Europe will present strong opportunities for unified communications and collaboration (UC&C) and contact center (CC) vendors/providers in 2025. Businesses are increasingly receptive to modern technologies — but succeeding in this market requires tailored approaches by country and business segment.
1. The European Market Will Become More Vibrant and Dynamic
As the external environment evolves and legacy infrastructure comes to end of life, European businesses are more open to upgrading to modern IT infrastructure that can drive future business outcomes. Awareness of what modern technology can achieve is growing thanks to campaigns led by market players. AI is contributing to this receptiveness, with businesses recognizing its immense potential.
Our European UC&C and CC research has revised upward the five-year forecast for both markets. While Europe is ready to embrace new technology at a faster pace, it is important to understand that this complex and unique market requires a tailored approach by country. This economy, composed largely of small and medium-sized businesses (SMBs), has been underserved and offers new opportunities. To succeed in Europe, it is crucial to understand specific country dynamics and buying behaviors and the value Europeans place on trust and working relationships.
2. UCaaS/CCaaS Bundles Will Become More Popular
UCaaS/CCaaS bundles are not new, but IDC’s 2024 European Enterprise Communications and Collaboration Survey indicates their growth will accelerate. This will be driven by contact centers as well as businesses that do not operate contact centers but require lightweight contact center functionalities for customer engagement (marketing/sales). This is particularly true for Europe, where contact centers are relatively smaller and the economy is comprised of more SMBs, making them inclined to consolidated solutions. Their smaller operations also make them more agile and adaptable to new solutions.
Businesses increasingly understand that isolated stacks create silos, leading to disjointed and frustrating experiences for both employees and customers, negatively impacting business outcomes. Businesses realize that analytics can reveal meaningful insights for informed decision-making. Given the large proportion of smaller businesses, resource optimization is important, leading to the blurring of front- and back-office workers. AI can facilitate this by guiding workers through workflows, minimizing the need for in-depth expertise. From an IT perspective, a consolidated stack is easier to manage, leading to greater efficiency.
3. Hybrid Deployments Will Grow
Europe is opening up to modern technologies but the transition from legacy to cloud is not linear. Some businesses/verticals will need to remain on premises for security reasons. Those migrating their entire stack from on premises to cloud will usually do so in stages, resulting in a period of hybrid deployment. IDC’s European Communications and Collaboration Survey showed that contact center hybrid deployments in Europe will grow over the next two years, although some countries will differ. The survey also revealed that a small fragment of businesses may return to on premises from cloud. Providers must offer flexible options to meet customers where they are and provide what they need.
4. GenAI Will Shift to Value-Based Conversations
While the benefits of GenAI are widely discussed, the conversation in 2025 will shift to the actual value it drives. This involves evaluating benefits in relation to costs. In theory, GenAI can automate many functions in UC&C and CC, driving greater efficiency while keeping overhead costs down. However, GenAI is still expensive and businesses are exploring use cases specific to their needs. Efficacy remains an issue due to dispersed data sources and unstructured formats.
There are also concerns about data privacy. Despite GenAI’s fluidity in interactions, sufficient guardrails are needed to prevent data leakage, limiting its performance. Businesses will consider pricing more closely in relation to benefits. Some functions, such as summarization, have become popular. GenAI is here to stay but needs to be value-driven going forward. Vendors/providers need to showcase real-life cost benefits that customers have derived from their GenAI solutions.
5. Opportunities for Service Providers Will Increase
There are some gaps in the market deterring the adoption of modern UC&C and CC technologies and this will create scopes for service providers in 2025. Our survey found that a key reason why businesses are not migrating to the cloud is a lack of the support needed to do so. This includes support with identifying the right solutions, implementation, change management, and aftersales service.
Another reason is that alternatives do not match specific requirements, indicating the need for customization and integration with business-specific IT applications. The emergence of GenAI creates new opportunities, including data management, consolidation, and aggregation. Service providers can also form strong partners in catering to the SMB segment.
Europe is set to become a dynamic market in 2025, offering ample opportunities for vendors/providers — but competition will be fierce. Succeeding in this market is not just about innovation but also about getting the go-to-market approach right. This involves understanding the intricacies of the European market very well.
IDC’s European Unified Communications and Collaboration and Contact Center research provides in-depth coverage of the European market by country and business size segments and can offer data-based strategic guidance.