December 17, 2015
A recent report from research firm Frost & Sullivan (F&S) has shown that total revenue from hosted/cloud contact center solutions in North America has already surpassed revenue from on-premises products in terms of annual spending for this year. That’s good news for those in the cloud contact center industry, but there is still work to be done.
“In terms of penetration of the installed base, on-premises contact center systems still have an edge over hosted solutions, which translates to a huge opportunity for the latter’s market growth,” F&S noted in a statement.
The demand for best-of-breed cloud applications will be particularly strong in the mid- to large-sized enterprise market, where companies will seek to acquire new and add-on capabilities as cloud services, while keeping some of their core systems on-premises, F&S said.
According to researchers, the North America Hosted/Cloud Contact Center Report finds that the market generated revenues of $2.17 billion in 2014 and is projected to reach $3.66 billion by 2019. The hosted/cloud model, comprising best-of-breed and full-suite interactive voice response (IVR), automatic call distributor (ACD), chat, outbound, and agent performance optimization (APO) applications, has emerged as the preferred deployment model for contact center applications. While hosted IVR will continue to hold the largest revenue share in this market throughout the forecast period, hosted ACD, hosted chat, and hosted APO will experience much higher growth rates.
“Small- and mid-sized contact center organizations are showing a marked preference for full-suite cloud contact center solutions to reduce costs and integration complexity as they move more applications to the cloud,” observed Frost & Sullivan (News – Alert) Nancy Jamison, Principal Analyst at Contact Centers. “However, with more than 60 providers offering a range of best-of-breed, suite, and point solutions, customers often feel overwhelmed by the sheer number of choices.”
The report concluded that, due to the intensifying competition among pure-play cloud providers for market share and the challenge posed by on-premises vendors, telecommunications companies and outsourcing firms have stepped up their marketing and sales efforts to remain competitive in this market.