Frost Radar™: CloudConnected Calling
Enablement, 2023
Authored by: Michael Brandenburg

A Benchmarking Systemto Spark Companies toAction - Innovation ThatFuels New Deal Flow andGrowth Pipelines
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JANUARY 2023

Strategic Imperativeand GrowthEnvironment2Strategic Imperative
Factors Creating Pressure on Growth•

Frost & Sullivan has identified cloud-connected calling enablement as a nascent but aggressively
growing segment of the voice-over-internet protocol (VoIP) access and session initiation protocol(SIP) trunking market. Cloud-connected calling enablement services provide carrier-grade managed
voice and telephony services into third-party cloud private branch exchange (PBX) environments,
including Microsoft Teams, Cisco Webex, Zoom, and RingCentral platforms.

•Frost & Sullivan believes that the rise of cloud-connected calling enablement and bring your own
carrier (BYOC) solutions enabled across the leading unified communications as a service (UCaaS)

platforms represents a significant shift in the enterprise communications ecosystem and will have a
profound effect on specific markets.
oThe VoIP access and SIP trunking services market will experience a lateral shift from onpremises connectivity to cloud PBX) platforms. Over time, carrier connections to myriad cloudplatforms will become a significant proportion of the market.
Source: Frost & Sullivan

3Strategic Imperative
Factors Creating Pressure on Growtho

Provider-managed communications infrastructure will provide an additional value-added
service and revenue stream alongside core public switched telephony network (PSTN)
connectivity services.

oUCaaS market participants must support widescale BYOC options to attract new businesses,
particularly midmarket and large enterprise customers. Some businesses will leverage BYOCoptions to support multi-provider UCaaS deployments, enabling separate subsidiaries,
business units, or even specific user personas to utilize distinct UCaaS solutions that fit their

specific needs or compliance requirements. UCaaS provider BYOC strategies will result in thedisintegration of the value chain and the redistribution of revenue whereby certain parties(typically UCaaS providers that own their platforms) collect the cloud application revenue,
and other parties (typically telecom carriers) collect the PSTN connectivity, direct inwarddialing (DID), and calling plan revenue.
Source: Frost & Sullivan

4Strategic ImperativeFactors Creating Pressure on GrowthoThe ability to shift existing VoIP access and SIP trunking services quickly and easily into cloud
PBX solutions will accelerate the decline of on-premises PBX and UC platform deployments.
BYOC options eliminate a significant barrier to cloud adoption, and many of these customers
will abandon their on-premises platforms.

Source: Frost & Sullivan

5Growth Environment•Frost & Sullivan has forecasted a revenue opportunity of almost $1.5 billion in 2028 solely forMicrosoft Teams Direct Routing and Operator Connect solutions offered in North America.
That forecast is based on a strong belief that a significant portion of SIP trunking services willbe leveraged to support cloud PBX platforms by 2028.

•In 2023, a survey of IT decision-makers worldwide leveraging Microsoft Teams Phone in theirbusiness noted an overwhelming preference for cloud-connected enablement services
managed by their service provider. Respondents showed a strong preference for Operator
Connect (21%), followed by provider-managed Direct Routing (19%) and Teams Phone Mobile(16%). In comparison, only 11% of respondents prefer a self-managed session bordercontroller (SBC) approach.
•Competing cloud PBX providers such as Zoom and Cisco are taking an approach similar toMicrosoft and enabling equivalent BYOC capabilities to their platforms. Carriers,
communications service providers, and new entrants into the voice market have a significant
opportunity to be the trusted voice provider in these new cloud PBX ecosystems.

Source: Frost & Sullivan

6Frost Radar™
Cloud-Connected
Calling
Enablement,
2023

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Frost Radar™: Cloud-Connected Calling Enablement, 2023

Source: Frost & Sullivan

8Frost Radar™
Competitive Environment•

As an emerging segment of the VoIP access and SIP trunking market, success in cloudconnected calling enablement requires commitments to innovation, partnerships, and driving
early adoption. While almost any of the thousands of VoIP access and SIP trunking service
providers worldwide could enter this segment, Frost & Sullivan chose these ten providers forfurther inclusion based on time in market, breadth and depth of service offerings, and uniquevalue propositions and go-to-market strategies.

•Verizon, the innovation and growth leaders in this segment, follow similar paths to success.
Verizon has multiple solutions for Microsoft Teams Phone, including well-established Direct
Routing and Operator Connect services. They were early launch partners for Microsoft Teams
Mobile, leveraging their wireless networks to create links between cloud-based Teams andcorporate mobile devices, and both providers have extended beyond their successes with
Microsoft to include other ecosystems, such as Cisco or Zoom.

Source: Frost & Sullivan

9Companies to Action:
Companies to Be Considered First for
Investment, Partnerships, or Benchmarking

10Company to Action: Verizon
Innovation•Verizon has one of the longest histories in the cloud-connected calling enablement market. Theprovider has deep, long-term relationships with Cisco Webex and Microsoft Teams, leading cloud
PBX platforms. Verizon also works closely with contact center partners, including Genesys Cloud,
NICE CXone, Medallia, and Pindrop, to integrate toll-free number services closely.

•Verizon is modernizing its base of Cisco customers to Webex Calling, leveraging the complete
stack of collaboration, meetings, and calling that Cisco provides from its cloud platform.

•For customers who view Microsoft Teams as their go-forward platform, Verizon has a full suite ofoptions.
oVerizon Calling with Microsoft Teams is a managed SBCaaS offer specifically designed to quickly integrate
the provider’s IP Trunking and third-party SIP trunking services into a customer’s Teams Phone tenant.
Verizon Calling with Microsoft Teams is a value-added service that offers advanced call routing,administrative, and analytics capabilities to existing SIP trunking services with a per-user/per-monthpricing model.

Source: Frost & Sullivan

11Company to Action: Verizon (continued)
Innovation•oVerizon Calling with Microsoft Teams is a managed SBCaaS offer designed to quickly integrate theprovider’s IP Trunking and third-party SIP trunking services into a customer’s Teams Phone tenant.
Verizon Calling with Microsoft Teams is a value-added service that offers advanced call routing,administrative, and analytics capabilities to existing SIP trunking services with a per-user/per-monthpricing model.

oVerizon VoIP for Microsoft Teams Operator Connect offers customers a direct and highly automated link
between Verizon IP Trunking and Microsoft Teams Phone platform. Once provisioned, a customer’stelephone numbers can be directly assigned from the Microsoft Teams admin portal, completelyabstracting the challenges of number and SIP trunking management for IT staff. Operator Connect is anoptional feature as part of Verizon IP Trunking.

oVerizon Mobile for Microsoft Teams enables the simplicity of single-number reach for corporate-liablemobile devices in the Microsoft Teams platform. Once activated, a Verizon Mobile user can leverage thedevice’s native dialer to make and receive calls, call the extension of any other Teams user in theorganization, and make and receive PSTN calls on the Teams desktop client from the same number.

Verizon has been a consistent Microsoft launch partner. For Direct Routing, Operator Connect,and now Teams Phone Mobile, Verizon launched its services soon after Microsoft announced thetechnologies.
Source: Frost & Sullivan

12Company to Action: Verizon
Growth•Verizon is the only telecommunications service provider in the United States that can offer its
enterprise customers a mix of Microsoft Teams Direct Routing, Operator Connect, and Teams

Phone Mobile. This makes it especially appealing to businesses seeking to consolidate services
under a single provider. The depth of services also affords Verizon a broader addressable marketof Microsoft Teams Phone opportunities than competitors, who only offer a subset of thesolutions.

•Verizon has positioned its cloud-connected calling enablement solutions as value-added services
or optional features alongside its traditional calling services. This approach enables customers tomigrate quickly without materially altering existing enterprise contracts.

•Verizon’s strong standing in North America's SIP trunking and wireless services market puts theprovider in a trusted position to guide its enterprise customer base as they transition into cloudbased communications services.

Source: Frost & Sullivan

13Company to Action: Verizon
Frost Perspective•

Early on, Verizon identified that businesses would shift to cloud-based communications
platforms such as Microsoft Teams and Cisco Webex. Recognizing the opportunity, Verizon

partnered with these platform vendors to create innovative value-added services thatcomplimented Verizon’s traditional IP Trunking and wireless offerings.
•Verizon is well positioned to stave off customers churning to other providers and grow its
enterprise voice and mobile services market share.

•With established and deep support for two of the leading cloud calling platforms, Verizon should
now expand the breadth of its partnerships to include other leading cloud platforms such as
Zoom or RingCentral.

Source: Frost & Sullivan

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KeyTakeaways

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Key Takeaways
The most successful cloud-connected calling enablers share certain characteristics.
▪

They offer broad telephony support for the most popular cloud PBX platforms and can expand
into each of the collaboration-first communications ecosystems;▪

They provide a high level of automation to connect businesses to their preferred collaboration
platform. Automated onboarding of businesses to cloud-connected calling improves customer
satisfaction, boosts customer loyalty, and drives operational efficiency for the provider.

▪

They offer diverse connectivity options (e.g., Direct Routing, SBCaaS, and Operator Connect) tomeet their customers' exact needs and requirements. One size does not fit all in calling
enablement, so a broad set of solutions enables a provider to create a tailored experience
when needed.

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Frost & Sullivan data and forecasts suggest that a significant proportion of the traditional voiceservices market, including legacy telephony services, VoIP access, and SIP trunking services, will
migrate to cloud PBX connectivity. This represents an existential threat to traditional carriers andtelcos unwilling or unable to adapt to a new managed services-led calling services environment.

Source: Frost & Sullivan

16Frost Radar™
Analytics

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Frost Radar™: Benchmarking Future Growth Potential
2 Major Indices, 10 Analytical Ingredients, 1 Platform
GROWTH INDEX ELEMENTS
VERTICAL AXIS
Growth Index (GI) is a measure ofa company’s growth performanceand track record, along with its
ability to develop and execute afully aligned growth strategy andvision; a robust growth pipeline
system; and effective market,competitor, and end-user focusedsales and marketing strategies.

• GI1: MARKET SHARE (PREVIOUS 3 YEARS)This is a comparison of a company’s market share relative to its
competitors in a given market space for the previous 3 years.

• GI2: REVENUE GROWTH (PREVIOUS 3 YEARS)This is a look at a company’s revenue growth rate for the previous 3 years
in the market/industry/category that forms the context for the given FrostRadar™.

• GI3: GROWTH PIPELINEThis is an evaluation of the strength and leverage of a company’s growth
pipeline system to continuously capture, analyze, and prioritize its
universe of growth opportunities.

• GI4: VISION AND STRATEGYThis is an assessment of how well a company’s growth strategy is alignedwith its vision. Are the investments that a company is making in new
products and markets consistent with the stated vision?

• GI5: SALES AND MARKETING• This is a measure of the effectiveness of a company’s sales and marketing
efforts in helping it drive demand and achieve its growth objectives.
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Frost Radar™: Benchmarking Future Growth Potential
2 Major Indices, 10 Analytical Ingredients, 1 Platform

INNOVATION INDEX ELEMENTS
HORIZONTAL AXIS
Innovation Index (II) is a measureof a company’s ability to develop
products/services/solutions (witha clear understanding of
disruptive Mega Trends) that areglobally applicable, are able toevolve and expand to serve
multiple markets, and are aligned
to customers’ changing needs.

• II1: INNOVATION SCALABILITY
This determines whether an organization’s innovations are globally
scalable and applicable in both developing and mature markets, and also
in adjacent and non-adjacent industry verticals.

• II2: RESEARCH AND DEVELOPMENT

This is a measure of the efficacy of a company’s R&D strategy, asdetermined by the size of its R&D investment and how it feeds theinnovation pipeline.

• II3: PRODUCT PORTFOLIOThis is a measure of a company’s product portfolio, focusing on therelative contribution of new products to its annual revenue.

• II4: MEGA TRENDS LEVERAGE

This is an assessment of a company’s proactive leverage of evolving, longterm opportunities and new business models, as the foundation of its
innovation pipeline. An explanation of Mega Trends can be found here.

• II5: CUSTOMER ALIGNMENTThis evaluates the applicability of a company’s
products/services/solutions to current and potential customers, as well as
how its innovation strategy is influenced by evolving customer needs.
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