2012 - 2013 Cloud-Based Contact Center Infrastructure Market Report

DMG Consulting's fifth edition of its Cloud-Based Contact Center Infrastructure Market Report provides an in-depth analysis of all aspects of this booming and highly competitive IT sector. The 433-page report gives contact center and IT managers the comprehensive vendor, product, functional, technical and pricing information they require to determine if a cloudbased solution is right for their organization and, if so, which one. This Report also provides insights into adoption, market trends and challenges, analyzes market activity, reviews customer satisfaction with vendors, and offers implementation best practices to help users realize the greatest continuing return on their technology investments.

We've been talking about the Great Recession for four years now, mostly focused on doom and gloom. One positive thing that came out of the Great Recession was that the cloud finally became a reality for contact center solutions. Economic instability helped make cloud-based contact center infrastructure solutions extremely appealing. In the last two years, the Great Recession kicked cloud-based implementations into high gear, with growth reaching unprecedented numbers across industries, geographies, and companies of all sizes.

Faced with the uncertainties of the recession, companies that needed contact center infrastructure but did not want to make large capital expenditures tiptoed their way into the cloud as a short term solution. They soon realized that the cloud-based business model had more benefits than challenges. The initial skepticism that held companies back from trying something other than a premise-based solution has morphed into an entire generation of contact center and IT leaders embracing this acquisition model and regarding it as a key enabler for their future.

The staggering statistics best illustrate the story. In 2008, the adoption rate of cloud-based contact center infrastructure solutions was only 2.2%. In just three years, that rate has nearly tripled to 5.9%. After a decade of creeping forward seat by seat, this market suddenly grew by 26.4%, from 268,794 seats in 2008 to 339,850 seats at the end of 2009. It picked up more momentum in 2010 when it grew by 42.4%, and exploded in 2011, growing by 80.2%.

This rapid adoption has and will continue to drive and speed the pace of innovation. As more established and larger contact centers look to move their infrastructure to the cloud, they are demanding the functionality, reliability, and ease of use they've become accustomed to with their premise-based solutions. Cloud-based vendors are being forced to achieve parity in many areas. Unlike their premise-based competitors, these vendors use agile development cycles that enable them to bring enhancements and new capabilities to market quickly.

As was the case in 2011, much of the innovation in the contact center infrastructure market now comes from cloud-based vendors. They continue to invest in research and development (R&D), and many are introducing functionality that truly sets them apart. Some vendors are adding workflow engines to attract back-office users. Others are focusing on pre-arrival routing options to enable their customers to realize the true benefits of cloud-based technology. As the solutions mature, cloud-based vendors are offering more out-of-the-box third-party integrations with other contact center applications such as customer relationship management (CRM), quality assurance (QA), and workforce management (WFM). DMG expects to see additional innovation in the areas of routing and integration capabilities over the next couple of years.

While cloud-based contact center infrastructure solutions are not yet the answer for every department, contact center, or enterprise, they have altered the competitive landscape for the better. Today, end users have more vendor and solution choices than ever before, giving them unprecedented leverage to negotiate a favorable deal. DMG advises buyers to be aware that there are significant differences among available solutions. When seeking a cloud-based provider, end users must establish clear, specific business requirements, follow best practices for selecting applications, and invest the time and resources necessary to craft contracts that include vendor management programs and service level agreements to protect them for the short and long terms.

To aid users in their research and evaluation process, DMG conducted an independent survey to measure end-user satisfaction with cloud-based contact center vendors and their products, service, support, professional services, training and innovation. This study evaluates the performance of the six vendors analyzed in detail in the 2012 Cloud-Based Contact Center Infrastructure Market Report. A majority (51.6%) of satisfaction ratings across all vendors for the ten major categories surveyed fell into the satisfied range (3.0 to 3.7 out of 5.0). 38.3% of the average ratings fell into the highly satisfied range (4.0 to 4.7), and 10% of the ratings fell into the somewhat satisfied range (2.0 to 2.7). What this means is that end users are generally very satisfied with their cloud-based solutions, even though there is still room for improvement.

The last few years have shown that while cloud-based contact center infrastructure solutions sell well when budgets are tight, there is uncertainty about a company’s performance, and capital spending is limited. However, DMG expects these solutions to continue to gain ground once the economy completely recovers, now that they are recognized as technically and functionally viable alternatives to premise-based solutions. DMG projects that the cloud-based contact center infrastructure market will grow by 45%, 40%, 40% and 35%, each year, respectively between 2012 and 2015. DMG estimates that a minimum of 18.1% of all contact center seats will be in the cloud by the end of 2015. And it’s likely that these numbers are conservative, as more companies are buying into the benefits of having vendors maintain the hardware and software, freeing them to concentrate on managing their business. This is the fastest-growing sector of the contact center market, and cloud-based solutions will account for an increasing percentage of new purchases for the foreseeable future.

The 2012 Cloud-Based Contact Center Infrastructure Market Report is the most comprehensive, fact-based and timely analysis of this explosive technology sector. It covers 13 vendors in total, six at an in-depth level, including 8x8 (Contactual), Echopass, Five9, inContact, Interactive Intelligence and NewVoiceMedia. Seven others are covered at a slightly higher level, including Cisco, Connect First, Enghouse, Magnetic North, NexxPhase, VoltDelta and West. The inclusion of contenders along with the marketleading vendors gives readers a deep appreciation of the range of cloud-based contact center infrastructure offerings.

Report Highlights

• The Great Recession paved the way for the cloud to take center stage: Companies that needed contact center infrastructure but did not want to make large capital expenditures hesitantly tried out cloud-based solutions. They soon realized that the benefits far outweighed the risks. Now, companies of all sizes, across industries and geographies, are embracing the cloud model and see it as key to executing on their vision for the future.
• Growth has been staggering for the last two years, despite the economic slowdown: In 2008, the adoption rate of cloud-based contact center infrastructure solutions was only 2.2%. That rate nearly tripled to 5.9% in just three years. The market grew by 224.3%, from 268,794 seats in 2008 to 871,717 seats, as of the end of June 2012.
• Demand is driving innovation and functional parity with premise-based solutions: As more established companies look to move their contact centers to the cloud, vendors are being forced to improve their solutions to achieve parity with their premise-based counterparts. Their flexibility and agile development cycles are making this possible, and then some. They are coming up to speed quickly and also introducing new functionality like workflow engines, enhanced routing solutions, and more out-of-the-box third-party integrations with other contact center and enterprise applications.
• End users are in control, but should undertake a thorough selection process: With a vast array of vendor and solution choices, end users have unprecedented choice and leverage to negotiate a great deal. DMG advises buyers to establish clear, specific business requirements, follow best practices for selecting applications, and craft contracts that protect them for the short and long terms.
• This market will continue to grow, in good and bad economies: Cloud-based solutions have already proven their ability to sell when the economy is uncertain. DMG also expects these solutions to sell well once the economy completely recovers, particularly now that they are recognized as viable alternatives to premise-based solutions. DMG projects that the cloud-based contact center infrastructure market will grow by 45%, 40%, 40% and 35%, each year, respectively between 2012 and 2015.

Key Reasons to Buy This Report

• Overview of cloud-based/hosted contact center infrastructure technology and applications and the changing competitive landscape
• Review of the state of the market and vendors, market share analysis, adoption rate, and projections through 2015
• Analysis of the market trends that are attracting interest and driving innovation, and the challenges that are presenting opportunities for the hosted/cloud-based contact center infrastructure vendors
• Insights into the new and emerging functionality and innovation that has recently been introduced into the market, or is planned for the next 12 to 18 months
• A balanced, impartial discussion of the pros and cons of cloud-based contact center infrastructure solutions, including a checklist of considerations to help determine if these solutions are right for your organization
• Vendor selection guide, including a comprehensive roadmap to help end users choose and acquire the right solution from the right vendor at the right price
• Straightforward advice on contracts, vendor management best practices, and service level agreements
• Detailed pricing analysis by vendor and typical price ranges for the market, as well as return on investment (ROI) data
• Comprehensive vendor satisfaction analysis addressing 14 aspects of each vendor's products, implementations, service, training, professional services, innovation and pricing
• An examination of the most common cloud-based contact center infrastructure topologies, including schematics that display how each model addresses data center redundancy, carriers and applications and services
• In-depth side-by-side comparison of the technical and functional components of available solutions
• A detailed analysis of the best practices required for a successful cloud-based contact center infrastructure implementation
• Detailed company reports for 13 leading and contending providers, including company, financial, strategy and product overviews, as well as a preview of their future product direction
• Cloud-Based Contact Center Infrastructure Vendor Directory

Table of Contents

Sample Figure: Typical Hosted Contact Center Infrastructure Solution

Order Information
To order a copy of the 2012 - 2013 Cloud-Based Contact Center Market Report, contact Deborah Navarra at deborah.navarra@dmgconsult.com or 516-628-1098. You may also purchase the report online.

Additional Formats for this Abstract
The Abstract and Table of Contents are also available in PDF format.