SHARE



ABOUT THE AUTHOR


Sheila McGee-Smith
Sheila McGee-Smith, who founded McGee-Smith Analytics in 2001, is a leading communications industry analyst and strategic consultant focused on the...
Read Full Bio >>
SHARE



Sheila McGee-Smith | May 18, 2016 |

 
   

NICE Day for inContact

NICE Day for inContact In a gambit aimed in part at gaining cloud expertise, NICE buys SaaS provider inContact for $940M.

In a gambit aimed in part at gaining cloud expertise, NICE buys SaaS provider inContact for $940M.

Israeli software provider NICE Systems today announced its intention to purchase Salt Lake City-based inContact, a provider of cloud contact center software.

NICE, which reported 2015 revenues of $927 million, has 2,700 employees. inContact, with more than 1,000 employees, had 2015 revenues of $233 million. At this deal's $940 million price tag, NICE bought inContact for over four times revenue, right in the expected range in the software-as-a-service market.

While NICE has made many acquisitions over the last 10 years or so, this is by far the largest. Given that this acquisition is between two publicly traded companies, senior executives were understandably busy with investor briefings today. I was pleased then that Aviad Abiri, NICE's vice president, portfolio sales enablement, and Scott McDonald, inContact's vice president of customer interaction solutions, found time to give me an overview of the rationale for the deal and answer a few questions.

On the face of it, a workforce optimization (WFO) market leader, NICE, is adding a cloud contact center market leader. Arguably other players combine these attributes as well to varying degrees (e.g., Genesys and Interactive Intelligence). Using the slide below, Abiri explained that NICE believes the addition of a strong analytics portfolio to this picture will differentiate NICE and inContact.

A clear impetus for the deal from NICE's perspective is adding inContact's cloud expertise, both from the application and infrastructure perspectives. "We have to be a player in the cloud. This is in keeping with CEO Barack [Eilam]'s 2020 vision for NICE. We understand that we can't do this on our own," Abiri told me.

As to whether NICE is making a play to get more entrenched in the mid-market, Abiri said "yes and no." It's a yes in that NICE has traditionally addressed the needs of the higher end of the contact center market and inContact is stronger in the mid-market. It's a no because both companies have already been working on expanding their addressable markets, with NICE going down-market and inContact vying for -- and winning -- larger and larger deals. And it's a no, too, because NICE's ultimate intention is to deliver a mature cloud solution for the range of customers from midsized to high end.

"There is an inevitable transition to cloud happening. Even the largest contact centers will go there, and they need a migration path," Abiri said.

The far-reaching implications of this acquisition are reflected in comments I've received from many industry watchers after I tweeted out the news this morning. Barry O'Sullivan, CEO of Altocloud, tweeted, "Wow. A lot of unhappy NICE OEM vendors today." David Stein, UC consultant and No Jitter blogger, commented on LinkedIn, "Very interesting combo. What happens to the existing NICE installed base on competitors' cc platforms?" No Jitter Editor Beth Schultz pondered in an email, "What becomes of the RingCentral contact center story now?"

While I did ask these questions of Abiri and McDonald, they said the announcement is too new for them to have solid answers. As is typically true, NICE's position is that it would like to continue its existing (revenue-generating) relationships. One of these is with Cisco's contact center business, with joint engagements through this partnership mostly for advanced applications (e.g., voice of the customer and customer journey analytics) for on-premises customers, Abiri said.

While I have not had an official comment, I would guess that Five9 -- a close inContact competitor -- will want to find another WFO partner, as NICE has been its go-to WFO partner for larger deals for several years. Verint may be a good prospect, as it will likely not be getting a lot of future deals from its existing inContact relationship.

I'll end with a comment to my LinkedIn post with which I agree. Paul McMillan, a principal consultant at BT Advise, wrote, "Hmm, I'd say good move for NICE."

Follow Sheila McGee-Smith on Twitter and Google+!
@McGeeSmith
Sheila McGee-Smith on Google+





COMMENTS



Enterprise Connect Orlando 2018
March 12-15 | Orlando, FL

Connect with the Entire Enterprise Communications & Collaboration Ecosystem


Stay Up-to-Date: Hear industry visionaries in Keynotes and General Sessions delivering the latest insight on UC, mobility, collaboration and cloud

Grow Your Network: Connect with the largest gathering of enterprise IT and business leaders and influencers

Learn From Industry Leaders: Attend a full range of Conference Sessions, Free Programs and Special Events

Evaluate All Your Options: Engage with 190+ of the leading equipment, software and service providers

Have Fun! Mingle with sponsors, exhibitors, attendees, guest speakers and industry players during evening receptions

Register now with code NOJITTEREB to save $200 Off Advance Rates or get a FREE Expo Pass!

December 13, 2017

The two major vendors in the Unified Communications space, Cisco and Microsoft, are both strongly promoting their cloud UC deployments. If cloud UC is on your enterprises roadmap, but you dont want

November 29, 2017

As video conferencing use rises in the enterprise, businesses are looking for ways to bring this technology out of traditional conference room and make it more broadly accessible. That's made the h

November 1, 2017

Your customers (internal and external) demand that you offer them the ability to connect by any means. With the adoption of cloud communications tools you now have access to an expanded portfolio o

November 30, 2017
With a ruling on the FCC's proposed order to dismantle the Open Internet Order expected this month, communications technology attorney Martha Buyer walks us through what's at stake.
October 23, 2017
Wondering which Office 365 collaboration tool to use when? Get quick pointers from CBT Nuggets instructor Simona Millham.
September 22, 2017
In this podcast, we explore the future of work with Robert Brown, AVP of the Cognizant Center for the Future of Work, who helps us answer the question, "What do we do when machines do everything?"
September 8, 2017
Greg Collins, a technology analyst and strategist with Exact Ventures, delivers a status report on 5G implementation plans and tells enterprises why they shouldn't wait to move ahead on potential use ....
August 25, 2017
Find out what business considerations are driving the SIP trunking market today, and learn a bit about how satisfied enterprises are with their providers. We talk with John Malone, president of The Ea....
August 16, 2017
World Vision U.S. is finding lots of goodness in RingCentral's cloud communications service, but as Randy Boyd, infrastructure architect at the global humanitarian nonprofit, tells us, he and his team....
August 11, 2017
Alicia Gee, director of unified communications at Sutter Physician Services, oversees the technical team supporting a 1,000-agent contact center running on Genesys PureConnect. She catches us up on th....
August 4, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, has lately been working on integrating enterprise communications into Internet of Things ecosystems. He shares examples and off....
July 27, 2017
Industry watcher Elka Popova, a Frost & Sullivan program director, shares her perspective on this acquisition, discussing Mitel's market positioning, why the move makes sense, and more.
July 14, 2017
Lantre Barr, founder and CEO of Blacc Spot Media, urges any enterprise that's been on the fence about integrating real-time communications into business workflows to jump off and get started. Tune and....
June 28, 2017
Communications expert Tsahi Levent-Levi, author of the popular BlogGeek.me blog, keeps a running tally and comprehensive overview of communications platform-as-a-service offerings in his "Choosing a W....
June 9, 2017
If you think telecom expense management applies to nothing more than business phone lines, think again. Hyoun Park, founder and principal investigator with technology advisory Amalgam Insights, tells ....
June 2, 2017
Enterprises strategizing on mobility today, including for internal collaboration, don't have the luxury of learning as they go. Tony Rizzo, enterprise mobility specialist with Blue Hill Research, expl....
May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.