In January of this year, Omdia published the annual update of its “Global Contact Center Market Forecast: 2017–23,” which is an in-depth forecast of global contact center agent seats by geographic region of the world with a detailed look at 39 countries. Included in this report was an updated forecast of global agent seats operating in the cloud versus on customer premises. As the cloud contact center market continues to expand at the expense of on-premises systems, an increasing portion of total agent seats continues to shift into the cloud.
This recent forecast of the cloud market share of agent seats shown in Figure 1, projected the cloud share growing from 21.3% of total seats to 39.7% from 2017 to 2023. This chart represents a cloud contact center agent position compounded average annual growth rate (CAAGR) of 11.6% globally over that period.
COVID-19 has affected more than 180 countries, and Omdia has been tracking cloud contact center vendor activities driven by customers doing their best to maintain business continuity through this disruptive period.
Over the last two months, there has been an obvious and significant uptick in cloud-based agent seat implementations. We expect this trend to continue throughout 2020, and to significantly affect the growth of cloud-based agent seats well into the future. Some of this is due to the expansion of already existing cloud implementations. But according to several contact center vendors, many are new cloud-based systems that have resulted from the transition of premises-based contact centers to home working environments. This transition is a way of maintaining customer engagement operations during the current international shelter-in-place government-issued edicts.
As depicted in the Omdia forecast, the penetration of global cloud contact center seats has grown consistently for more than six years. According to recent reports from several major contact center providers, the COVID-19 pandemic has provided a strong boost to this growth trend over the past two or three months as vendors have reacted to their end-users demands to shift agents to homeworking environments at a rapid pace.
The global pandemic, although terribly disruptive and costly to many of the world’s businesses, is very timely for the cloud contact center industry – which has been gradually proving itself in terms of previous concerns about security, reliability, and scalability – as well as some businesses’ reluctance to implement cloud solutions in its enterprises having less than fully-depreciated premises-based contact center systems. The timing ofCOVID-19 may have created the “perfect storm” scenario for the cloud contact center marketplace, as these previous concerns have been waning, and the larger enterprises with on-premises systems required a strong and tested justification to transition to the cloud.
Omdia has discovered that end users now realize the benefits of using cloud-based solutions as a contingency back-up to existing solutions for disaster recovery use during times of natural disasters, such as earthquakes and hurricanes, terrorist attacks, and now pandemics. Disaster recovery is an area that Omdia believes cloud contact center providers have been slow to capitalize on in the past. Logically, going forward, it would be good business sense for cloud contact center providers to offer pre-configured cloud solutions to act as back-up for premises-based customer care solutions to guarantee business continuity during times of unplanned service disruptions.
Such systems could be offered with a reduced pricing schedule when not required for during normal business operations and stepped up to regular pricing schedules when essential for business continuity during emergency situations. This service can be provided as an insurance policy that we believe enterprises would be willing to purchase, especially now that COVID-19 has made clear the need for such an offering to provide the rapid transition to back-up systems to maintain essential businesses operations.
According to GDP recalculations by COVID-19 affected countries there are strong indications that there will be a minimal level of international business growth this year. However, the global cloud contact center market, measured in cloud agent seats implemented, will most certainly experience a considerable boost in business activity. It is conceivable that the cloud-based agent seats added globally will significantly surpass our original estimate of 384,000 incremental cloud seats in 2020. This could drive our original market penetration up by two or more percentage points above the 3.2% currently forecasted for the year. That would increase the estimated 2020 end-of-year penetration of cloud-based seats from the previously forecasted 31% to 33 or 34%.
Omdia doesn’t expect the overall cloud penetration of contact center agent seats will ever hit a level above 75% globally, however, the predicted timeline for hitting that high point has likely been reduced by at least one year or more. That peak could be attainable even earlier if the impact of the COVID-19 pandemic were to be extended to the end of 2020 or early 2021, forcing more agents to operate in the cloud.
Despite the current business turmoil, the ongoing COVID-19 pandemic provides a call-to-action and an enormous opportunity for cloud contact center providers. That is to grow by increasing current seat implementations and market penetration while proving their companies and their products can respond quickly to changing industry needs.
To succeed, they must meet the customer’s challenges for rapid remote site installations and maintain high quality, reliability, and scalability standards while continuing to serve end-users seamlessly across multiple channels. The companies able to meet the challenges and take advantage of the opportunity will be those that survive to lead the customer engagement cloud transition well into a bright future.
