Data Dump: Update on Call Center Cloud Migration

Data Dump Update on Call Center Cloud MigrationsThe cloud has radically transformed the call center industry. The shift, now firmly in its second decade, is accepted as conventional wisdom. You rarely find people arguing the merits of premise-based call centers. But there’s no denying the fact that many premise-based systems are still sold and deployed, especially for larger call centers. It seems companies are fearful of touting any non-cloud successes because the knee-jerk reaction is to label that as anti-progress.

What is the reality on the ground? Are we accelerating towards an all-cloud world? Or reaching a steady-state balance between cloud and premise? Unfortunately, it’s hard to get clear data. Let’s take a look at what data we do have.

CX Trends 2019

Cloud Use, by Vertical

This chart come from Contact Babel’s US Contact Center Decision-Maker’s Guide, available here. This was one of the reports included in our last report round-up post.

 

Use of cloud by vertical

Outlook for Specific Cloud-Based Features

This chart comes from the same report.

Planned cloud functionality

 

Compare that with a similar chart from the IDC report, “Cloud-Based Application Transform Customer Service” (also in our last round-up post).

 

IDC - Cloud applications

Global Outlook

Research and Markets released a report in March of last year. Their estimate is that the global cloud-based contact center market is expected to grow from $6.80 billion in 2017 to $20.93 billion by 2022 (CAGR of 25.2%).

IDC however puts the 2022 number at about half that number:

 

IDC - ww cloud growth

 

Going back to that MZA report, they expect a CAGR of 18%, lower than Research and Markets, but higher than IDC.

 

MZA cloud seat growth

 

(Thanks, Stephanie Watson, for sharing.)

As you can see, one of the problems with reconciling all the predictions is that some talk about revenue growth, and some talk about seat growth.

Install Base

Research firm MZA released a report in September putting the current world-wide cloud install-base at 12%. That’s on a per-agent basis.

 

MZA - ww cloud install-base

 

That lines up with a statement from Avaya CEO Jim Chirico: “… the contact center industry is on the front end of the transformation to the cloud — maybe 10% of the way there.”

Reasons Companies Choose On-Premise

There are many reasons large enterprises are still choosing a premise system. Those reasons may fade with time, but they are not irrational. (See “Weighing the Cloud” section in this post.) It’s misleading and simplistic to think that the only reason not to adopt a pure cloud strategy for your call center is “fear of the future.”

From IDC:

 

IDC - cloud challenges

 

From the Contact Babel report:

 

CBabel - cloud concerns

 

You can see a lot of recurring themes between those two results.

Cloud Shaming

Why is there a tendency to down-play non-cloud news?

Compared to the rest of enterprise software, the call center industry was a laggard in adopting cloud, so maybe there’s a sense that it has to play catch-up. The industry’s giants, Avaya, Cisco, and Genesys, were indeed put on their heels by the cloud transition. So, anything non-cloud became synonymous with being slow-moving and out-of-touch. For the last five years, they have been emphasizing everything cloud-related as a way to show that they are no longer behind.

Another reason is that the fast-growing cloud call-center upstarts have the loudest voices. They have that start-up passion and a lot venture funding to help amplify their message. Consider this quote from Talkdesk’s CEO: “The shift is inevitable … cloud-based contact centers [will] become the rule more than the exception … it’s only a matter of time before the ease of management and low set-up cost persuade the last old-fashioned holdouts to switch.” As explained in the section above, portraying anyone choosing an on-premise system as a “holdout” is simplistic.

Whatever the reason, we shouldn’t ignore the fact that premise-based contact centers remain an important part of this industry. That’s not just because there’s a huge install base, but because vendors are still selling hundreds of millions of dollars of premise solutions today!

 


Customer Experience Trends 2019 6 Must Read Customer Experience Trends in 2019

Join us as we adjust your set and help you dial in your CX strategy with our annual report on key CX trends.

 

What’s Inside: 

  • Live Better Electronically: AI and the Customer Experience
  • Breaking the Fourth Wall: “Doing” Interactions Well
  • Control the Remote, Control the World
  • Change the Channel: Prioritizing Omnichannel in Customer Experience
  • Be Kind, Please Rewind: Experience Overtakes Price and Product
  • Tuning your Antenna for Personalization

 

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