DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
METHODOLOGY 1
EXECUTIVE SUMMARY 3
Introduction 3
Alternative Hosted US Contact Center Providers (Strategy Focus) 3
How to price contact center solutions (Strategy Focus) 3
Solutions Providers - a proactive channel to market for contact centers (Strategy Focus) 3
Global Hosted Contact Centers Update (Market Focus) 4
ALTERNATIVE HOSTED US CONTACT CENTER PROVIDERS (STRATEGY FOCUS) 7
Summary 7
How the low end of the contact center market is shaping up 7
The real reduction in overall costs gives rise to a revenue generating center 11
New applications for new opportunities 12
Service reliability is both important and attractive 12
Vendors - heed these concerns as they inhibit on-demand uptake 13
Security concerns hinder the uptake of a hosted solution 13
The cost of hosted solutions is a deterrent to purchase 13
A major disincentive to opting for a hosted solution is an existing arrangement 14
Closing thoughts 15
Where does IP feature? 15
Geographical footprints increase presence in hosted contact center virgin territory 15
Outsourcing as a revenue stream 15
MacDonaldization of the hosted contact center business model 16
Contact center in a box should include an integrated CRM package 16
Non-hosted vendor competition 16
An alternative choice of hosted service providers distinct from traditional carriers 17
Cincom 17
Contactual 17
Echopass 18
Five9 18
Siebel 18
UCN 19
HOW TO PRICE CONTACT CENTER SOLUTIONS (STRATEGY FOCUS) 20
Summary 20
Role of the Contact Center 21
Cost center vs. Value Center 24
CapEx vs. OpEx 24
CapEx helps to plan for the long term 25
OpEx has the advantage of flexibility 25
General contact center technology pricing 26
Production costs and sales costs play an important role in vendor and reseller margins 27
Regional variations has an impact on the price 27
Discounting schemes can be complex but help push sales 28
Maintenance does help end-user efficiency and competitiveness and provides a steady revenue stream 29
Value added services 29
Managed services offers flexibility to the end-user 29
Vendors need to find the right balance when selling consulting services 30
Sources of finance for the end-user 30
Attractions of financing options for SMEs 32
As hosted services are gaining traction in the market pricing them correctly is key 32
Usage - based pricing for contact centers 32
Concurrent verses log-in pricing 33
Bundled minutes and contact center services 33
CRM and Contact Centers 33
SOLUTIONS PROVIDERS - A PROACTIVE CHANNEL TO MARKET FOR CONTACT CENTERS 34
Summary 34
The Evolving Role of Soltions Providers 34
The challenge facing specialist SIs 35
Services offered by SIs 36
Reselling and integration of software is more profitable but harder to sell 36
Maintenance of contact center technologies is unavoidable 38
The flurry of M&A activity can confuse customers when it comes to maintenance contracts 38
A managed service provides end-user flexibility and lots of opportunities for the vendor 39
Professional services and business consulting are sweet spots for solutions providers 40
Vendor - Solutions Provider relationship 41
Vendors as implementers can be constructive to the end-user but destructive to a solutions provider relationship 41
Vendors, SIs and the importance of Workforce Optimization is increasing in prominence 42
Consulting is a hot trend that is gaining traction amongst Vendors 42
Hot Solutions areas for solutions providers to be aware of 42
Migration, convergence and virtualization are areas that are gaining in prominence 42
Workforce optimization is not just marketing hype anymore 43
Self service / multi-channel are areas that improve a contact centers reach with its customers 44
GLOBAL HOSTED CONTACT CENTERS UPDATE (MARKET FOCUS) 45
SUMMARY 45
To host or not to host - the first question that is asked 45
Clarifying the hosted contact center 45
Early adopters of the hosted contact center are primarily driven by cost control 47
There are still barriers to the initial uptake of hosted contact centers 48
Security and reliability 48
Control 48
Risk 48
A major disincentive to opting for a hosted solution is an existing arrangement 48
The second wave of hosted contact center uptake will be focused on business transformation 49
The real drivers in implementing a hosted contact center in a bid to transform the organization from a cost to a profit center 51
Reason number 1, Distributed contact centers become a reality with hosted technologies 51
Reason number 2, Accessibility to WOTs in a hosted environment can make better use of operational and customer data 51
Reason number 3, SIP - is it really a successor to CTI? 52
Reason number 4, Mobile workforces are altering the dynamic of the contact center 52
The hosted contact center market will continue to grow strongly in particular markets 53
APPENDIX 56
Further reading 56
Ask the analyst 56
List of Tables
Table 1: US APs by technology location (000s) 8
Table 2: Typical contact center costs in developed markets 24
Table 3: Global hosted APs, 2004 - 2010 54
Table 4: Global Hosted contact center spend 2004 - 2010 55
List of Figures
Figure 1: Evolution and size-bands of US Hosted Contact Center services 10
Figure 2: What are the three main drivers to purchasing a hosted solution? 11
Figure 3: What are the three main barriers to purchasing a hosted solution? 13
Figure 4: How would you rather pay for a hosted contact center service? 14
Figure 5: Enterprises consider a number of criteria as important when selecting a vendor 21
Figure 6: Enterprises expect their IT budgets to increase further in 2007 22
Figure 7: Changes to software and hardware spending are at opposite ends of the IT budget spectrum 23
Figure 8: Raising efficiency dominates over increasing revenues 27
Figure 9: Services offered by Solutions Providers 36
Figure 10: Changes to software and hardware spending are at opposite ends of the IT budget spectrum (Q: "How are you spending your external IT budget in 2006? How will it change in 2007?") 37
Figure 11: The network elements to a hosted contact center 46
Figure 12: Which of the following statements best describes your contact center, and how do you think that this will change over the next 12 months and 3 years? 50
Figure 13: Total Global hosted contact center APs 53
