Contact Center Software Market

[342 Pages Report] The contact center software market is expected to grow from USD 41.9 billion in 2023 to USD 109.7 billion by 2028 at a CAGR of 21.2% during the forecast period. Some important factors that boost the growth of the contact center software market include AI/ML integrated contact center solutions, integration with CRM and other business systems, and the role of social media in contact center operations. The increasing demand for AI and automation and dynamic customer demands for robust self-service interactions would create numerous opportunities for contact center software vendors in the market.

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Recession Impact on the Contact Center Software Market

The economic slowdown has impacted the contact center software market, resulting in reduced investments, delayed deployments, and canceled client projects. However, there has also been an increased demand for contact center software solutions and a focus on cost optimization, efficiency, and automation. There is an increased need for cloud services to accelerate digital transformation to stay competitive during the recession. In a downturn, customers become more demanding of the businesses they support; they might demand more value from a product or service to justify their pay. They are more likely to react if something doesn’t work as expected. The business could lose customers if the call center isn’t optimized to handle customers. Such instances also expose inefficiencies in a call center’s KPIs, such as customer satisfaction, first contact resolution, net promoter score, and agent utilization rates.

Qatar has become a regional cloud hub, with Google and Microsoft constructing significant regional data centers. Despite the many benefits of cloud computing, such as reduced costs, increased flexibility, and improved service quality, only 3% of Qatar’s private sector has adopted the cloud, with security being a significant barrier. However, public cloud service providers invest heavily in security, spending billions yearly to protect corporate and personal data. Overcoming this obstacle will require a cultural shift rather than just a new security infrastructure. CFOs, CTOs, and CEOs are now debating whether their cloud-deployment strategies are recession-proof or flexible enough to meet shifting marketing demands while reducing expenses without compromising revenue and growth.

The major cloud vendors globally are Google Cloud, Microsoft Azure, and Amazon Web Services. In 2020, AWS saw a 33% YoY growth and earned a record-breaking USD 10 billion in revenue. In the same year, Azure and Google Cloud expanded by 59% and 52%, respectively. IBM’s Cloud & Data Platforms division also experienced a 32% increase in revenue. Alibaba and Oracle also reported revenue growth. However, the current economic downturn caused by COVID-19 and the Russia-Ukraine war would affect all cloud service providers, including AWS, Google Cloud Platform, and Microsoft Azure, as their clients are scaling back due to reduced demand which has resulted in a slowdown in earnings in the first quarter of 2022 for cloud service providers. This trend would continue throughout the year.

Despite the challenges, the cloud industry is showing long-term growth because of its flexibility and scalability. During a recession, businesses prefer to scale back or delay unnecessary technology spending to save money. This trend affects cloud vendors because cloud spending has become a significant business expense. In 2008, during the last recession, cloud computing was a new technology, but now almost all businesses use it for some of their workloads. In Q1 2020, cloud spending increased by 37% to USD 29 billion due to the COVID-19 crisis, and this trend will continue as the world shifts to virtual work. The need for scalable, trustworthy, affordable, secure, and off-premises technology services has become urgent during COVID-19. Therefore, despite the expected decline in IT spending by 8%, cloud spending is expected to grow by 19% for the entire year, according to a survey.

Contact Center Software Market Dynamics

Driver:  Role of social media in contact center operations

Modern contact center solution providers focus on providing organizations with social media capabilities to handle queries from social media to assess brand value and brand impact and reduce costs and complexities associated with abandoned client queries and customer turnovers. Social media plays a crucial role in identifying social media influencers, word of mouth, emotion, sentiments, and brand image to improve the overall efficiency of contact center agents and offered services or products. Also, customers have a favorable take on companies that respond to customer queries and comments on social media. Social media has transformed the way customers engage with businesses. Customers often turn to social media platforms like Facebook, Twitter, Instagram, LinkedIn, and others to seek support, ask questions, or voice their concerns. Contact centers must be present and responsive on social media to meet customers where they are. Contact center software enables businesses to monitor and manage social media interactions effectively, ensuring timely responses and excellent customer support. Social media is crucial in maintaining a brand’s reputation. Customer experiences and interactions shared on social media platforms significantly impact the perception of a brand. Contact center software helps organizations monitor social media conversations about their brand, products, or services.

Restraint: Implementation and integration challenges

Implementing and integrating contact center software can cause several challenges for businesses, possibly due to technical complexities, organizational factors, or the need for seamless integration with existing systems. Contact center software implementations are pretty complex, involving various components such as Automatic Call Distribution (ACD), Interactive Voice Response (IVR), Computer Telephony Integration (CTI), workforce management, and reporting/analytics modules. Integrating these components and ensuring they work harmoniously can be challenging, especially when dealing with legacy systems or multiple vendors. The system’s complexity may require dedicated IT resources and expertise for implementation and ongoing maintenance. Integrating contact center software with existing systems, such as Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), or ticketing systems, can be a significant challenge.

Opportunity: Dynamic customer demands robust self-service interactions

The growth in contact center turnover rate and waiting time in connecting to an agent might result in a negative customer experience. Improving customer satisfaction becomes vital to organizations as customer experience is essential in maintaining customer relationships and improving products and services based on customer feedback. Incorporating robust self-service bots and cutting-edge technologies such as AI, ML, and analytics enables organizations to connect with their customers to deliver enhanced customer experiences, especially after the influx in calls during and after the COVID-19 crisis. Customers today value convenience and autonomy in their interactions with businesses and want quick and easy access to information without relying on assistance from human agents. Self-service options empower customers to find answers to questions, troubleshoot issues, and complete tasks at their own pace and convenience. By offering robust self-service capabilities through contact center software, businesses can meet customer expectations, enhance customer satisfaction, and reduce the need for agent intervention. Self-service options provided by contact center software can be available around the clock, enabling customers to seek assistance and access information at any time, irrespective of business hours. This flexibility is precious for global businesses serving customers in different time zones. By offering self-service capabilities, companies can ensure that customers can access relevant resources and support whenever needed, enhancing customer experiences and loyalty. Contact center software often includes Interactive Voice Response (IVR) systems, allowing customers to navigate.

Challenge: Need for training and skill requirements

The restraint of training and skill requirements in the contact center software market refers to the challenges associated with training employees and developing the necessary skills to utilize the software effectively. Contact center software solutions have many features and functionalities to enhance customer interactions and streamline operations. However, these features can be complex and require proper training for agents and administrators to leverage their benefits entirely. Agents must understand how to navigate the software interface, utilize call management tools, handle multiple communication channels (phone calls, emails, live chat, and social media), and access customer information and history. Administrators must be skilled in configuring and customizing the software, creating call flows, setting up routing rules, and generating reports. The complexity of these features can pose a learning curve for employees, requiring dedicated training and support. Contact center software often requires a certain level of technical knowledge to install, configure, and maintain.

Contact Center Software Market Ecosystem

This section highlights the contact center software ecosystem comprising the technology providers, cloud service providers, solution providers, system integrators, and end users. The contact center software ecosystem varies based on the various vendors in the market.

The contact center software ecosystem defines various players that support and utilize multiple applications to develop contact center solutions. OEMs provide different infrastructure devices and equipment required to deploy contact center solutions, such as hardware, software, and communication systems. IT solution manufacturers bundle OEM parts, such as processors and software, to form a single solution. The technology providers offer various applications and software required to build the solution. Cloud-based contact center solutions reduce overall costs and provide highly scalable access to solutions hosted by the cloud service provider. Cloud service providers host all the services, such as networking, software, servers, and infrastructure, in public or private cloud environments and often offer on-demand cloud computing components.

The contact center vendors provide core contact center software platforms and industry-oriented solutions. These vendors have large-scale technical teams to develop and support the contact center platform. They leverage advanced technologies like cloud computing, analytics, and AI/ML to improve efficiency. Partnerships, collaborations, and agreements are the major strategies these players adopt to work with other players operating in the market.

The figure given below highlights the ecosystem of the contact center software market. The contact center software ecosystem represents a relationship between all the elements—vendors, solutions/services, and end users/verticals.

Based on solutions, the customer engagement management segment will witness the second-highest CAGR during the forecast period.

Customer engagement management builds and maintains customer relationships through various channels, including email, social media, live chat, and phone calls. Contact centers are physical or virtual locations where businesses interact with customers through these channels. The customer engagement management solution addresses critical business issues with unprecedented efficacy by combining data from multiple digital and non-digital sources, such as websites, mobile devices, CRM systems, social media, email, and various third-party websites. The solution enables companies to identify customer preferences based on interactions, transactions, and feedback and develop business plans accordingly.

Based on vertical, the telecommunications vertical holds the second-largest market size during the forecast period.

The telecommunications sector is one of the key verticals that can significantly benefit from implementing contact center software. Telecommunications companies require robust contact center software solutions for customer service and support operations. Telecommunications companies prioritize delivering exceptional customer service experiences to differentiate themselves in a competitive market. Contact center software enables them to provide efficient and personalized support across multiple channels, including voice, email, chat, and social media. The sector’s focus on customer service excellence drives the adoption of contact center software with advanced features and capabilities. Telecommunications companies typically face high call volumes and complex interactions due to billing inquiries, service activations, technical support, and more. Contact center software that can handle large call volumes, support intelligent call routing, and streamline workflows is critical for efficiently managing telecommunications customer interactions.

The US market contributes the largest share of North America’s contact center software market during the forecast period.

The US is estimated to account for North America’s most significant share of the contact center software market in 2023, and the trend will continue until 2028. Due to several factors, including advanced IT infrastructure, the existence of numerous businesses, and the availability of technical skills, it is the most developed market for adopting contact center software solutions. The US has a significant presence of global mega-vendors, high adoption of advanced technologies, such as AI, ML, and IoT, and the highest readiness for adopting the cloud; these factors would drive the adoption of contact center software. Many mergers, acquisitions, and VC/private equity deals are happening in the country, making it the largest market for investors and vendors worldwide.

Key Market Players

The contact center software market includes analysis of a few globally established players such as  NICE (Israel), IBM (US), Genesys (US), AWS (US), Five9 (US), Twilio (US), Mitel (Canada), Cisco (US), BT (UK), Verizon (US), Avaya (US), Vonage (US), among others, are the key vendors that secured contact center software contracts in last few years. These vendors can bring global processes and execution expertise; the local players only have local expertise. Most key players have adopted partnerships and product developments to cater to the demand for contact center software solutions and services.

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Scope of the Report

This research report categorizes the contact center software market based on components (solutions, services), organization size, deployment mode, verticals, and regions.

Based on the Component:

• Solution
  • Omnichannel Routing
  • Workforce Engagement Management
  • Reporting and Analytics
  • Customer Engagement  Management
  • Others (CTI, Messaging, Compliance, and Data Integration)
• Services
  • Consulting
  • Integration and Implementation
  • Training Support and Maintenance

Based on the Deployment Model:

• On-premises
• Cloud

Based on the Organization Size:

• Small and Medium-Sized Enterprises
• Large Enterprises

Based on the Vertical:

• BFSI
• Telecommunications
• IT and ITES
• Government & Public Sector
• Retail & Consumer Goods
• Manufacturing
• Energy & Utilities
• Healthcare and Life Sciences
• Others (Media & Entertainment, Travel & Hospitality, Transportation & Logistics, and Education)

Based on Regions:

• North America
  • United States
  • Canada
• Europe
  • United Kingdom
  • Germany
  • France
  • Belgium
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • Australia and New Zealand
  • Rest of Asia Pacific
• Middle East & Africa
  • United Arab Emirates
  • Kingdom of Saudi Arabia
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America

Recent Developments:

• In June 2023, Genesys unveiled its new ai-powered employee experience solution, Genesys Cloud Ex. This solution helps businesses improve the employee experience in their contact centers by giving them the tools they need to be more productive, engaged, and satisfied.
• In June 2023, NICE announced that its CXone platform is now available as an EU sovereign cloud platform. CXone is an industry-leading cloud platform for customer experience (CX) that offers unmatched scalability, reliability, and a complete set of CX applications. With this announcement, organizations from any vertical across the EU can now choose CXone as their platform while meeting regulatory and compliance requirements.
• In June 2023, Amazon Connect Chat came with a new feature that offers more ways to customize the chat widget that comes with the service. It enables the user to add a logo and change the text in fields like “system message,” “bot,” “text input placeholder,” and “end chat.”
• In May 2023, BT and Five9 announced they are expanding their partnership to offer organizations global contact center services and solutions. As part of the expanded partnership, BT will now provide the Five9 Intelligent CX Platform as a managed service to new and existing customers. BT will install, configure, and maintain the Five9 platform, freeing customers to focus on their core business activities.
• In March 2023, Genesys and Acqueon partnered to help B2C organizations optimize proactive customer outreach. The partnership will combine Genesys’ ai-powered experience orchestration capabilities with Acqueon’s omnichannel workflows, predictive analytics, and ai to help organizations deliver personalized, compliant, and effective outbound customer interactions. Through the partnership, joint contact center customers can seamlessly leverage the Genesys Cloud CX platform’s artificial intelligence (AI)-based experience orchestration capabilities with the Acqueon omnichannel workflows, predictive analytics, AI, and built-in compliance suite.
• In March 2023, Five9 announced the general availability of Five9 Agent Assist 2.0 with AI Summary, powered by OpenAI. This new solution uses generative AI technology to summarize customer call transcripts in seconds, which can help businesses to reduce manual, after-call work and improve the efficiency of their contact centers.
• In January 2023, Mitel entered exclusive negotiations with Atos to acquire Unify. Unify provides Communication and Collaboration Services businesses (CCS) and Unified Communications and Collaboration (UCC). Mitel and Unify would serve a customer base of over 75 million users in nearly 100 countries and a channel community of more than 5,500 global partners. The proposed transaction would also notably expand Mitel’s reach and increase global revenues and profitability.
• In January 2023, Verizon Business introduced digital engagement capabilities to enhance the end-to-end digital customer journey for the Verizon Virtual Contact Center (VCC). The latest VCC digital solutions would help improve customer experiences.
• In July 2022, Amazon Connect launched Contact Lens integration with Contact Control Panel and Salesforce CTI Adapter.
• In June 2022, Avaya announced that it is reimagining digital campus learning with its Avaya OneCloud Experience Platform. The platform offers significant advantages for higher education institutions facing increased competition and slowing admission growth.
• In May 2022, Avaya and Microsoft expanded their strategic partnership by integrating Avaya’s OneCloud portfolio with Microsoft Azure to provide businesses with more options to enhance productivity, scalability, and customer engagement.

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