisco Systems Inc. partnered with AT&T to help businesses expand their connectivity for an expanding mobile-first workforce.

    Report Scope

    Report Features Description
    Market Value (2023) USD 22.2 Bn
    Forecast Revenue (2033) USD 52.3 Bn
    CAGR (2024-2033) 8.9%
    Base Year for Estimation 2023
    Historic Period 2019-2022
    Forecast Period 2024-2033
    Report Coverage Revenue Forecast, Market Dynamics, COVID-19 Impact, Competitive Landscape, Recent Developments
    Segments Covered By Deployment (Hosted, Cloud), By Enterprise Size (Small & Medium Enterprise (SMEs), Large Enterprises), By Network (Public Switched Telephone Networks (PSTNs), Voice over Internet Protocol (VoIP)), By Application (Conferencing, Multi-level IVR, Sales & Marketing, Customer Relationship Management (CRM)), By Industrial Vertical (BFSI, Education, Government, Healthcare, Media & Entertainment, Retail, Telecom & IT, Other Industry Verticals)
    Regional Analysis North America – US, Canada; Europe – Germany, France, The UK, Spain, Italy, Russia, Netherlands, Rest of Europe; Asia Pacific – China, Japan, South Korea, India, New Zealand, Singapore, Thailand, Vietnam, Rest of APAC; Latin America – Brazil, Mexico, Rest of Latin America; Middle East & Africa – South Africa, Saudi Arabia, UAE, Rest of MEA
    Competitive Landscape 8×8 Inc., AVOXI Inc., Cisco Systems Inc., Dialpad Inc., Exotel Techcom Pvt. Ltd., Go 2 Market India Pvt. Ltd., LeadNXT, Nextiva, NFON AG, Tripudio Ltd., Other Key Players
    Customization Scope Customization for segments, region/country-level will be provided. Moreover, additional customization can be done based on the requirements.
    Purchase Options We have three license to opt for: Single User License, Multi-User License (Up to 5 Users), Corporate Use License (Unlimited User and Printable PDF)

    Frequently Asked Questions (FAQ)

    What is cloud telephony?

    Cloud telephony is a technology that enables voice and data communication over the internet, eliminating the need for traditional telephone lines. It allows businesses to make and receive calls using virtual phone numbers and hosted PBX systems.

    How big is Cloud Telephony Service Market?

    The Global Cloud Telephony Service Market size is expected to be worth around USD 52.3 Billion by 2033, from USD 22.2 Billion in 2023, growing at a CAGR of 8.9% during the forecast period from 2024 to 2033.

    Who are the prominent players operating in the Cloud Telephony Service market?

    8x8 Inc., AVOXI Inc., Cisco Systems Inc., Dialpad Inc., Exotel Techcom Pvt. Ltd., Go 2 Market India Pvt. Ltd., LeadNXT, Nextiva, NFON AG, Tripudio Ltd., Other Key Players

    Which are the driving factors of the Cloud Telephony Service market?

    The driving factors of the Cloud Telephony Service market include increasing adoption of cloud-based solutions, demand for cost-effective communication systems, rise of remote work, and advancements in technology like AI and automation.    

    Which region has the biggest share in Cloud Telephony Service Market?

    In 2023, North America held a dominant market position in the cloud telephony service market, capturing more than a 35% share.

    Cloud Telephony Service Market
    Cloud Telephony Service Market
    Published date: May 2024
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    • 8x8 Inc.
    • AVOXI Inc.
    • Cisco Systems Inc.
    • Dialpad Inc.
    • Exotel Techcom Pvt. Ltd.
    • Go 2 Market India Pvt. Ltd.
    • LeadNXT
    • Nextiva
    • NFON AG
    • Tripudio Ltd.
    • Other Key Players
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