Businesses Will Gain from Cloud Contact Center Suites, Frost & Sullivan Says

Revenue for the North American contact center solutions market indicates a growing preference for hosted services, but while companies are investing in the cloud, they are still relying on on-premises tools, which suggests there is ample room for growth among vendors, Frost & Sullivan finds.

According to the research firm, the North American market racked up a total of $2.17 billion in 2014, and the market is expected to climb to $3.66 billion by 2019. While interactive voice response tools are projected to maintain the largest revenue share through this forecast period, automatic call distributor and agent performance optimization tools will grow at more substantial rates.

But while organizations are investing in cloud-based applications, a significant portion of organizations still wish to keep some, if not all, of their solutions on premises. The demand for what is referred to as "best-of-breed" solutions—or those assembled piecemeal from various applications—is expected to remain notably strong among midsized to large enterprises. These heftier outfits will continue to keep a portion of their core systems on premises while adding new capabilities in the cloud, Frost & Sullivan predicts.

One cause for their hesitation, notes Brandan Read, digital transformation analyst at Frost & Sullivan, is a concern for security. Yet while "high availability and safeguarding customers are of paramount concern to organizations, so is business continuity, which cloud/hosted solutions enable," Read wrote in an email. Read assures that "the issues with the cloud will continue to fade over time."

Another factor holding many companies back, Read says, is economic uncertainty. He says that many companies will be hesitant about moving to the cloud unless there is a strong promise of a return on investment "or other compelling reasons, like a merger or acquisition, where moving to the cloud obviates disruptive rip-and-replacing of one set of on-premises solutions for another." For instance, companies might have other IT needs and requirements that take precedence.

Smaller businesses, however, are increasingly showing a preference for ready-built suites over assembling their own hybrid solutions. Suites offer companies the convenience of dealing with fewer vendors and managing the applications to which they subscribe.

Still, the problem lingers of selecting vendors with which to work in the first place, points out Nancy Jamison, contact centers principal analyst at Frost & Sullivan. "With more than 60 providers offering a range of best-of-breed, suite, and point solutions, customers often feel overwhelmed by the profusion of choices, Jamison said in a statement.

Vendors will appeal to businesses by integrating new offerings into their cloud-based solutions, as Read notes "an acceleration of customer interactions to the cloud, driven by hosted digital channels," including chat, social media, mobile apps, Web self-service, and video.

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