CRM - October 2008 - (Page 49)

SCOUTING REPORT their resources into building their suites, all of the vendors claim to be profitable. Despite the market’s maturity, each year new vendors enter the field. It’s also interesting to note that there are a number of relatively new regional players located in a variety of global markets that are coming on strong. MERGERS IMPACT MARKET LANDSCAPE As is typical of any maturing market, mergers and consolidations continued in 2007. TDI, a provider of servicing solutions for sales and revenue generation, acquired Wygant in April 2007. In May 2007, Verint acquired Witness Systems. (At the time, Verint was considered the third-largest competitor in the contact center WFO market, and Witness was the secondlargest. Based on total annual revenue, however, Verint was larger than Witness.) And in July 2007, NICE Systems purchased Actimize, a provider of software solutions for compliance, fraud prevention, and anti–money laundering. Actimize was not previously included in our coverage of the WFO market. NEWER APPLICATIONS PICK UP MOMENTUM Sales of the newer WFO modules—namely speech analytics, performance management, and surveying/ e-learning/coaching—picked up in 2007. Revenue from core contact center recording and quality management modules continued to dominate the WFO market, accounting for over 45 percent of total revenue. But the newer applications began to make a significant contribution, thanks to their attractive value proposition. (See Figure 2.) Of the newer solutions, speech analytics had the largest market impact, generating 5.6 percent of total revenue. Performance management solutions accounted for 3.8 percent of all application sales and surveying/e-learning/coaching represented 2.7 percent. Workforce management is not a new module; however, it only started to be offered as a component of WFO solutions during 2006. By 2007, workforce management accounted for 13.1 percent of application sales. It’s also interesting to note that non–contact center recording solutions—which are used in public-safety applications and in other parts of the enterprise, such as on trading floors and in branch offices—is a growing sector, accounting for 17.2 percent of market revenue. Video recording, which is used for security purposes, was responsible for 11.8 percent of the revenue. SALES OF IP-BASED RECORDING SOLUTIONS INCREASE Sales of IP-based recording solutions continued to pick up momentum last year. In fact, for the first time, their overall sales exceeded sales of solutions based on time division multiplexing (TDM), faring particularly well outside the contact center. Among contact centers, www.destinationCRM.com Application Contact Center Recording Quality Management Workforce Management Speech Analytics Performance Management Surveying, e-Learning, Coaching Non–Contact Center Logging/Recording Video Recording Other WFO and Recording Solutions Total Share of Revenue 17.3 percent 27.8 percent 13.1 percent 5.6 percent 3.8 percent 2.7 percent 17.2 percent 11.8 percent 0.8 percent 100.0 percent Source: DMG Consulting LLC, Quality Management/Liability Recording Market Share Report, June 2008 Figure 2: 2007 WFO and Recording Solutions Revenue and Market Share by Application however, sales of TDM-based recording solutions outpaced those of IP-based solutions. This is because many contact centers still have TDM-based infrastructure in place; while a growing number are migrating to IP-based solutions, most contact centers do not want to rip out and replace their core TDM-based solutions until absolutely necessary. As a result, these contact centers continue to upgrade TDM-based recording solutions, and are expected to do so for years to come. This is the primary reason why many WFO vendors, both large and small, continue to sell TDM-based recording solutions when they would really prefer to simplify their product lines and concentrate on newer, IP-based solutions. FUTURE MARKET OUTLOOK We expect 2008 to be another year of significant market expansion, despite the economic slowdown. Because many of the applications in the WFO market are considered efficiency enhancers or solutions that improve customer retention, they are capable of weathering challenging economic times. The quality management/liability recording market is expected to grow by 8 percent in 2008 and 7 percent in 2009. While these growth rates are slower than what we have seen in the recent past, they are strong, considering the challenges presented by the current size of this market and adverse economic conditions. For a detailed revenue and market-share analysis of 20 top vendors in the market, see DMG Consulting’s 2008 Quality Management/Liability Recording Market Share Report. The report analyzes revenue and market share by technology segment, geography, hardware/software/services, sales approach, etc. It provides growth comparisons between 2006 and 2007, with five- and four-year trend analyses for many market views. Donna Fluss (donna.fluss@dmgconsult.com) is founder and president of DMG Consulting LLC (www.dmgconsult.com), the leading provider of contact center and analytics research, market analysis, and consulting. 49 CUSTOMER RELATIONSHIP MANAGEMENT | OCTOBER 2008 http://www.dmgconsult.com http://www.destinationCRM.com

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

CRM - October 2008 Contents Front Office Feedback Reality�Check Customer Centricity The Tipping Point Sprinting Toward Disaster? SAP�Retains Market-Share Lead in�CRM A�Week of Strong Customer�Service CRM�on Twitter Build a Good Event and They Will Come Required Reading There's No Place Like Home The New Breed of CRM�Consultant The Price is Right...You Hope How Much Marketing is Too�Much? The�Sweet Smell of High-Quality�Service The Next Act! For An Acquisition Some Stories Never Get Old CRM�Eases the Pressure For WIKA�Instruments Secret of My Success Re:Tooling Scouting Report Pint of View

CRM - October 2008

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