In the late 90s it was common to hear friends and colleagues asking “what’s your dot.com idea?” as if a rudimentary knowledge of technology and a tad of creative thinking were the only requirements for online success. Sadly, and as many dot.coms subsequently found to their cost, that’s not the case. Fifteen years on and all the talk is of Cloud. Michael Gray wonders if history is repeating itself.
The Cloud. Data and communications services delivered from the network. No servers to buy and maintain. Capex models being replaced by Opex models. Smaller IT teams. No need to upgrade software. In short, a compelling proposition.
Yet, in the contact centre industry at least, it’s difficult to avoid the conclusion that Cloud hasn’t been as popular as many analysts predicted. Today, it accounts for between 4 and 11% of global ACD and IVR deployments (depending on which analyst you believe) and a relatively small percentage of CRM installations. A number of early contact centre hosting pioneers have also exited the industry.
So is this history repeating itself?
In many ways I’d suggest it is Firstly, because predictions for the uptake of hosted and Cloud services – just like early predictions for the uptake of, say, eCommerce services – have been wildly exaggerated. This has created disappointment in market performance whereas, in reality, the Cloud market has progressed very well.
Secondly, because of similar supply-side dynamics. For in both the eCommerce and contact centre hosting sectors, early pioneers have been replaced by larger, more focused specialists, as well as by incumbent players that have adapted to new delivery mechanisms and disciplines.
In the Cloud contact centre industry, I’m referring both to specialists such as inContact, NewVoiceMedia, ContentGuru and Ultra that continue to grow their global presence, and major players such as Genesys, Aspect, Siemens, BT, C&W, Avaya and Interactive Intelligence that are rapidly adapting their business and delivery models and forming new Cloud partnerships.
The final thing I believe they have in common is ‘vendor purpose’. For in the same way that eCommerce pioneers quickly came to realise that consumers weren’t interested in dot.com per se but in buying goods cheaper and more easily, so Cloud vendors have now woken up to the fact that they’re not actually selling Cloud services - they’re selling applications and knowledge.
“You see it in the US with Echopass getting a price premium for a fuller app package. You also see it with inContact partnering with Verint to include workforce apps into its hosted platform, and then filling essentially the same function for Verizon up the chain,” said Keith Dawson, principle analyst at Ovum. “Many vendors recognise that delivering routing/switching services is a commodity and want to move into a position where they can deliver higher value services. The ones arguing ‘why cloud’ aren't going to be here after a round or two of consolidation!”
Whatever the technology question, Cloud alone is rarely the answer. It’s much more likely to be Cloud + a leading edge application + the knowledge to make it work for the customer. That’s going to be the sweet spot for the serious Cloud vendors. Kathryn Penn of Siemens Enterprise Communications acknowledges this, claiming that interest in social media, social collaboration and workforce mobility are driving interest in its Cloud contact centre portfolio.
Analysts are certainly positive about prospects for the hosted/Cloud contact centre sector. One leading US firm predicts 40% growth. However, if Tim Pickard from NewVoiceMedia is correct, it could experience 100% growth in 2012.
Michael Gray
Marketing consultant
Gray Associates
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