The future of contact centers took a more concrete shape recently as Avaya filed for bankruptcy. Avaya is a large telecommunications company that is also considered a big player in the contact center industry. So the bankruptcy reveals a few key insights about the marketplace.
Our friends at inContact recently wrote a blog about what the Avaya bankruptcy means for the future of contact centers and the industry. In fact, their thoughts were so good that we wanted to share them!
So here is what they had to say:
Avaya Bankruptcy Indicates “Cloudy” Future for Contact Center Industry
In the wake of the Avaya bankruptcy announcement, I find myself taking stock of where contact center technology is heading, and the landscape seems clear to me. As a practitioner of cloud-based technology, I have an inside view of the trends and abilities within this space, and I view the Avaya bankruptcy as a clear sign of things to come.
Cloud-based contact center solutions are significantly disrupting the market. Cloud technology has several differences from dated on-premises deployment models including:
- No hardware requirements
- No cost or responsibility for testing
- Automatically-implemented upgrades at no additional cost
These differences provide:
- Faster innovation,
- “On demand” scalability
- Flexible configuration (often performed by business users), and
- Access from anywhere with an internet connection
The bottom line is a significantly lower upfront cost to implement cloud-based solutions. Long term the cloud positions organizations on the leading edge of innovation and ensures they are able to maximize efficiency and maintain – or improve – their overall quality of service.
The entire contact center industry, as well as others, is undergoing of a massive shift away from on-premises solutions due to high up-front costs, painfully long installation processes, lack of flexibility, and expensive upgrades.
The Avaya bankruptcy signals a continued transition toward the future of innovation and flexibility in cloud-based contact center software. The cloud side of this industry has seen a tremendous amount of acquisitions and new partnerships over the last three years. Despite the increased interest in contact center technology companies, there has clearly been a lack of interest in Avaya considering they have not found a buyer nearly a year after they began exploring a sale, even with an established contact center offering and a strong catalog of existing contracts. The acquisition market is not averse to taking on debt, as we have seen in the acquisition of Interactive Intelligence by Genesys, so why the lack of interest in this seemingly strong brand? Avaya lacks both a cloud offering and a clear roadmap to possessing one. Therefore, they are poorly positioned to meet the needs of the future. Applying this scenario to a consumer purchase, you wouldn’t buy a laptop with fewer features that costs more than the newer model, would you?
The contact center industry’s “cloudy future” is apparent in the recent switch by Carlson Rezidor Hotel Group (CRHG) from Avaya to inContact. In her article on No Jitter, Beth Schultz spoke in depth with John Zurn, senior director of reservations and customer care at CRHG. According to Zurn, when the company began the search process to replace their Avaya system they knew, despite initiating a broad and comprehensive exploration of available solutions and platforms, “it was really cloud or nothing”.
Cloud-based contact center software is innovating far ahead of their on-premises “competitors”, creating a significant barrier to entry for those that have yet to start developing their own cloud offering. The new battleground in the space is speed to innovation for improving the employee and customer experience. The leader in the industry, NICE, has been an acquiring machine for the last few years and are buying leaders in both cloud contact center and analytics software. With their acquisition of inContact, NICE is pulling away from its competitors in all areas of contact center technology and the gap is likely to widen in the coming years. With a portfolio addressing the needs from small to medium and enterprise accounts, inContact and NICE are gaining a larger share of the market while increasing the velocity of innovation.