Contact Centers and Unified Communications: Better Together or Best-of-Breed?

Contact centers and Unified Communications (UC) have always been overlapping markets. They went through successive periods of coming closer together and then drifting away. Avaya has been a poster child of vendors trying to combine the two. It recently inked a strategic alliance with Unified Communications as a Service (UCaaS) provider RingCentral for UC. Its likely refocus on contact centers made me ponder on the interplay between the two markets.

5 Decades of a Swinging Pendulum

The contact center market started with Automatic Call Distributors (ACDs) and took off in the mid-1970s with standalone solutions from Aspect and Rockwell. A decade later, Private Branch Exchange (PBX) providers had added ACD capabilities to their communications solutions, reducing the market share of dedicated solutions to less than 10%. In the 1990s, the emergence of pure software providers led to the formation of a new category with the likes of Genesys and Interactive Intelligence dedicated to call centers. The advent of IP telephony driven by Cisco in the 2000s swung back the pendulum towards integrated solutions. Three disruptions –- cloud, collaboration, and digital –- are now pulling the two markets in different directions.

Cloud

Like for most markets, the cloud wave started with specialized solutions for Contact Center as a Service (CCaaS) with Five9 and inContact (now NICE inContact) and UCaaS with 8x8 and RingCentral. The two markets began to move closer together pretty rapidly. Indeed, getting communications and contact center software from a single vendor has always been compelling to small businesses, the early adopters of cloud solutions. Moreover, many Small and Midsize Businesses (SMBs) foster employees assisting their clients beyond the customer service department. This is made easier when customer communications are handled as an extension of the general communication solution. 

In 2011, 8x8 purchased contact center vendor Contactual. Last year, it merged the two capabilities into a unified suite offering different levels of customer interaction features. In 2015, RingCentral, followed by Vonage that had in the meantime joined the UCaaS fray, OEMed NICE inContact software to add contact center to their portfolios. In 2018, RingCentral acquired Dimelo, a digital customer service provider and later Connect First, a cloud contact center startup while Vonage snapped another, NewVoiceMedia. This week Vonage rebranded itself to better reflect its new identity of a business communications provider, offering a UCaaS, CCaaS and Communication Platform as a Service (CPaaS) suite.

However, this time, integration is happening differently. Both RingCentral and Vonage have continued to offer the software they acquired standalone. They also have kept their reseller relationship with NICE inContact, acknowledging the need for best of breed solutions for the high-end of the market. Eventually, 8x8 introduced a standalone contact center solution earlier this year.   

Collaboration

In an adjacent space, Microsoft unveiled its intentions to merge collaboration and communications in the late 1990s. It started to make inroads towards that vision the following decade with its Live Communications Server, and later, Office Communication Server and Lync Server. Its persistence to pursue this goal and the acquisition of Skype in 2011 propelled the Redmond company into a leadership position. Microsoft has remained focused on the Unified Communications and Collaboration (UC&C) market. It is leveraging partners for contact centers and showing no intention to add a solution to its portfolio. As Microsoft became a major force in the market, many Unified Communications (UC) vendors started to expand into the collaboration market. 

But pursuing simultaneously the three segments of communications, collaboration, and contact centers became challenging. In the past couple of years, we saw three large UC vendors recasting their strategy. Cisco pivoted its UC&C initiative, Spark, to focus on the calling, meeting, and contact center segments under its Webex brand. Mitel inked a partnership with Talkdesk for CCaaS to concentrate its R&D on UC. A month ago, Avaya signed a strategic alliance with RingCentral for its UCaaS solution. It has yet to share its overall strategy moving forward, but it is already hinting it will redeploy its engineering investments to go after the CCaaS market opportunity. 

Collaboration has become a very large market. As it matured, many providers ranging from new entrants such as Slack to the large technology providers Amazon, Facebook, and Google have added support for voice communications. Video conferencing, once on a trajectory to become a feature of a broader suite, has reemerged as its own category with companies such as LogMeIn (GoToMeeting) and Zoom. These players are also adding voice communications to their roster with the LogMeIn purchase of Jive Communications in 2018 and the Zoom introduction of its Phone product earlier this year. There is now an entire movement to provide voice communications as a feature of collaboration applications.

Digital

The digital transformation of businesses is also pulling the contact center market in other directions. Several customer interaction channels specialists like eGain (email) or Liveperson (chat), or Helpshift (mobile) have expanded their software into comprehensive suites to manage customer communications across all digital channels, advocating for the combination of self and assisted service on a single platform. Several CRM providers such as Salesforce or Zendesk have added support for digital channels to their applications touting that the combination will enable greater levels of personalization. These Digital Customer Service suites are set off to support voice. 

The embedding of voice communications into other applications is enabled by CPaaS software. CPaaS vendors also recommend a do-it-yourself approach to embed communications into business processes and customer experiences. My head is spinning with all the possible combinations that have emerged!

Does it matter anyway?

The question of whether contact centers should be bought as an extension of your communications solution or as a best-of-breed application is rooted in the historical complexity of integrating communications and applications, the complexity of contact center solutions, and the prominence of voice as a channel of interaction. 

The cloud has changed the integration paradigm making it much simpler. The Software as a Service (SaaS) model has democratized access to software solutions that were previously not available to many companies unless a feature of another application in place. Eventually, customer communications are making equal use of voice and digital channels.

Communications have become so pervasive that there is no perfect combination. More than ever, open APIs and marketplaces should become key criteria guiding your technology choices.