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What’s the TAM for US Unified Communications?

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on Unified Communications & Collaboration


What’s the TAM for US Unified Communications?

By: -
29 Sep 2017

There is a lot of great research out that helps to create a definition of a knowledge worker.  And, there are some fairly good metrics we can use for estimating the number of knowledge workers.  Why is this important?  Mainly because it helps us to size the Total Addressable Market (TAM) for unified communications.  While a larger number of people can be included who also have a phone extension, e.g. the dock manager on a loading dock or a custodial manager, a count of active UC users – someone who will use presence-enabled directory, IM, peer to peer voice & video, desktop/app sharing + conferencing at least once per month – is likely to be a knowledge worker.

Over the years, numerous research groups have written reports seeking to define a knowledge worker, e.g., the 2009 study by The Work Foundation, “Knowledge Workers and Knowledge Work”, the International Labour Organization’s (ILO) category 3 & 4 work groups, and the U.S. Federal Reserve’s 2016 analysis of the U.S. job polarization.  While each study uses slightly different language and groupings, nearly all come to the same conclusion: A knowledge worker is someone who primarily does cognitive work that requires expert thinking and interacting with other people to convey or acquire information.  We like the U.S. Federal Reserve Economic Data (FRED) definition best: Occupational groups that conduct nonroutine cognitive (e.g., a manager of a business) and routine cognitive (e.g., an accounts receivable person in the finance department) work.  These definitions also line up nicely with the ILO’s 3 & 4 work categories – so it makes it easy to get a count.

To date, WR has been able to scope out UC&C opportunity analysis in over 25 countries in six regions using this and other related methods.

So how many knowledge workers are there in the U.S.?  Our best 2017 estimate is 68M, or 42% of the U.S. labor force.  That’s also a pretty good metric for understanding the 2017 TAM for active unified communication seats in the US.  However, this number is not static.  As FRED’s job polarization study indicates, Knowledge Workers are growing faster than any other labor group in the U.S. (see below).  This means there is a double accelerant to U.S. unified communications growth – both the growth of knowledge workers within the labor pool, and the transition from standalone voice and conferencing services to a unified voice and conferencing service. 

Graph 1: Source: Federal Reserve Economic Data, Indication of Knowledge Worker Growth in the US (green line)