There's a lot going on in the contact center space these days. The big headline in the past week was the news--still unconfirmed as I write this--that Alcatel-Lucent planned to sell its Genesys subsidiary to a private equity firm, Permira, for $1.5 billion. That was significant not only because it would create a new (or new/old) standalone contact center software player; just as telling was the fact that Permira had reportedly planned originally to seek acquisition of the entire ALU Enterprise business unit, but scaled back its plans to go for Genesys alone. Our coverage on the Genesys-Permira reports, along with some interesting discussion in Comments about the purported price, is here.
One of the items I cited in that piece is a report of market research that should have Genesys/ALU/Permira worried—and indeed, that should be unsettling to Avaya, the longtime North American market share leader in contact center software. This article claims that unspecified "analyst reports" show Cisco with 25% of the overall contact center market, moving them ahead of Genesys into (a still fairly distant) second place behind Avaya. The article even claims that Cisco has passed Avaya and moved into the lead in the market segment of IVR ports shipped. The thinness of the sourcing makes me take this all with a grain of salt, but anecdotally we’ve heard people in the industry suggest that Cisco has been gaining ground in this market--and despite the bad press Cisco has gotten this year, any time you’ve got them gaining on you, you can't rest easy.
Clearly when Cisco gains in the contact center, the most likely driver is simply its continued and growing lead in the overall IP-PBX/communications market. For the past several years, Cisco has used data switching and routing to pull voice/PBX along, but its contact center offering was not powerful enough to win it inclusion in many deals, relatively speaking. Now Cisco looks like they're managing to use the data/voice infrastructure sale to pull contact center along—again, a dangerous prospect for market leader Avaya.
The article on the market share data also highlights Cisco's integration of social media monitoring and analytics to its contact center package, via the acclaimed Social Miner software, which was released late last year and won the Best of Enterprise Connect award in March. Social Miner's a great product and I'm sure it's helped Cisco position itself as a thought leader in contact centers. But I still don't see a lot of evidence that contact centers are yet ready to really leverage the data that some of the new software from multiple vendors can now provide them from social networking sites. There's a lot of interest, but I'm not seeing this as a buying factor--yet.
My final contact center data points come from Interactive Intelligence, which made an announcement this week around hosted contact center, and shared some numbers that make a convincing case that their customer base, at least, is embracing a contact-center-in-the-cloud play. The company reported that, for Communications as a Service (CaaS):
* Revenue grew 58% in the first six months of 2011
* Orders grew 146% in the first six months of 2011
* CaaS orders made up 26% of total order dollar volume in the first six months of 2011
* CaaS customer turnover rate is less than 4 percent
So, to recap: A major player, second- or third-place in market share, may soon be an independent company, unconnected to any PBX vendor, with vendor-neutral software and, now, a vendor-neutral ownership position. At the same time, the biggest and still most formidable player in communications to date appears to be making a run at market leadership for the contact center. And two major new technology trends—social media integration and Communications-as-a-service/hosted/cloud—appear to be ready to have a real impact in the market.
If you haven't revisited your contact center strategy in awhile, or if you're revisiting your entire communications strategy, these developments bear very close watching.
