28 March 2017
Making sense of the upheaval in the UC market
As recent events have shown, there is no question that the UC market is in the midst of a rapid transformation. The market’s landscape is changing, as big players exit stage right, and new names come to the forefront. Clearly, the biggest news in the industry is Avaya’s chapter 11 bankruptcy declaration. Don’t forget that only two months before that, Genesys acquired Interactive Intelligence. This same Interactive Intelligence had seen a $41 million decrease in economic earnings over the previous 5 years after moving to the cloud. (Forbes) Earlier in the same year, Aspect Software also filed for Chapter 11 bankruptcy, emerging quickly and repositioning itself in the market as part of the process.
Despite this apparent turmoil for some of the longest-standing companies in the industry, the cloud contact center market is expected to grow at a compound annual growth rate of 22.9% by 2022.
So where is this growth coming from? We know that many of the largest players are struggling to maintain pace in the growing cloud sector of the market.
The growth in the market comes from two sources: new technologies, and the consolidation of UC platforms.
First, much of the growth can be attributed to new technologies, such as WebRTC, where suppliers provide end users with APIs to build their own contact centers. However, the majority of contact center purchasers simply cannot build their own platform, due to restrictions on time and resources, or the need for customization and volume that WebRTC cannot support. The second source of growth comes from the increasing ubiquity of platforms like Microsoft's Skype for Business, which has been projected to reach 100 million seats by 2018 (unifysquare). The increasing adoption of Skype for Business enables suppliers to develop contact center solutions that build on a customer's existing communications platform. These solutions, such as ComputerTalk's ice contact center can be replicated across various groups within an organization, and encourage easy adoption due to the solution's compatibility with the existing communications platform. As communications products such as Skype for Business continue to grow in adoption, the need for these integrated (or in the case of ice, native) platforms will move to the forefront. The success of many contact center providers will hinge on a product's ability to leverage existing communication and collaboration tools.
What is driving this change?
The first driver behind these changes is the ubiquity of the platform. Nearly every business uses Microsoft's Office suite in some capacity, and many hosted Office bundles include Skype for Business by default. The same can be said for Google's G Suite, and even Amazon's Web Services platform. Businesses can obtain their communications and collaboration tools as part of their existing productivity suite, so they are less inclined to purchase, implement and learn separate technologies. Naturally, businesses also seek out integrated contact center solutions to embed seamlessly in their existing infrastructure. Interoperability is no longer sufficient- businesses with many users need a product that lives and breathes within its existing infrastructure.
What does this mean for the industry?
Contact center providers need to take a proactive product approach. Cobbling together an integrated solution from an existing product is not sufficient. This will not provide customers with the seamless experience they need, and the product will not match the look and feel of the existing UC platform. The more difficult approach just so happens to be the correct one. Solution providers need to rebuild their platform from the ground up, with a focus on leveraging all of the capabilities of the existing UC suite. Several providers in the market are offering a non-native Skype for Business contact center. These solutions do not take advantage of the robust feature set included not only in Skype for Business, but in the entire Office 365 suite.
How does this impact customers?
Customers are the real winners here. With the increasing ubiquity of these platforms, providers are dumping extraordinary amounts of money into support, feature parity and upgrades. Customers are now receiving the most robust, cost-efficient product with updates to the hour. Contact center platforms, such as ice, are so interwoven with the communications backbone that customers won't notice where Skype for Business ends and ice begins. Support becomes effortless when the platforms are so synchronized, and training costs are massively reduced by the similarities between the contact center and its communications layer.
What is next in the market?
In any industry experiencing an upheaval, there tends to be a period of relative calm shortly after the changes are made. The unified communications industry is no exception. Our experts have estimated that the clear UC winners will emerge in late 2017 or early 2018. At that point, so much consolidation will have occurred that there will be few remaining UC providers, and each of these providers will have partnered with a preferred contact center solution. Expect to see the market challengers make aggressive moves to achieve growth and solidify their position in the market for years to come.