Keith Dawson's Analyst Perspectives

It is unfortunate that business-focused digital communications are sold under three different headings: Contact Center as a Service (CCaaS), Unified Communication as a Service (UCaaS) and Communication Platform as a Service (CPaaS). (And that just counts the cloud options—let us acknowledge the huge, continuing, installed base on premises.) These are terrible ways to describe complex, varied and overlapping offerings. What distinguishes them are: The legacy that provides their point of focus; and How well they provide applications for business purposes. The legacy origins tell us a lot about the strengths and weaknesses of the various platform types. CCaaS, for example, was originally built around the automatic call distributor (ACD), the necessary heart of voice-based customer contact. Similarly, UCaaS’ origin story lies in the business phone system, or PBX, and CPaaS as a platform for mediating between telcos and developers building applications atop telecom infrastructure. CCaaS is the most tightly bound to business outcomes, as one would expect in the heavily measured contact center environment. UCaaS also has a wide range of business use cases at its disposal, many also relevant to contact centers. Those UC use cases are also relevant to efforts to expand the boundaries of the contact center to include knowledge workers and other teams—workers who need communications tools melded with data management in pursuit of enterprise customer experience (CX). So, you can make an argument that the same UC and CC tools (or at least the same underlying platforms) can support the marketing and sales and back-office functions of CX. CPaaS is another story altogether. CPaaS has a problem: It is poorly defined as both a product and a market segment, and it’s focused on being useful to developers and IT teams rather than on its value to business users. As a result, CPaaS risks being crowded out of the market by other types of communications platforms and by customer engagement suites coming from outside the telecom space. Modern business buyers are looking for digital communications platforms that feature an integrated suite of data management and artificial intelligence (AI) applications. CPaaS software providers have been slower to incorporate those applications into their platforms than CCaaS and even UCaaS. Contact center software providers, which compete for many of the same enterprise deployments as CPaaS software providers, have been faster to incorporate AI and workflow automation into their platforms. They have also been aggressive in building out APIs that go well beyond messaging. CCaaS often now incorporates critical tools like knowledge management, AI self-service and automation into the platform, with APIs to support them. This leaves CPaaS software providers behind the technology curve at precisely the moment when enterprises are evaluating the avalanche of new tools available. I think the market needs to be prepared for a spate of mergers, acquisitions and partnerships that connect the three kinds of communications platforms, further erasing the differences and boosting the business value of all of them. This will provide the necessary foundation for the true CX application suites that focus less on the communications aspects than on engagement management, and on driving revenue from customers. In effect, the industry will see two types of platforms that absolutely must be made to play well together: customer experience management (CXM) systems at the top, directing customer orchestration, tracking and interaction management, and communications platforms below that, integrating with telecom networks and knitting business users across the organization together with messaging, voice, video and other baseline needs. There will be overlap between those, of course. And what we may see come out of this is a unified set of tools, with software providers collaborating via huge ecosystems and API connections, sitting atop giant cloud hyperscalers and telcos, ensuring reliability and scalability. Maybe we can call it something cool, like CXaaS, or CX as a Service? The key takeaway here is that the industry is in the process of disconnecting some of the basic aspects of customer engagement from the mechanics of communications. When significant portions of customer engagement have been diverted to automated systems (chatbots or IVAs, primarily), then from the customer’s point of view what they are doing is directly akin to working with an app or a website. This is amplified further by the ongoing shift from voice to digital communications channels. ISG Research asserts that by 2028, most customer communications, both inbound and outbound, will be created and overseen by conversational AI systems. All of this changes the way service and engagement are perceived by the customer in unpredictable ways. From the enterprise perspective, that moves decision-making and process creation farther away from the contact center, which is healthy. And it suggests that the future of the contact center itself will depend less on the underlying communications infrastructure than on the quality of process integrations that link engagement to business goals like revenue and growth. Regards, Keith Dawson

Keith Dawson's Analyst Perspectives

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