What Is Unified Communications (UC)?

Unified communications (UC) is technology that unifies multiple communications channels, including voice or video calling, personal or group messaging, and audio or video conferencing. Cloud-based UC solutions might also be referred to as unified communications as a service, or UCaaS.

With a pay-for-what-you-use model that lets companies scale as they grow, cloud communications technology delivers far more functionality for less than the cost of traditional phone systems. Small businesses can seamlessly work remotely, integrate data from siloed systems, and deliver a multichannel customer experience — all from the same platform.

As Gartner1 points out, "UC products and services can also be integrated with networks and systems, IT business applications, and in some cases, consumer applications and devices." For instance, businesses can integrate customer relationship management (CRM) with UC platforms, enabling company reps to see everything there is to know about customers calling into the business.

Many UC solutions can also be integrated with popular file-sharing apps (such as Google Workspace or Office 365), collaboration apps (such as Microsoft Teams), and messaging apps (such as Slack and Facebook Messenger). This way, teams can collaborate in real time while customer service and sales reps can interact with customers using their favorite channels.

Businesses large and small were already adopting UC solutions at a steady pace before the COVID-19 pandemic, and the sudden need to transform entire teams into remote workforces boosted demand for secure, streamlined communication and collaboration tools.

As a result, the global UC market hit a record high of $113.48 billion in 2022, according to Grand View Research. That data also suggests the market will be valued at $136.11 billion in 2023, grow at a compound annual growth rate of 17.4 percent from 2023 to 2030, and reach $417.86 billion in 2030.

Simply put: UC solutions will only become more popular over time. And if recent trends are any indication, it will also become more sophisticated and maximize the use of artificial intelligence (AI).

How Does Unified Communications (UC) Work?

UC technology, which — using voice over internet protocol (VoIP) — lets users place voice calls via the internet rather than telephone lines, provided the basis for modern cloud communications platforms. Over the past 20+ years, an array of new communications channels have emerged — including instant messaging, SMS, and video calling and conferencing — and forward-thinking VoIP providers began adding this functionality to their solutions.

With a robust modern UC platform, teams can use the same system to message their colleagues, video chat with clients, and place voice calls to vendors. If they need to switch a conversation from one channel to another, they can do so seamlessly, without disconnecting the initial interaction.

UC solutions offer features and functionality that traditional office phone systems don't, including visual voicemail, paperless fax, call forwarding with mobile phone integration, and call recording capabilities. With the right integrations, UC platforms become even more powerful — for example, adding the ability to click-to-dial from shared files, automatically log customer calls in CRM, and view screen pop-ups that provide information about incoming customer calls, including relevant account details.

Channels and customer data are streamlined, which makes communications (and overall operations) far more efficient.

Benefits of Using Unified Communications for Your Business

So why should small businesses invest in UC solutions? And how does this provide an advantage over traditional business phone systems and help companies outpace less tech-savvy competitors?

Improved Collaboration

Siloed data and human delays can create communication gaps and snafus that frustrate employees and customers alike. UC makes it easy for employees across departments and locations, whether they're working from home or anywhere else in the world, to collaborate and share real-time data.

Seamless Integrations

UCaaS is a powerful business solution on its own, but integrating it with critical business apps makes these solutions even more valuable to small businesses and their teams. Not only does integrating this technology improve communications efficiency, but it also gets customer data out of silos and provides accurate, real-time insights.

Better Customer Experience

Whether businesses use UCaaS, a contact center, or a combination of the two, they can interact with customers on their preferred channels. With CRM integration, customer service reps get screen pop-ups for incoming calls so they can easily access the customer's profile and account history. And thanks to call recording and analytics, customer service and sales managers know how reps are performing and can provide specific feedback and tailored training.

Lower Communications Costs

Unifying communications into a single platform means paying a single vendor. In general, VoIP is cheaper than traditional phone service — which also doesn't include video calling, messaging, AI-enhanced features, and all the other tools that come with UC. Plus, with cloud-based UC, there are no upfront hardware costs or licenses to purchase.

What Are the Types of Unified Communications Platforms?

Cloud-based applications and business software have become increasingly popular in recent years, but not all UC solutions require cloud hosting. What's the difference, and which makes the most sense for small businesses?

Cloud-Based UC Solutions (UCaaS)

With UCaaS, communications software and data are hosted by the UC provider in the cloud and are accessible via the internet, so employees can communicate from anywhere using any internet-connected device. The UC provider is responsible for securing data, upgrading software, and ensuring disaster recovery and business continuity.

There is no equipment for the company's IT department to install or servers to maintain, and businesses only pay for what they need, so it's easy to scale up or down as the business grows or downsizes. Many providers also make it easy to work with key business apps, either through native integrations with select third-party vendors or through open APIs.

On-Premises UC Solutions

On-premises communications platforms give businesses complete control over their communications channels and data and can be customized to meet the business's needs. But they also require a greater upfront cost and far more IT resources.

The company's IT department must set up and maintain servers on-site, build out a communications infrastructure, and purchase licenses for each team member to use the platform. A highly qualified IT team can enhance data security by adding firewalls to prevent hacking, but without the right skills and security resources, this option can also expose businesses to greater security threats.

On-premises solutions are typically more expensive due to the hardware costs, harder to integrate with third-party business systems and apps, more complicated to access remotely, and less efficient to scale. For each new hire, IT has to set up a workstation with the requisite hardware, purchase UC platform licenses, and install software.

On-premises solutions are typically more expensive due to the hardware costs, harder to integrate with third-party business systems and apps, more complicated to access remotely, and less efficient to scale. For each new hire, IT has to set up a workstation with the requisite hardware, purchase UC platform licenses, and install software.

Advantages of Cloud-Based UC vs Traditional Systems