The Market for Contact Center in the Cloud Software

Having just completed the 2021 Ventana Research Value Index for Contact Center in the Cloud, I want to share some of my observations about how the market has advanced since our assessment three years ago. The trend towards cloud deployment for contact center infrastructure has accelerated, partly (but not exclusively) due to the urgency of the 2020 pandemic. CCaaS has been generally accepted as a safe, reliable alternative to premises-based ACDs that also has benefits in cost-control, scalability and rapid technical innovation. There is a consensus within the industry that CCaaS will soon become the dominant deployment mode, with premises tools reserved for niche applications. Vendors report that the majority of their new customers are cloud-focused.

Contact centers are transitioning their essential infrastructures from on-premises technology to cloud-based platforms. This shift has been under way for more than a decade, but has reached a tipping point — there is now an assumption among technology suppliers and buyers that the cloud is the fundamental delivery mode for interaction handling, agent management and other operational processes around customer service and support. Ventana Research asserts that by 2024, seven in 10 organizations will have moved all or part of their contact center technology into the cloud to attain greater flexibility and scalability.

Prior to the pandemic, progress toward cloud adoption was incremental. Vendors had difficult choices to make in the 2010s. Many legacy companies were caught in the bind of needing to sustain the revenue stream from lucrative long-term on-premises clients while at the same time defending their customers from cloud-only contact center technology providers that were not burdened by existing infrastructure. Many of these older established contact center providers with decades of standing and large customer bases were slow to adapt their product portfolios to the new reality of cloud computing. In recent years, however, those vendors have taken dramatic steps to reprioritize cloud development and reframe their value positions in the marketplace, with great success.

The industry has now reached the point where contact center in the cloud, referred to as CCaaS (contact center as a service), is the dominant mode of operations for new contact centers and for expansions of older ones. It is increasingly the main choice for upgrades and replacements.

Over the last several years, Ventana Research’s assessment of the CCaaS market found many technology providers are unsure of how to meet the broader need for customer engagement and experience, and how they would evolve. There is a need to support even more customer engagement, particularly social media and an array of mobile applications. Customers want to engage through a larger number of channels. This has been a leading factor in the introduction of communications platforms in the cloud known as (CPaaS) that provide more flexibility in configuration and customization than traditional contact center technology.

Now and into the post-pandemic 2020s, contact center buyers are looking for a wider range of capabilities, connections and use cases than in the past. Buyers have largely moved past the initial question of cloud versus on-premises, and are much more aware of the deployment options available to them — for example, public cloud, private cloud, or hybrid. It is allowing organizations the freedom to think of their centers as elastic, with capacity going up or down as needed.

Assessing and operating a modern contact center now requires a balanced set of evaluation criteria that represents an organization’s needs. First, buyers should look at the manageability of the broader set of applications and technology required to operate an omnichannel contact center. There is also the need to ensure reliable 24/7 operations that will support the level of performance and scalability from the internal operations to the customers interaction. In addition, the contact center must have the adaptability to support the integration of a broad variety of technology, applications, processes and data. The level of usability required across roles and technology in the contact center should be a priority. Last but not least is the capability required for managing and handling customer interactions across any engagement channel, the capturing and applying analytics, and the AI and machine learning that should support performance management.

The most frequently cited benefits of cloud-based contact center systems are not cost savings, reduced need for in-house resources and better financial visibility and control, but the ability to best enable the customer experience through effective applications for agents and customers. The modernization of the contact center also provides improvement to the usability of the technology that is available through a web browser and mobile devices for both agents in the contact center and customers. This integrated agent management, historically called workforce optimization, enables forecasting and scheduling.

Ventana Research finds that organizations are well aware of the imperatives to improve and update contact center processes and technologies in a way that enables their agents and engagement channels to provide the best possible personalized customer experiences. Increasingly, the impetus to improve and integrate the contact center comes from outside. Many organizations are centralizing processes for customer experiences and engagement under new executives like the Chief Customer Officer or Chief Experience Officer. The reason for the shift is to improve the accountability and quality of operations with customers across departments.

The results of our analysis are reported in our 2021 Ventana Research Value Index for Contact Center in the Cloud. We encourage you to review the results and consider how each of these vendors can support the needs of your organization.

Regards,

Keith Dawson