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Recession Drives Adoption of Hosted Contact Center Infrastructure
2008 was an impressive year for the hosted contact center infrastructure market, and the first half of 2009 is proving to be even better. Research has shown that the worldwide economic recession is driving many organizations in all verticals to consider hosted contact center infrastructure solutions. DMG has found that many of these companies are not classic risk takers, but rather companies that view hosting as an opportunity to do business in a different and more flexible way, without a great deal of initial investment. Prior to 2008, the market had displayed little interest in hosted contact center applications, with the exception of interactive voice response (IVR) solutions. (As of the end of 2008, a little more than half of the $2 billion spent annually on IVRs went to either hosted or managed service providers.)
Contact centers of all sizes are analyzing the financial and operational benefits of using hosting. They are also considering the practical benefits of hosting, including receiving functional and technical enhancements on an ongoing basis, which could give them a sustainable strategic service advantage without having to make a significant capital or IT investment. A growing number of the hosting vendors are doing their part by delivering functionally strong and easy-to-implement contact center infrastructure solutions. Although a great deal of progress has been made, most of the hosted contact center infrastructure vendors still need to become more profitable so that they can continue to invest and deliver ongoing innovation to enhance their customers’ operating environments.
Growth Drivers
Growth of the hosted contact center infrastructure market can be attributed to several factors, including better, more stable and feature-rich solutions; increased vendor contact center domain expertise and implementation best practices; and flexible pricing. The future is very promising for hosted contact center solutions, even after the recession abates. DMG forecasts growth for the hosted contact center infrastructure market of 30 percent, 35 percent and 20 percent each year from 2009 to 2011, respectively.
Customers Give Hosting Vendors High Marks
One of the more interesting aspects of this market is how favorably customers feel about their solutions. DMG Consulting found high levels of customer satisfaction for most of the hosted vendors. Quick deployments, minimal cash outlay, a rapid and quantifiable return on investment, a reduced maintenance burden and the opportunity to “try before you buy” are among the top drivers of satisfaction. The six leading hosted contact center vendors are BT, Contactual, Echopass, inContact, LiveOps and USAN.
The Time is Right for Change
The time is right for the hosted contact center infrastructure vendors to make their move, as end users are finally open to the idea of using this service delivery model. The recession has made hosting a very appealing value position, because it is capital-efficient and ties infrastructure costs more tightly to business activity. A couple of the infrastructure vendors have their own hosted offering, but most sell their solutions to partners who are hosting providers. Also, leadership among the premise-based contact center infrastructure providers is in flux, and Microsoft is threatening to introduce a new voice product that could cause a major shift in market dynamics over the next couple of years. While DMG forecasts an economic recovery by Q4 2010, we see the trend towards hosting continuing. Now that enterprises have seen the value of hosted contact center solutions, we expect hosting to grow rapidly in importance and market share.
DMG’s recently released 2009 Hosted Contact Center Infrastructure Market Report gives prospects an in-depth appreciation of this market and the leading hosted contact center infrastructure offerings. The Report contains the actionable information that prospective buyers need to make informed technology decisions and successfully implement their solutions —detailed analysis of leading vendors, product functionality, benefits, market trends and share, opportunities and challenges, pricing, return on investment (ROI), best practices and customer satisfaction. Additionally, the Report shares best practices for implementing hosted contact center infrastructure solutions and explains how the vendors address any challenges that may arise.
To learn more about hosted contact center infrastructure offerings, see DMG’s 2009 Hosted Contact Center Infrastructure Report" .
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Donna Fluss is the founder and President of DMG Consulting LLC, a firm specializing in customer-focused business strategy, operations and technology services for Global 2000 and emerging companies. Ms. Fluss is a recognized thought leader and innovator in CRM, contact center and real-time analytics. For over 25 years, she has helped end users build world-class differentiated contact centers.
