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Business Success Metrics Underscore Value of Zoom’s Five9 Buy

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Zooms’ planned acquisition of Five9, announced late Sunday as covered in this No Jitter post and our MetriNote, makes sense for a variety of reasons — financially, strategically, and logically. Behind the obvious, though, are some compelling business success metrics that illustrate the benefits to business customers.
 
Zoom announced plans to enter the customer experience (CX) space full-force by acquiring Five9 for an all-stock transaction valued at $14.7 billion, expected to close in the first half of 2022. By combining one of the leading UCaaS platforms with one of the leading CCaaS platforms, Zoom is addressing a key enterprise demand to use a common platform for both customer and employee communications.
 
Based on our contact center research, we know that 62.8% of 700 companies already have integrated UC and contact center at some level, but most have not leveraged the integration fully. Of those companies, the majority is using collaboration apps for contact center agents and supervisors (57.2%) and/or to integrate agents with other employees to collaborate on projects or key customers (56.7%). But some of the more significant benefits still are lacking: Only 35.1% are connecting non-agent experts to address pressing customer issues, and only 33% have fully integrated video into their contact center apps (though 47.6% are using video in the contact center, even if it’s a disconnected, stand-alone application).
 
Results of Integrating UC and Contact Center
The integration of UC and contact center is driving business value already — and the metrics are even better when companies use the same provider for both platforms. It’s important to note, though, that using the same provider doesn’t necessarily mean all applications are sharing the same, native platform. In many cases, companies find success using what they consider a best-of-breed approach with a CCaaS platform from one provider integrated with a UCaaS platform from another provider. Some companies, such as 8x8, Cisco, and Vonage, either already have or are in the process of developing a natively integrated platform. Of those surveyed companies with UC/contact center integration, 61.9% would prefer to use a single provider.
 
Though any type of integration provides benefits, some basic improvements happen right away when buying a UC/contact center solution from a single provider. The average per-agent license cost decreases by 22% when companies integrate UC and contact center because of bundled pricing. In addition, companies rate their contact center providers 16.8% higher when they integrate UC and contact center with the same provider, vs. having no integration.
 
What’s more, our research success group (those who have the highest improvements in their business metrics after a CX transformation) have reported an 86.5% revenue increase, a 14% cost decrease, and a 46.5% customer ratings improvement when they integrate UC and contact center with the same provider.
 
Video Is the Big Benefit
Video for CX (the fastest-growing customer interaction channel of 2021, according to our research) may be the most important result of Zoom’s acquisition of Five9. Zoom offers one of the most widely used and user-friendly video platforms available. Tight integration of that platform with Five9’s will be appealing to CX organizations.
 
Companies using video in their CX transformation projects showed significantly better success metrics, as shown in the chart below. For example, revenue increases by 59.1% when supporting customer interactions via video, vs. only 37.3% when not.
 
Metrigy infographic showing success metrics with/without video usage
Source: Metrigy
 
Among the many use cases for video as a CX channel are allowing the agent to see what customers see when they are trying to fix, install, or assemble a product. “It’s already happening organically, so our ability to bring these things together natively will be a total game changer,” Rowan Trollope, Five9 CEO, said this morning during an investor briefing.
 
Because of the pandemic, people quickly became comfortable with video as a communications channel for personal and business requirements. As the chart below shows, 50.5% of companies using video to communication with customers see benefits in the efficiency of interactions, while 49.2% say it improves their customer relationships. Also important, both customers (39.9%) and agents (36%) have been asking for video interactions.
 
Metrigy infographic showing video for customer interactions
Source: Metrigy
 
Pulling the Pieces Together
This acquisition makes sense for other reasons, as well. Zoom has lacked a CX offering of its own and needed one. Meanwhile, Five9 has been rapidly growing its cloud CX base and partnerships, but it doesn’t have its own UC platform. For example, Five9 has partnerships with AT&T, Mitel, and Nextiva to deliver contact center solutions, along with numerous partnerships for AI, workforce optimization (WFO), CRM, and other areas.
 
The companies plan to continue with an open ecosystem and existing partnerships to offer customers flexibility. During an analyst conference to discuss the acquisition, Zoom CEO Eric Yuan stressed that the company looks at everything from the customers’ perspective. Given the “coopetition” that exists throughout the UC and CX spaces, it’s realistic that such partnerships will continue to meet specific vendor preferences among customers.
 
Five9 will deliver a multi-faceted CX solution for Zoom. Besides the core cloud-based platform, Five9 has strength in AI and WFO, as noted above. Last fall, Five9 acquired Inference Solutions, which provides interactive virtual assistants that many companies and competitors use. This followed its early 2020 acquisition of WFO provider Virtual Observer, to gain functions such as quality management, call/screen recording, surveys, and workforce management. As we’ve found in our research, more than half (54.5%) of companies last year added more WFO applications to their portfolios, underscoring the importance of a solid WFO solution.
 
The key will be how tightly and how quickly the two companies are able to deliver a truly integrated communications platform for employees and customers. During the pandemic in 2020, 64.8% of companies said they were more likely to buy cloud-based applications, and 56.8% of companies that have integrated UC and contact center have a CCaaS architecture. The vendors’ cloud delivery will be another factor that drives CX and IT leaders toward the “new” Zoom.
 
IT and CX leaders who want an integrated solution that can provide any combination of voice, video, messaging, contact center, WFO, and AI should evaluate the Zoom/Five9 capabilities. Of course, with the acquisition not expected to be complete until the first half of 2022, those expecting a common platform will have to settle on existing integrations between the separate Five9 platform and Zoom platform already in place with its established partnership.

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