CRM - June 2008 - (Page 32)

believe HYPE CAN TAKE ON MANY FORMS—like, say, the word- of-mouth hype that can sweep through a fifth-grade math class. The 21st-century home for hype is clearly the Internet, where blogs spring up debating anything from the “right” Prada handbag to Al Gore’s place in the global-warming hall of fame. What about hype in the business world, particularly for customer service strategies and technologies? Lately that hype has focused on the hosted contact center. Vendors, analysts, and consultants—and their collective press releases, study results, and sales calls—all indicate that the hosted center is on the rise. For the last several years, the notion of a hosted contact center for the enterprise has been on many contact center executives’ minds. Pundits have been singing its praises since at least the early 2000s—building the hype, promising that it would certainly shift the way operations were run. In fact, one recent paper from analyst firm Frost & Sullivan bore the title, “The Hosted Model: Why It’s Revolutionizing the Contact Center Industry.” Daniel Hong, lead analyst for customer interaction technologies at research firm Datamonitor, also believes in the business model. “Hosted and managed contact center services are among the fastestgrowing segments within the contact center technology market,” he says. And the vendors certainly see it: “The hosted contact center is now becoming probably one of the hottest technological initiatives among enterprise call centers,” says Tim Houlne, chief executive officer of Working Solutions, a provider of outsourced contact center solutions. Frost & Sullivan also recently published statistics from its study of the hosted contact center market in Europe, the Middle East, and Africa (EMEA), stating that both large and small-to-midsize businesses (SMBs) are believing, and buying up, the hype. The market earned revenues of 277.9 million euros in 2007 (approximately $434.7 million according to the exchange rate at press time), and by 2013 is estimated to reach 1.45 billion euros (approximately $2.3 billion). Kunal Kakodkar, a Frost research analyst, says that SMBs in EMEA are attracted by the payment option. “Leasing contact center technology allows organizations to deflect high upfront capital expenditure,” he explains. “This is an attractive business proposition for small and midsize businesses that seek contact center technology, but do not have access to the capital expenditure required for expensive premise equipment.” Kakodkar also points out that EMEA is two to three years behind the North American hosted contact center market, and is just growing out of its infancy phase. Other analysts, though, are not convinced the golden age of the hosted contact center market is upon us—yet. Drew Kraus, research vice president for Gartner and its lead analyst on the hosted contact center, says that the market for the hosted contact center for the enterprise is still developing. “The large enterprise usage of the hosted contact center…is for the most part still in its infancy,” he says. “There are certain aspects of the hosted contact center business that are somewhat [mature]—primarily in the area of hosted [interactive voice response] solutions—but when we look at the broader set of hosted applications, particularly the contact-routing and -prioritization engine that essentially is [automatic call distribution] in the cloud—and now the multimedia-routing engine in the cloud—there is a whole lot more hype than actual market adoption around that.” So much more hype, in fact, that Kraus claims “we see numbers in the low single digits both in terms of number of call centers and number of agents.” The most recent figures from industry research firm DMG Consulting seem to back him up, estimating the current penetration rate for hosted contact center infrastructure in use worldwide at just 3.2 percent (approximately 385,352 seats). DMG, however, sees perhaps a tenfold explosion over the next few years: By the end of 2011, the firm believes, 30 percent to 35 percent of all new contact center seats will be hosted. That projected growth in new hosted seats may be why the hosted model is seeing such fast adoption in today’s less-mature markets. When asked to explain the growth within the EMEA market, Kraus says that we need to dig a little deeper than dollars and cents.“There is more market share than what we see in North America,” he admits. “In large part, these services are being sold into smaller and low-complexity contact centers…. It tends to be a better fit there. Particularly for those that do most After years of build-up, how much longer should we wait for the market to mature? // BY CHRISTOPHER MUSICO 32 CUSTOMER RELATIONSHIP MANAGEMENT | JUNE 2008 www.destinationCRM.com http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - June 2008

CRM - June 2008 Contents Front Office Reality Check Customer Centricity The Tipping Point Making Mashup Masterpieces Trouble in the Air CRM on Twitter Is SaaS Ready for Its Contact Center Close-up? CRM: In the Public Interest Required Reading Lollipop Loyalty Best Practices Series: CRM & eCommerce eGain NetSuite Infor Longwood Software Vovici The Second Coming of 2.0 Believe the Hype About Hosted Contact Centers All Talk So Hot It’s Cool Linksys Gets Shaken, a Community Is Stirred The Risky Risk Business Awana Hears a SaaS Sermon Secret of My Success Re:Tooling Scouting Report Pint of View

CRM - June 2008

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