This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Clouds Make Strange Bedfellows
In my recent NoJitter blog Cloudy with a Chance of Synergy, I talked about how previously difficult or impossible synergies are becoming real. An interesting side effect of this new cloud-based collaborative dynamic is the changes that have arisen when it comes to alliances, rivalries and industry partnerships.
In industry after industry we have seen the nature of competition disrupted, resulting in many sleepless nights. This transition has often been total, with the Internet and Internet technologies completely changing the marketplace landscape. Retail, media, publishing, travel, entertainment - the list goes on. New competitors, unburdened by the restraints of old ways, have completely upset entrenched companies and whole industries.
Those preexisting companies who have survived the turmoil have needed to change, evolve and adjust their circadian rhythms to survive. In the communications industry, the cloud is bringing yet more fevered dreams of competitive change.
Large firms used to be able to dominate whole market segments. Like a destination resort holding out the "No Vacancy" sign, they organized the sleeping arrangements in their marketplace. If change were to come, it often took decades for their influence to erode or for competitors to make measurable dents in their dominance. Companies that wished to work with the larger firms needed to tuck in those hospital corners of programmatic requirements and strict bedtime regimens imposed by the dominant players.
The industry of companies who provide contact center applications is a prime example of how things are changing still. Avaya, Nortel Enterprise (now part of Avaya), Cisco and Genesys dominated. Companies including Aspect, InContact, Interactive Intelligence and others barely wrinkled the top covers of significant market share. They laid their sleeping bags down far from the warm glow of the campfire at the marketplace center. But now, with the advent of Contact Center Communications as a Service (C CaaS), restless nights for the dominant players abound.
The fundamental nature of competition in the contact center industry is under assault as new competitors seemingly spring from every angle. Customers can now choose from dozens of new offerings delivered from the cloud by companies including LiveOps, Five9, 3CLogic, Evolve IP, Volcalcom and others. Even newer players including Twilio emerge to offer new flexibility and convenience.
No longer do enterprise organizations need to deploy massive hardware infrastructures to take advantage of advanced customer experience tools. Companies that wish to try out a new approach or supplement existing deployments can diversify their investments with applications delivered via the cloud. The change this dynamic has created is dramatic ... and accelerating.
An example is Twilio. Participants in the recent Engineering the Customer Experience roadshow left these events with a Chromebook, a Plantronics headset and a Twilio account. They were told that they carried away all that is needed to establish a state-of-the-art contact center.
Those who have been in this industry will be skeptical. The lovers of Doctor Erlang might swoon. Those who have made a career solving thorny challenges, including putting CRM platforms and ERP system to work in service to the caller, may bristle. Real questions certainly remain about how a Twilio might compete against the entrenched interests of a company whose power becomes threatened. A friend of mine likes to point to the way in which companies including Vonage were anticipated to sweep away the telecom giants and how we awoke to a realty that dawned far from the initial expectations.
Although I accept my friend's analogy as valid, I think there is a bit of a difference when it comes to cloud-based contact centers. Cloud-based contact centers disrupt the competitive landscape, but they don't necessarily disrupt from a technical integration standpoint in the way Vonage may have promised in its market. The impact of cloud contact center is more subtle. Cloud-based contact centers don't necessarily displace as much as they subvert. Cloud-based contact center applications can cohabit comfortably with existing investments.
Enterprise organizations don't necessarily need to abandon their investments to add the capabilities offered by the cloud providers. Examples include that of a new regional office. Rather than extend investments into existing infrastructures, companies can use the cloud to bring on new capacities for the remote branch.
It used to be that integration issues would have weighted such deployment choices in favor of continued investments in the incumbent. But new protocols, methods of delivery and the opening up of once-propriety systems changes the linens and thus has made the accommodations more comfortable. Although such deployments still incur challenges, the cost/benefit scales are tilting in favor of greater comfort in diversification.
Further accelerating this trend is the fact that the larger competitors see that change is coming. Cisco's Finesse platform, for instance, is purpose-built to be the foundation for a new industry of software development companies who will leverage Cisco's foundation to create new ways of serving customers. Avaya's Collaboration Environment is intended to create a marketplace for new development in which both customers and third-party providers can take advantage of the underlying application value in Avaya's core products.
These factors add up to significant shifts in the nature of competition in the contact center industry brought on by the cloud. Per our analogy, perennial campers need to be willing to accept new bunkmates. The bed is being remade in the decades-old competitive landscape. We see a renewed willingness of customers to explore new options as we see a slew of new players bringing fresh possible lodging arrangements to house customer's requirements. The new competitive responses of the larger players to the technological and economic changes are beginning to add momentum.
Competitors who once shunned cooperation need to slide over and make room for new alliance bedfellows. Those who don't may find that there is no room at the inn as the contact center applications industry renews.