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Reassess. Establish Partnerships. Consolidate.

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Thanks to the COVID-19 crisis, businesses and organizations have had to develop short- and long-term strategies for supporting at-home workers, ensuring business continuity, and proceeding in a post-pandemic world. While organizations around the globe are dealing with new workplace realities, the vendors supplying these organizations with communication tools and technologies must adapt and adjust their strategies to meet ever-changing needs.
 
In many cases, vendors’ business strategies and roadmaps from 2019 have to be cast out the window, as 2020’s challenges require new approaches and strategic direction to address our new reality. Business communication vendors are actively reassessing their strategies, product/service portfolios, partner relationships, and more, to adapt themselves to these latest obstacles.
 
Design a New Strategy
The new workplace will need fresh solutions and technologies, and vendors must proactively identify their roles. Each must also try to find answers to the countless questions about the future. Some include: What will the workplace look like tomorrow? How can our customers ensure workers’ safety while attaining maximum productivity? How are customer expectations changing, and how will businesses adapt their customer service and customer relationship models?
 
As business communication vendors develop post-COVID strategies in light of new demands, they should leverage learnings and experiences from the past few months to shape the path forward. At this juncture, it’s essential to identify gaps in product portfolios and offerings, then find ways to fill the holes with the appropriate offers that meet customer requirements. Inevitably, this will lead to vendor consolidation—as many vendors recognize that they need more complete solutions. It’s more expedient to acquire the necessary technology and expertise rather than build it from scratch.
 
Based on discussions with leading vendors, consultants, and customers, I came to an important - but not shocking - realization: the rising demand for single- vendor platforms will lead to increased industry consolidation, and contact center vendors will be key acquisition targets. Here’s some background:
 
For the most part, enterprise customers have found it is easier to manage an at-home workforce with a single-vendor platform, and those providing communications, collaboration, and contact center solutions will continue to gain popularity. Of course, best-of-breed contact center offerings will always play a key role, especially if the contact center is viewed as a stand-alone entity. However, in most cases, a single solution for enterprise UC, collaboration, and contact center from a single vendor can be simpler to manage and support, while providing enhanced internal communication capabilities throughout the organization.
 
In addition to “legacy” providers such as Avaya, Cisco, and Mitel, several UC and UCaaS vendors tout their single platform solutions, notably 8x8, RingCentral, Vonage, and Edify. Having a single-stack solution provides a seamless user experience while simplifying management and control for the IT staff.
 
A lot of the leading business communication vendors don’t have complete platform offerings and rely on integrations and partnerships for the capabilities they lack. Microsoft partners with several contact center vendors, for example, such as ComputerTalk, Enghouse, Five9, Genesys, Landis, NICE inContact, and several others. Zoom also partners with several contact center vendors, including Genesys, Five9, Nice inContact, Talkdesk, and Twilio.
 
Additionally, some of the UC and UCaaS providers that offer complete suites with communications, collaboration, and contact centers also partner with third-party vendors to provide enhanced capabilities. For example, while RingCentral has its own contact center capabilities, it partners with NICE inContact for more complex contact center functionality. Fuze added Serenova (which recently merged with Lifesize) to provide enhanced contact center capabilities on top of its existing contact center offering.
 
Industry Consolidation Fills the Gaps
Industry consolidation is nothing new, but has been kicked into high gear recently, and will continue at a rapid pace as business communication vendors try to fill their gaps to provide complete UC, collaboration, contact center portfolios. There’s a long history of vendors making strategic acquisitions to round out their product portfolios. Some examples include:
  • Cisco’s acquisition of Broadsoft helped Cisco move into the UCaaS and CCaaS space more quickly
  • Microsoft acquired Yammer for collaboration capabilities, and more recently, Metaswitch to help support its 5G efforts
  • Amazon’s acquisition of Biba Systems led to its collaboration application, Amazon Chime
  • Vonage acquired NewVoiceMedia (contact center) and Nexmo (CPaaS) to provide a single platform solution
  • 8x8 acquired Contactual for contact center capabilities, and more recently, the Jitsi open source video communications technology for video capabilities and Wavecell for CPaaS
  • RingCentral added contact center capabilities through its acquisition of Connect First and Dimelo, and team collaboration capabilities through its acquisition of Glip
  • Dialpad acquired HighFive to enhance its video portfolio and capabilities
 
Business communication vendors hoping to shore up their solutions can continue to integrate with contact center partners or take the acquisition path. Often, partnerships lead to acquisitions, but that’s not always the case. I won’t attempt to guess who’s going to acquire which vendor. However, there are several in the contact center space that have strong products and would be good acquisition candidates, including Avaya, Edify, Five9, Genesys, Sharpen, Talkdesk, UJET, and others. While not all of these vendors are actively seeking to be acquired, I expect most would be quite happy to find a home in Microsoft, Amazon, Google, Zoom, or another organization.
 
Vendors exploring the acquisition route have many choices. They should prioritize what matters the most in an acquisition target, whether it’s innovation, research and development (R&D), a large installed customer base, additional portfolio elements (e.g., Avaya offers endpoint portfolio, while both Avaya and Edify offer UC and CPaaS capabilities), strong financials, channel partner relationships, global reach, vision, etc. Determining which elements are most valuable should help identify which vendors to consider more closely as an acquisition target.
 
As business communication vendors review what they’ve learned over the past few months to help guide their short- and long-term direction, expect to see
industry consolidation featuring contact center vendors to be center stage.

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This post is written on behalf of BCStrategies, an industry resource for enterprises, vendors, system integrators, and anyone interested in the growing business communications arena. A supplier of objective information on business communications, BCStrategies is supported by an alliance of leading communication industry advisors, analysts, and consultants who have worked in the various segments of the dynamic business communications market.

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