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Hosted Contact Center (Strategic Focus) Market Study Published: April 2008 Pages: 39 Tables: For full details, please email keithw@cmsinfo.com From: GBP 1697.50 Research from: Datamonitor Sector: Information & Communications Technology

Hosted Contact Center (Strategic Focus)

'Hosted Contact Center (Strategic Focus)' is a report from Datamonitor, a leading provider of online data, analytic and forecasting platforms for key vertical sectors.

Introduction

For the past 10 years the primary motivation to purchase hosted contact centers has been to reduce cost. But if growth is to continue, then vendors must look beyond cost as a marketing message. Vendors need to shift their marketing campaigns to address business processes.

Scope

Market Opportunity: Hosted contact centers play a strategic role in an organization Technology Evolution: Many technology debates arise from new-generation software-based platforms Customer Impact: Vendors must know the pain points if they are to understand the customer Go to Market: How to position the solution to Service Providers and end-users

Highlights

Hosted contact centers were seen as solutions which were geared for the low end of the enterprise market. They were seen as providing basic contact center functionality, namely network routing. However, over the past 15 years hosted contact center technology has developed. The hosted model goes beyond pure network routing.

Reasons to Purchase

Understand the key drivers in purchasing hosted contact centers. Discover the impact SIP will play on hosted contact centers. Realize the growing importance of Unified Communications in the context of hosted contact centers.

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Table of Contents

Overview 1
Catalyst 1
Summary 1
Key Messages 2
Unified Communications and hosted contact centers make a formidable partnership 2
IP in hosted contact centers has led to an increased take-up in SIP architectures 2
Hosted contact center are business not technology solutions 2
Table of Contents 3
Table of figures 4
Table of tables 4
Market Opportunity: Hosted contact centers play a strategic role in an organization 5
The hosted model has evolved over the past 15 years 5
A quick history on the contact center 5
The hosted contact center arrives and further disrupts the market 6
The hosted contact center market is set to grow by 45.3% over the next 5 years 7
The drivers for hosted contact centers is a combination of meeting organizational change and technology requirements 8
The nascent hosted Unified Communications market is a hook to bait enterprises 10
The product lifecycle for hosted UC will begin through hosting component parts 11
Hosted UC and Hosted Contact Centers have one major commonality: reducing OpEx and CapEx 12
Vendors need to promote hosted UC hook to reel in mid-sized contact centers 13
Business continuity and resilience is an important hook for vendor's to bait contact centers 13
The mid-market will be most vocal for hosted contact centers, particularly in the US and Western Europe 14
Multi-tenanted environments will be more attractive to cost-conscious SMBs 14
Economic slowdown will accelerate uptake of hosted contact centers 15
Technology Evolution: Many technology debates arise from new-generation software-based platforms 17
The migration from a premise-based to a hosted contact center 17
The next step in the evolution of managed services is the deployment of a hosted contact center 17
Hybrid Solutions are a valid alternative to pure hosted environments 18
Multi-tenant platforms are not complex but uptake is slow in WE 19
The evolution of the PSTN to IP plays an important role in the development of hosted contact centers 19
A vendor's dummies guide to contact centers in a PSTN environment 20
Dummies guide to contact centers in an IP environment 20
Hosted IP contact centers rely on multi-tenanted environments 21
The function of IP in the hosted contact center raises the debate between SIP and H.323 21
Key differences between SIP and H.323 21
Dummies guide to H.323 22
Dummies guide to SIP 22
SIP vs H.323: which horse wins in the multi-channel and hosted environment? 22
Over time CTI sales will drop as SIP becomes common in hosted contact center environments 23
Quick overview of CTI 23
CTI in a SIP environment 24
New applications have evolved to take advantage of hosted contact center platforms 24
Workforce optimization will become more accessible in a hosted environment 24
Middleware vendors acquire contact center vendors to facilitate customer interaction routing 24
Customer Impact: Vendors must know the inhibitors to purchasing hosted solutions if they are to understand the customer 26
Existing contractual arrangements can hinder hosted uptake 27
SPs offering complementary services should enhance existing contractual arrangements 27
Enterprises that entering into arrangements with new entrants is a growing concern among SPs 27
Vendors and SPs need to market a transparent solution to end-users. 27
Sell business solutions not technology solutions 28
For vendors contact center de-centralization is good for short term revenue, but hosted environments lead to long term revenues 28
Hosted contact centers can bridge the gap in asset consolidation post-merger/acquisition 28
The hidden cost of a contact center is driving up the price of hosted models and repelling users 29
Customers do not understand the true cost associated with a hosted contact center 29
Contact centers are a large drain on an enterprise's cash flow 29
Customers are price sensitive and vendors need to be able to push the right buttons with proper purchasing options 30
Usage - based pricing for contact centers 30
Concurrent verses log-in pricing 30
Bundled minutes and contact center services 31
As a result of recent acquisitions hosted CRM vendors have influenced hosted contact center prices 31
Go to Market: How to position the solution to Service Providers and end-users 32
The hosted contact center supply-chain revealed 32
Vendors explaining the different hosted delivery models can confuse end-users 33
Vendors as implementers in the value chain is a new phenomenon to the hosted contact center 33
Combining vendor, SP and consultancy firms competencies can strengthen a hosted solution 34
The increasing market for mobile solutions will impact go-to-market strategies 34
Mobile solutions will transform the hosted contact center 34
Enterprises will continue to invest in all mobility technologies over the next two years 35
Recommendations 35
Vendors, SPs and ASPs need to understand the business process to successfully sell hosted solutions 35
Vendors should invest in SIP as hosted IP contact centers will grow in importance 35
Vendors must market Unified Communications to hosted contact centers 35
APPENDIX 37
Definitions 37
Automatic call distributor (ACD) 37
Capital Expenditure (CapEx) 37
Computer telephony integration (CTI) 37
Field worker 37
Operational Expenditure (OpEx) 37
Private Branch Exchange (PBX) 37
Methodology 37
Further reading 37
Ask the analyst 38
Datamonitor consulting 38
Disclaimer 38
List of Tables
Table 1: Hosted Agent Positions, 2006 - 2012 (000s) 7
Table 2: Typical contact center costs in developed markets 30
List of Figures
Figure 1: Call flow in a traditional contact center 6
Figure 2: The pace of hosted contact center agent positions will accelerate between 2006 - 2012 8
Figure 3: The hidden costs to contact center implementation 9
Figure 4: UC has the ability to connect a customer to any part of the organization by any means 11
Figure 5: Hosted UC Product Lifecycle 12
Figure 6: Evolution and sizebands of hosted contact center services in US and WE 15
Figure 7: Evolution of hosted contact center services 18
Figure 8: Multi-channeled hosted contact center components: SIP and H.323 comparison 23
Figure 9: Regional differences in barriers to uptake of hosted contact centers 26
Figure 10: Hosted contact center value chain 33

For full details, please email keithw@cmsinfo.com

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