software as a service: is the contact center ready to switch over?
TRANSCRIPT
Software as a Service:Is the Contact Center Ready to Switch Over?
Keith Dawson, Principal Analyst
Contact Centers
June 9, 2010
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Focus Points
• Definitions of hosting
• New developments & trends in Hosted Contact Centers
• Confusion in the marketplace
• End user perceptions
• Strategic recommendations
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Definitions
• Hosted Contact Center: a network-based service, where a
service provider hosts a contact center technology platform
and leases out functionality, applications, and features to end-users. The end-user typically pays a usage-based fee on
a per-agent-per-month basis for the service.
• Dedicated Hosted Contact Center: Refers to a dedicated
server, non-partitioned environment per tenant.
• Multi-tenant Hosted Contact Center: Refers to a shared
server, partitioned environment across tenants.
• Managed Services: Refers to an outsourced relationship
where a third-party runs applications on a company’s own
premises.
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Market Trends
• The hosted contact center services market grew 21.0% over
2008. The number of ACD seats under license increased 19.8%, to approximately 248,600.
• Larger, enterprise deployments beginning to outpace the
traditional SMB market in 2009 and continuing through the
foreseeable future.
• Growth of hosted services has come from organic need for more
capacity, rather than from out-and-out replacement of premises-
based systems with hosted services.
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Market Trends
• Emphasis on reliability and SLAs
• Platform vendors hedging their bets
• True enterprise market emerging
• Moving beyond call routing to APO
• Marketing based on proof points, not just price
• Market Confusion based on:
• Varied new entrants into the market
• Variations in how “hosting” and “on-demand” is described by vendors
• Lack of a roadmap to success (as evidenced by referenceablecustomer success stories and TCO models
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Industry Challenges
HighHighMediumOverall end-user education on the flexibility and cost benefits of hosted contact center solutions still lacking focus.
MediumHighHighLow barriers to market entry bifurcate the market into high- and low-end markets.
MediumHighHighNew market entrants (especially outsourcers) increase the level of competition for hosted solutions.
HighHighHighLarge legacy premises-based tech investments present growth challenges for the hosted deployment model.
HighHighHighNorth American economic downturn and budget constraints for technology spending spur reconsideration of capital spending.
5-7 Years3-4 Years1-2 YearsChallenge
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Use of Hosted Contact Center Services
Q29. Do you currently use a hosted contact center service?
Outbound
Source: Frost & Sullivan
Use of Hosted Contact Center Services
30%
25%
39%
6%
24%
26%
42%
8%
Yes
No, But Plan to Use
within 18 Months
No, with No Plans
Don't Know
2010 (N=311) 2009 (N=332)
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Source: Frost &
Sullivan
Factors Influencing Hosted Deployment Decisions
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Source: Frost &
Sullivan
Factors Influencing Hosted Deployment Decisions
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Recommendations for Vendors and Service Providers
• Demonstrate robust multi-
tenant architectures to leverage shared resources, at
the same time providing
complete tenant autonomy.
• Customers at different ends of the size spectrum have very
different expectations.
• Emphasize IT buy-in and ease of operations/administration
• Separate objections based on
features from those based on
culture and image.
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Next Steps
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� Register for the next Chairman’s Series on Growth:
The CEO's Growth Partnership: Developing a comprehensive action-based
strategy to reinvigorate yourself (Tuesday, July 6) (http://www.frost.com/growth)
� Register for Frost & Sullivan’s Growth Opportunity Newsletter and keepabreast of innovative growth opportunities(www.frost.com/news)
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For Additional Information
Jake Wengroff
Corporate Communications
Information & Communication Technologies
(210) 247-3806
Craig Hays
Sales Manager
Information & Communication Technologies
(210) 247-2460
Ashwin Iyer
Research Manager
Contact Centers
(210) 649-7852