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2011 - 2012 Hosted Contact Center Infrastructure Market Report

The fourth annual Hosted Contact Center Infrastructure Market Report provides a thorough analysis of this rapidly evolving technology sector. It addresses vendors, product functionality and technology, planned innovation, market trends and challenges, market share, adoption rates, benefits, return on investment, pricing, implementation best practices, customer satisfaction, and company reviews. The Report gives readers a deep appreciation of the full range of hosted contact center infrastructure offerings, their strengths, weaknesses, opportunities and pricing. The 2011-2012 Hosted Contact Center Infrastructure Market Report is specifically designed to give business and IT managers the information and tools to help them select the right solution for their operating environment.

While it does not happen often, every now and again something so compelling comes to market that every vendor wants to be part of it and every user stands to benefit in some way. This is the story of hosted/cloud-based contact center infrastructure. Still an emerging sector by formal definition, this market is maturing rapidly. New vendors and new solutions from existing vendors continue to come to market, making it highly innovative and competitive and giving users an unprecedented number of choices. Today, all but the most traditional contact center users are including cloud-based solutions as part of any selection process.

2011 was an excellent year for the hosted contact center market, as users' needs for virtual, multi-channel servicing infrastructures, and a recovering economy converged to create strong demand. Hosting offers an array of benefits including no major capital outlays, lower start-up costs, faster implementations, scalability, no upgrade fees, and no need for in-house IT resources. Cloud-based providers also have the great advantage of being able to deliver new capabilities and functionality without having to address backward compatibility with older versions or upgrades. This enables them to give users what they want quickly and efficiently - a standout difference from their premise-based counterparts.

While traditional contact center infrastructure market leaders remain on the sidelines trying to figure out how to enter the hosted market without damaging their traditional revenue stream, users have made it clear that they like the option of acquiring all types of contact center solutions and applications on a hosted basis. The hosted vendors are wasting no time improving their solutions' performance and scalability, creating third-party integrations, and investing in enhancements and new functionality to come closer to functional parity with the leading premise-based solutions. DMG expects premise-based leaders to come off the bench with hosted offerings over the next 12 to 18 months.

In the meantime, the premise-based vendors know they are under siege. The hosted market continues to exhibit strong and steady momentum. Seat counts grew by 26.3% between 2008 and 2009, and by an even more impressive 42.4% between 2009 and 2010. This sector's revenue grew by at least the same amount, as prices increased during the year and many vendors expanded their offerings. The 2010 adoption rate of 3.5% is a 29.6% increase from the 2009 hosted contact center infrastructure penetration rate of 2.7%. This significant increase is supported by the 42.4% growth in hosted contact center seats. DMG continues to be bullish about the performance of the cloud-based contact center market, despite the sluggish economy, which is actually one of the key drivers for adopting hosted solutions. DMG predicts the hosted contact center infrastructure market will grow by 25%, 20%, 18% and 18% each year from 2011 to 2014, respectively.

DMG expects hosted contact center solutions to continue to be highly differentiated for the next five to eight years. This puts the burden on end users to carefully review the functional capabilities of all solutions they are considering, especially as the most innovative of the solutions are expected to reach true parity with their premise-based competitors and then surpass them. As the market matures, DMG expects to see continued innovation, specifically around unified communications (UC), routing, social media and desktop analytics.

End users now have more choices for purchasing a contact center infrastructure solution than ever before. Despite the classic benefits of hosted offerings, hosting is not the right choice for all companies. Organizations that require heavy customization, have the resources to maintain a solution, and plan to keep it in place for five or more years are good candidates for the traditional approach. However, DMG recommends that any organization considering an acquisition/replacement of a contact center infrastructure solution add cloud-based providers to their selection process. While the prices for hosted solutions have risen, vendors are flexible and are looking to gain market share.

The 475-page 2011-2012 Hosted Contact Center Market Report is the most comprehensive, fact-based, timely analysis of this technology sector. The Report provides a thorough look at this rapidly evolving technology sector, including trends, challenges, market share, adoption rates, and projections. It details the vendor, product, functionality, technology, pricing, benefits, return on investment (ROI), and best practices information that contact center and IT managers need to determine if hosting is right for them, and to select the ideal technology and partner for their operating environment. This Report covers 13 vendors, eight in-depth and five at a higher level. The vendors covered in detail are: Echopass, 8x8 (acquired Contactual), Five9, inContact, Interactive Intelligence, LiveOps, NewVoiceMedia and Transera. Convergys, Noble, USAN, VoltDelta and West, whose solutions are still emerging, are covered at a high level.

Report Highlights

  • 2011 was a strong year for the hosted contact center market: The benefits of hosting, coupled with the advantage of being able to receive new capabilities and functionality quickly and efficiently, made 2011 a banner year for the hosted contact center infrastructure market. Contact centers of all sizes are realizing that hosting can benefit their organizations and are seriously considering these solutions.
  • Where are the market leaders? Traditional contact center infrastructure leaders have not yet jumped into the fray, but they will have to in order to remain competitive. Users have made it clear they like the option of being able to acquire all types of contact center solutions and applications on a hosted basis. DMG expects that the premise-based leaders will come to market with hosted solutions in the next 12 to 18 months.
  • Hosted vendors can do more with their solutions to attract end users:Cloud-based vendors need to improve their solutions' supervisory environments, predictive outbound capabilities and overall system capacity. Also there is still an opportunity to differentiate their security capabilities, a critical area that continues to require a great deal of attention.
  • The next five to eight years are critical; end users must be vigilant: DMG expects hosted contact center solutions to continue to be highly differentiated for the next five to eight years. During this time, the most innovative solutions are expected to reach true parity with their premise-based competitors and then surpass them. DMG expects to see continued innovation to broaden suites and to enhance UC, routing, social media, desktop analytics and other capabilities.
  • Hosting is not the answer for everyone: End users now have more choice than ever. Despite the benefits of hosting, it is not the universal “right” choice. Organizations that require heavy customization, have internal resources to maintain their contact center solution, and plan to keep it for five or more years are good candidates for the traditional approach.
  • There is more to come for hosted solutions: DMG is bullish about the performance of the cloud-based contact center market, predicting growth of 25%, 20%, 18% and 18% in each of the four years from 2011 to 2014, respectively.

Key Reasons to Buy This Report

  • Overview of hosted/cloud-based contact center infrastructure technology and applications
  • Hosted contact center infrastructure market share analysis, projections and adoption rates
  • Review of the current state of the market and its competitive landscape, including trends, challenges and the overall direction
  • Comprehensive corporate, technical and functional side-by-side comparisons of the vendors and their solutions, including current products, packaged solutions and small and mid-sized business (SMB) offerings
  • An analysis of innovation, including new product features and planned research and development (R&D)
  • A guide for navigating the hosted contact center competitive landscape, including a discussion of market momentum and its impact on premise-based solutions
  • Hosted contact center vendor selection guidelines to help end users acquire the right solution, and best practices for successfully implementing these new applications
  • Benefits and return on investment (ROI) analysis to help prospects build their business case
  • Detailed pricing analysis for leading and contending vendors, and the typical price ranges for the market
  • Comprehensive vendor satisfaction analysis addressing each vendor's products, implementation, service, training, professional services, innovation and pricing
  • Detailed company reports for 13 leading and contending hosted contact center infrastructure providers, including their planned investments
  • Complete Hosted Contact Center Infrastructure Vendor Director

Sample Figure:

Typical Hosted Contact Center Infrastructure Solution

Source: DMG Consulting LLC

Table of Contents

1. Executive Summary

2. Introduction

3. DMG Consulting Research Methodology

  • 3.1. Report Participation Criteria

4. Contact Center Technology and Applications

  • 4.1. The Changing Technology Landscape
  • 4.2. Understanding Unified Communications
    • 4.2.1. What is Presence?
    • 4.2.2. The Future of UC
  • 1. Executive Summary
  • 2. Introduction

3. DMG Consulting Research Methodology

  • 3.1. Report Participation Criteria

4. Hosted Contact Center Technology and Applications

  • 4.1. The Changing Technology Landscape of Hosted Contact Center Infrastructure Solutions
  • 4.2. Will Hosted Solutions Reach Functional Parity with Premise-Based Solutions?
  • 4.3. The Role of Integration in the World of Hosted Contact Center Solutions

5. State of the Hosted/Cloud-Based Contact Center Infrastructure Market

  • 5.1. Hosted Contact Center Infrastructure Trends
  • 5.2. Hosted Contact Center Infrastructure Challenges

6. Hosted Contact Center Infrastructure Innovations

  • 6.1. New Product Features
  • 6.2. Fulfillment Status of 2010
  • 6.3. Upcoming Innovation

7. Hosted Contact Center Competitive Landscape

  • 7.1. Momentum Picks Up
  • 7.2. Vendor Categories
  • 7.3. Impact of Hosting on Premise-Based Vendors
  • 7.4. The Hosted Contact Center Infrastructure Competitive Landscape Guide

8. Hosted Contact Center Infrastructure Vendor Selection Guide

  • 8.1. Hosted Contact Center Infrastructure Vendor Selection Guidelines

9. Vendor Snapshot

  • 9.1. Vendor Strategy and Positioning
  • 9.2. Vendor Offerings
  • 9.3. Packaged Applications
  • 9.4. Small/Mid-Sized Offerings
  • 9.5. Vendor Differentiators and "Sweet Spots"

10. Hosted Contact Center Infrastructure Solutions

  • 10.1. Functional Components
  • 10.2. High-Level Functional Comparisons
  • 10.3. High-Level Technical Analysis

11. Service Delivery Models and Definitions

  • 11.1. DMG Service Delivery Definitions
  • 11.2. Vendor Service Delivery Options

12. Benefits and ROI of Hosted Contact Center Infrastructure Solutions

  • 12.1. Value Proposition
  • 12.2. Return on Investment
  • 12.3. Pros and Cons of HCCI Solutions
  • 13. HCCI Market Share Analysis

14. Hosted Contact Center Market Projections

15. Market Adoption of Cloud-Based Contact Center Solutions

16. Pricing

  • 16.1. Hosted Contact Center Pricing Ranges
  • 16.2. Vendor Pricing

17. Hosted Contact Center Vendor Satisfaction Analysis

  • 17.1. Summary of Survey Findings and Analysis
  • 17.2. Detailed Survey Findings and Analysis
  • 17.3. Customer Background and Insight
    • 17.3.1. Customer Background
    • 17.3.2. Customer Insights
    • 17.3.3. Obstacles to Hosting

18. Hosted Contact Center Infrastructure Technology Analysis

  • 18.1. Detailed Technical Analysis
  • 18.2. Unified Communications
  • 18.3. Multi-Tenancy
  • 18.4. Internet Protocol/Session Initiation Protocol
  • 18.5. Security
  • 18.6. Data Center, Back-Up and Contingency
  • 18.7. Integration Capabilities

19. Detailed Functional Analysis

  • 19.1. Automatic Call Distributor
  • 19.2. Interactive Voice Response Voice Portal
  • 19.3. Computer Telephony Integration
  • 19.4. Dialer
  • 19.5. Customer Relationship Management
  • 19.6. Call Recording
  • 19.7. Quality Management
  • 19.8. Performance Management
  • 19.9. Speech Analytics
  • 19.10. Surveying
  • 19.11. Workforce Management
  • 19.12. Desktop Analytics
  • 19.13. Text Analytics

20. Professional Services and Training

  • 20.1. Training

21. Vendor Implementation Analysis

  • 21.1. Vendor Implementation Best Practices
  • 21.2. Service Level Agreements

22. Company Reports

  • 22.1. 8x8 (formerly, Contactual)
  • 22.2. Convergys Corporation
  • 22.3. Echopass
  • 22.4. Five9
  • 22.5. inContact
  • 22.6. Interactive Intelligence
  • 22.7. LiveOps
  • 22.8. NewVoiceMedia
  • 22.9. Noble Systems
  • 22.10. Transera
  • 22.11. USAN
  • 22.12. VoltDelta
  • 22.13. West Interactive Corporation

Appendix A: Hosted Contact Center Vendor Directory

Table of Figures

  • Figure 1: Contact Center Infrastructure Technologies and Applications
  • Figure 2: Typical Hosted Contact Center Infrastructure Solution
  • Figure 3: DA Redefined
  • Figure 4: 2012 Hosted Contact Center Infrastructure Trends
  • Figure 5: 2012 Hosted Contact Center Infrastructure Challenges
  • Figure 6: Product Innovation
  • Figure 7: New Product Features
  • Figure 8: Fulfillment Status of 2010 Enhancements
  • Figure 9: Upcoming Product Innovation and Enhancements
  • Figure 10.1: Company Information
  • Figure 10.2: Company Information
  • Figure 11: Vendor Strategy
  • Figure 12: Products and Modules
  • Figure 13.1: Packaged Applications
  • Figure 13.2: Packaged Applications
  • Figure 14.1: Small/Mid-Sized (SMB) Offering
  • Figure 14.2: Small/Mid-Sized (SMB) Offering
  • Figure 15.1: Vendor Differentiators and "Sweet Spots"
  • Figure 15.2: Vendor Differentiators and "Sweet Spots"
  • Figure 16: Hosted Contact Center Functional Components
  • Figure 17.1: High-Level Functional Summary
  • Figure 17.2: High-Level Functional Summary
  • Figure 18.1: High-Level Technical Summary
  • Figure 18.2: High-Level Technical Summary
  • Figure 19: Standard Service Delivery Model Definitions
  • Figure 20.1: Service Delivery Models
  • Figure 20.2: Service Delivery Models
  • Figure 21: The Hosted Contact Center Infrastructure Value Proposition
  • Figure 22: Hosted Contact Center Infrastructure Payback Analysis
  • Figure 23: Reasons to Host a Contact Center Solution
  • Figure 24: Reasons Not to Host Contact Center Infrastructure
  • Figure 25: Hosted Contact Center Market Activity, as of August 2011
  • Figure 26: 2010 Hosted Contact Center Market Share Analysis, by Number of Seats
  • Figure 27: 2010 Hosted Contact Center Market Share Analysis, by Number of Implementations
  • Figure 28: Hosted Contact Center Infrastructure Trend Analysis by Number of Seats, Three-Year Trend Comparison, 2008 - 2010
  • Figure 29: Hosted Contact Center Market Share Analysis by Number of Seats, Three-Year Trend Comparison, 2008 - 2010
  • Figure 30: Hosted Contact Center Infrastructure Market Share Analysis by Number of Implementations, Three-Year Trend Comparison, 2008 - 2010
  • Figure 31: Hosted Contact Center Market Share Analysis by Number of Implementations, Three-Year Trend Comparison, 2008 - 2010
  • Figure 32: Hosted CC Infrastructure Seats 2008 Actual - Projected 2014
  • Figure 33: Cloud-Based Contact Center Infrastructure Adoption Analysis, 2008 - 2010
  • Figure 34.1: Pricing Structure
  • Figure 34.2: Pricing Structure
  • Figure 35: 2011 - 2012 Hosted Contact Center Price Ranges
  • Figure 36: 2011 - 2012 Hosted Contact Center Price Ranges by Cost Category
  • Figure 37: Price Ranges for a 50-Seat System, 2010 vs. 2011 Comparison
  • Figure 38: Price Ranges for a 250-Seat System, 2010 vs. 2011 Comparison
  • Figure 39.1: Pricing (50-seat system)
  • Figure 39.2: Pricing (50-seat system)
  • Figure 40.1: Pricing (250-seat system)
  • Figure 40.2: Pricing (250-seat system)
  • Figure 41: Customer Survey Rating Categories
  • Figure 42: Average Satisfaction Ratings, by Category
  • Figure 43: Product Satisfaction Ratings by Category
  • Figure 44: Product Ease of Configuration/Use/Maintenance Satisfaction Ratings, by Customer
  • Figure 45: Product Ease of Integration with Third-party Applications Satisfaction Ratings, by Customer
  • Figure 46: Routing and Queuing Satisfaction Ratings, by Customer
  • Figure 47: Agent Interface Satisfaction Ratings, by Customer
  • Figure 48: Supervisor Interface Satisfaction Ratings, by Customer
  • Figure 49: Overall Product Features and Functionality Satisfaction Ratings, by Customer
  • Figure 50: ACD Feature Set Satisfaction Ratings, by Customer
  • Figure 51: IVR Feature Set Satisfaction Ratings, by Customer
  • Figure 52: Platform Reliability Satisfaction Ratings, by Customer
  • Figure 53: System Flexibility Satisfaction Ratings, by Customer
  • Figure 54: System Security Satisfaction Ratings, by Customer
  • Figure 55: Dashboard Satisfaction Ratings, by Customer
  • Figure 56: Real-Time Reporting Satisfaction Ratings, by Customer
  • Figure 57: Historical Reporting Satisfaction Ratings, by Customer
  • Figure 58: Implementation Satisfaction Ratings, by Customer
  • Figure 59: Training Satisfaction Ratings, by Customer
  • Figure 60: Service and Support Satisfaction Ratings, by Customer
  • Figure 61: System Performance (Uptime) Satisfaction Ratings, by Customer
  • Figure 62: System Upgrades Satisfaction Ratings, by Customer
  • Figure 63: Professional Services Satisfaction Ratings, by Customer
  • Figure 64: Innovation and Responsiveness to Product Enhancement Requests Satisfaction Ratings, by Customer
  • Figure 65: Product Pricing Satisfaction Ratings, by Customer
  • Figure 66: Overall Satisfaction Ratings, by Customer
  • Figure 67: What contact center applications are you using your hosted contact center infrastructure vendor for?
  • Figure 68: What contact center activities are you using your hosted contact center infrastructure vendor for?
  • Figure 69: What channels do you use your hosted contact center infrastructure to support?
  • Figure 70: What were the primary drivers in the decision to implement a hosted contact center infrastructure solution?
  • Figure 71: What are the top three to five concerns you had to overcome in the decision to use a hosted contact center infrastructure solution?
  • Figure 72: What are the top three to five benefits you have gained from using a hosted contact center infrastructure solution?
  • Figure 73: Verbatims: What does your vendor excel at?
  • Figure 74: Verbatims: What can your vendor do better?
  • Figure 75: Verbatims: What type of product enhancements would you like to see?
  • Figure 76: Please feel free to provide any additional comments about your experience with the vendor and/or product.
  • Figure 77.1: Detailed Technical Analysis
  • Figure 77.2: Detailed Technical Analysis
  • Figure 78: Unified Communications Framework
  • Figure 79.1: Unified Communications
  • Figure 79.2: Unified Communications
  • Figure 80.1: Multi-Tenancy
  • Figure 80.2: Multi-Tenancy
  • Figure 81.1: IP/SIP
  • Figure 81.2: IP/SIP
  • Figure 82.1: Security
  • Figure 82.2: Security
  • Figure 83.1: Data Center, Back-up and Contingency
  • Figure 83.2: Data Center, Back-up and Contingency
  • Figure 84.1: Integration Capabilities
  • Figure 84.2: Integration Capabilities
  • Figure 85.1: Automatic Call Distribution (ACD)
  • Figure 85.2: Automatic Call Distribution (ACD)
  • Figure 86.1: Interactive Voice Response (IVR)/Voice Portal
  • Figure 86.2: Interactive Voice Response (IVR)/Voice Portal
  • Figure 87.1: Computer Telephony Integration (CTI)
  • Figure 87.2: Computer Telephony Integration (CTI)
  • Figure 88: Proactive Customer Care
  • Figure 89.1: Dialers
  • Figure 89.2: Dialers
  • Figure 90.1: Customer Relationship Management (CRM) Software
  • Figure 90.2: Customer Relationship Management (CRM) Software
  • Figure 91.1: Call Recording
  • Figure 91.2: Call Recording
  • Figure 92.1: Quality Management (QM)
  • Figure 92.2: Quality Management (QM)
  • Figure 93.1: Performance Management
  • Figure 93.2: Performance Management
  • Figure 94: The Speech Analytics Process
  • Figure 95.1: Speech Analytics
  • Figure 95.2: Speech Analytics
  • Figure 96.1: Surveying
  • Figure 96.2: Surveying
  • Figure 97.1: Workforce Management
  • Figure 97.2: Workforce Management
  • Figure 98.1: Desktop Analytics
  • Figure 98.2: Desktop Analytics
  • Figure 99: The Text Analytics Process
  • Figure 100.1: Text Analytics
  • Figure 100.2: Text Analytics
  • Figure 101.1: Professional Services
  • Figure 101.2: Professional Services
  • Figure 102.1: Training
  • Figure 102.2: Training
  • Figure 103.1: Implementation Analysis
  • Figure 103.2: Implementation Analysis
  • Figure 104.1: Vendor Implementation Best Practices
  • Figure 104.2: Vendor Implementation Best Practices
  • Figure 105.1: Service Level Agreements (SLAs)
  • Figure 105.2: Service Level Agreements (SLAs)
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