Productivity Suite Survey: Mapping Growth Avenues
Insight by John Blackledge, J. Derrick Wood, James Kopelman, William Kerr , Logan Whalley, CFA and Andrew Sherman
THE COWEN INSIGHT
Our inaugural report on the Productivity Suite market based on a survey of 591 respondents reflects leading adoption of the top cloud services and those poised to gain share over time. Our survey also provides insight on purchase criteria, bundling, & the potential to replace UCaaS / Security.
MAPPING POTENTIAL GROWTH & DISCOVERING USEFUL INFORMATION
In our inaugural Productivity Suite report, we sought insight into the ~$44BN Productivity Suite market that investors rarely delve into because of historical dominance by certain players. There we found a lot of useful information.
- The opportunity and competitive threat to leading industry players
- The customer satisfaction and market demand for SKU upgrades within respective suites
- The effectiveness of bundling other products to help wedge them into new markets
Going down this road on inquiry, we found a lot of useful information.
- We see second largest player gaining modest share over time in Productivity, but satisfaction with the share leading incumbent is high and we don’t see a big displacement risk.
- There is ample interest in upgrading tiers (~84% very/somewhat likely to upgrade), which should drive ARPU higher for both vendors.
- Some leading players are highly effective in selling bundledproducts as integrated stacks. The share leader has lots of room to improve bundling strategies.
- The top two industry leaders are well positioned to leverage their stacks to bundle UCaaS (Unified Communications as a Service) and/or Security, opening up new revenue streams and potentially disrupting pure-plays.
The findings of our Productivity Suite report are based on a survey of 591 IT professionals and provide key customer insights on leading services, including customer adoption, drivers of future growth, and potential disruption of adjacent markets.
THE IMPLICATIONS OF OUR MODELS
Global Cloud market revenue should reach $491BN in ’22 (per Gartner) and is expected to rise to $976BN in ’26 driven by the leading industry players and other competitors. Within the broader Cloud forecast, we estimate the Productivity Suite segment is a $44BN market in ’22, with multiple levers for growth over time, driven by leaders in the space.