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Talkdesk Sitting in an Enviable Position
Talkdesk is somewhat an anomaly. Engineer Tiago Paiva, who founded the company 10 years ago after winning a hackathon for a prototype he created, remains at the helm. Despite its $10 billion valuation, the company still embraces an entrepreneurial, turn-on-the-dime innovative spirit.
Though big changes are inevitable, Talkdesk is in an enviable position.
Worldwide, Talkdesk is one of 803 privately held organizations that have reached at least $1 billion in valuation — otherwise known as “unicorns.” And not only is Talkdesk on the list along with companies such as SpaceX, Instacart, and Fanatics, but it holds the No. 32 spot. Talkdesk is now large enough to hire a chief financial officer (Sydney Carey), and its recently announced series D funding brings total investments to $498 million.
So what do all the impressive financial figures mean for the cloud contact center-as-a-service (CCaaS) provider? They position Talkdesk for drastic change, whether it remains a standalone company, is acquired, or expands through acquisition.
Rapid Growth of CCaaS
First, it’s important to understand how rapidly CCaaS is growing. In November 2020, 25.8% of companies were using CCaaS, according to Metrigy research data. By April 2021, that figure had reached 35.8%. The pandemic-driven move to home offices propelled companies not only to adopt CCaaS, but adopt more of it as they expanded their contact center staffs.
Additionally, new artificial intelligence-driven applications, improved analytics, and automation helped jolt business metrics, including revenue, operational costs, customer ratings, and agent efficiency, to new levels.
Based on our research, the annual recurring revenue for CCaaS from U.S.-based companies is now $2.69 billion, moving to $3.2 billion in 2022. (This factors into consideration our research showing that 72.7% of U.S. companies have contact centers, with an average of 44 agents for small, 90 for midsize, and 300 for large companies with varying revenue based on size.)
Customers are looking for many capabilities when it comes to selecting CCaaS providers, among them technology innovation, value, customer service, and integrations.
Unified communications (UC) and contact center platform integrations are crucial. In 2019, 41.5% of companies had integrated their UC and contact center platforms to some degree. By late 2020, that figure reached 62.8%, and organizations are continuing to leverage the platform integrations by bringing video into contact center interactions; connecting non-agent employees to customer calls to address vital issues; and using team collaboration workspaces to connect contact center agents with marketing, sales, product development, and others.
Most major contact center providers have their own integrated UC offerings. Consider 8x8, Avaya (albeit now through its partnership with RingCentral), Cisco, Enghouse, Genesys (through its Interactive Intelligence acquisition), NICE, RingCentral, and Vonage. Five9 will have its own UC capability once the Zoom acquisition is finalized.
Does that mean Talkdesk must have its own UC capability, as well?
Not necessarily. It means it needs additional focus on UC/contact center integration, but it’s very well positioned to do so.
Talkdesk could remain independent. With current integrations, Talkdesk customers can use Zoom for voice, and Microsoft Teams or Slack for messaging. If Paiva takes this path, Talkdesk must expand that portfolio, focus on tight integrations, and market solutions rather than simple integrations alone. Given its large ecosystem of technology partners and existing solutions, along with its own suite of AI-empowered services, workforce engagement, analytics, and automation, it could deliver even more powerful solutions.
The benefit for Talkdesk is that it would remain the truly “independent” CCaaS provider. Companies that want a leading CCaaS solution, but don’t want to be tied down to that provider’s UC solution, would know Talkdesk has worked to tightly integrate with a bevy of UC providers.
An independent Talkdesk also could expand from there and strengthen select areas with its own acquisitions, mergers, or enhanced partnerships. For example, it could expand visual engagement with services such as those offered by leading companies like Glance, Glia, LogMeIn, or Surfly. Or, it could strengthen survey tools, given customers are focused on voice-of-the-customer programs, with companies such as Concentrix, Medallia, Qualtrics, or SurveyMonkey.
Another option is that Talkdesk is acquired. Microsoft and Salesforce are two viable options. Both are two large companies that, frankly, need a contact center solution. Talkdesk has existing partnerships with both and is on the Salesforce Appexchange and Microsoft AppSource.
Why Microsoft has yet to offer a contact center solution is beyond me. Microsoft has the largest UC customer base, and it also has a CRM solution. Combine that with the demand for integrated services — not only UC, but also CRM, where 50.3% of companies have completed contact center integrations. Microsoft could dramatically disrupt the CX market with its own contact center offering — particularly one of Talkdesk’s caliber.
Speaking of CRM, Salesforce is another option. Its leading CRM service, coupled with digital CX channels, would pair well with Talkdesk’s voice, digital channels, AI, and analytics.
Of course, Talkdesk could even develop its own UC solution. Given its spirit of innovation, quick turnaround times, and smart product development team, led by Charanya “CK” Kannan, this isn’t out of the question. However, it would be easier and likely less expensive to partner, acquire, or be acquired. Companies like 3CX or CoreDial may be attractive UC acquisition targets for Talkdesk because they are smaller (and thus potentially more affordable) and have complete portfolios. Each has a basic CCaaS offering, which would bring in new customers to Talkdesk but also require integration.
Options abound for Talkdesk — and I wouldn’t be surprised if Talkdesk does something unconventional. After all, it’s a unicorn.