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Consolidation, Platforms, and the Future of the Industry
Two big pieces of news on industry consolidation dominated the headlines this week, starting off with the announcement of Zoom’s planned blockbuster acquisition of Five9 as its entry into the contact center market. (See No Jitter’s coverage from Sheila McGee-Smith, Robin Gareiss, and Zeus Kerravala.) Later came the news from Salesforce that it had closed on last year’s announced acquisition of Slack.
The Five9 acquisition is Zoom’s biggest platform play to date. The company has seen strong adoption for its Zoom Phone offering, broadening its appeal to the enterprise from just video to include telephony. But Five9 will instantly make “Zoom contact center” a real thing.
And while Salesforce has yet to reveal exactly how it’s going to integrate Slack, CEO Mark Benioff told Yahoo Finance last month that Salesforce would do nothing less than “rebuild all of our technology, once again, to become Slack-first to help our customers have a harness to work in this new world.” Discussing the shift to hybrid work, Benioff went on to say that being successful from anywhere will take a platform like Slack.
I’ve written before about how this question of the platform has moved to the fore as enterprises come out of the pandemic. It’s become a cliché to talk about how the pandemic accelerated digital transformation — a decade in six months, all that stuff. But it’s also looking like the pandemic is going to drive industry consolidation in its wake.
That’s happening on two levels: Players that were already directly in the collaboration space — Microsoft, Cisco, Zoom, RingCentral, and all the others — have to evaluate their platform strategies and at least have an answer for how they’ll provide a platform that covers the gamut from telephony to contact centers, video and web conferencing, with integration into business processes. For example, the biggest question in the wake of Zoom-Five9 is whether Microsoft will finally jump directly into the contact center space via either acquisition or internal product development.
But the other axis for consolidation comes from players like Salesforce that hadn’t been what you’d call core collaboration providers pre-pandemic. Salesforce’s Slack acquisition is widely viewed as a step in a more direct challenge to Microsoft across the enterprise software spectrum, including collaboration.
For enterprise communications/collaboration decision-makers, this is news, but it’s not new. Enterprise communications and collaboration have been getting pulled out of their silo ever since Cisco entered the PBX market in the late 1990s.
Communications/collaboration is now fully embedded in the larger enterprise software picture, and that makes players like Salesforce interested in this market in a way they previously weren’t. Part of it is natural trends that were playing out more deliberately, only to be accelerated by the pandemic. Because of how the pandemic changed work, enterprise software absolutely needs a communications/collaboration element.
It’s an exciting time in the industry, and we’ll be discussing all these mega-trends at Enterprise Connect 2021 at the end of September. We’ll get a sense of the strategies of some of the leading players with keynotes from Microsoft, Cisco, Zoom, RingCentral, and AWS, and we’ll have General Sessions featuring thought leaders from these companies and more, plus my colleague Beth Schultz’s sit-down with enterprise decision-makers, and a discussion of contact center trends with Sheila McGee-Smith and a panel of leading technology providers.
I hope you can join us in Orlando for what’s going to be an incredible event — a chance to get back and network, hear from all the best independent experts, and see where the industry’s going. Just remember, use the code NJAL200 when you register to save $200 off the current rate.