What’s Next for the CCaaS Market?

What's next for the contact center-as-a-service (CCaaS) market?

This question is being asked by contact center-as-a-service (CCaaS) vendors, financial analysts who buy/sell publicly traded stocks, enterprises considering an acquisition of one of these solutions, and pundits like me. Part of the answer is obvious: increase CCaaS adoption by selling these solutions to companies that are still using premises-based contact center infrastructure (automatic call distributors (ACDs), dialers, self-service). Since the contact center adoption rate for CCaaS is 28.9 percent as of year-end 2022, there are still millions of seats to move to the cloud.

The Traditional Market Opportunity

As CCaaS vendors pursue opportunities, they are doing so with more feature-rich and sophisticated offerings that leverage artificial intelligence and automation. These platforms also come with expanded workforce engagement management capabilities, including recording, quality management, interaction analytics, workforce management, surveying/voice of the customer, performance management, knowledge management, robotic process automation, gamification, and other modules. While the numbers vary, CCaaS vendors typically earn an incremental $15 to $35 per seat per month for each of these WEM applications. And providers using a consumption-based pricing model also realize a significant revenue uplift from adding and selling WEM functionality. Between the potential to sell CCaaS to first-time contact center users, enterprises looking to replace an existing cloud solution with a more reliable one, and the addition of WEM functionality, the more than 200 competitors can stay in their lane and deliver double-digit growth for the next five years. This is possible because the total addressable market (TAM) for CCaaS is in the mid double-digit billions.

The Non-Traditional Market Potential

The conventional CCaaS market is large and lucrative; however, it has its limits: there are only so many customer service, sales, and collections organizations that require contact center functionality. But if we look beyond the core user base to less traditional uses of these solutions, the TAM could be more than double what it is thought to be today. Below are some of the potential less-common use cases for CCaaS and other related contact center solutions:

  • Anyone who works at home full time or on a hybrid basis;
  • Field service and dispatch;
  • Marketing;
  • Healthcare professionals (in the office and the field);
  • Financial advisors; 
  • Accountants/other finance professionals;
  • Lawyers;
  • Researchers;
  • Human resources managers;
  • Hiring and intake specialists;
  • Back-office employees;
  • Support resources; and
  • Others.

These roles are ideal for contact center technology because they all need to be in constant contact with their operations. And in many of these examples, it's imperative for their organization to be in constant contact with them. Consider, for example, the need for hospice workers to remain in communication with their managing office so they know the employee is safe and when they can be deployed to another location. The more complicated and distributed the world, the greater the need for mobile-enabled contact center technology to provide employee tracking, oversight, and support. And while these technologies are necessary for the business, they are often as critical for employee safety.

The cloud and mobility are fundamental enablers helping to change how contact center systems and applications are delivered and applied. These technologies have opened the door to all kinds of unique and highly valuable use cases. The CCaaS market has never been stronger and better positioned for success. Today's AI-enabled platforms are introducing new capabilities and enhanced functionality that benefit their traditional constituents as well as a broadening group of non-traditional users. CCaaS functionality is also starting to be embedded in third-party solutions, further expanding their access to the market.

Donna Fluss, president of DMG Consulting, is an expert on contact centers, analytics, and back-office technology. She has 30 years of experience helping organizations build contact centers and back-office operating environments and assisting vendors to deliver competitive solutions. She can be reached at Donna.Fluss@dmgconsult.com.