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RightNow and eGain Hold the Lead in Gartner Magic Quadrant for E-Service Suites
Gartner Magic Quadrant for E-Service Suites '09: The increasingly saturated market seeks to solve a common problem: disintegrated customer experience.
Posted Nov 3, 2009
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There are multiple channels customers can take advantage of when trying to contact a company about a particular product or service inquiry -- so many that most organizations do not yet have any insight as to which channels consumers have tried to use at any point.

This incomplete view of the customer can damage satisfaction, experience, and loyalty. Looking to keep profitable consumers on its balance sheet, companies are increasingly investing in e-service suites according to Gartner's latest Magic Quadrant report on the topic. "In 2008 the market was about $800 million, and we expect it to increase to about $1 billion this year, which is far outpacing other enterprise-facing areas," says Michael Maoz, co-author of the report, research vice president, and distinguished analyst at Gartner. "The e-service market is growing very rapidly."

Maoz explains that businesses are looking to solve what has largely been a disintegrated experience. "This is a response to customers being frustrated at being treated without any corporate memory," he says, giving an example of a customer searching a company Web site for a knowledge-base article and can't find it, so they set up a Web chat and the virtual assistant knows nothing about the searching the consumer has done to that point.

For definition purposes, Gartner identifies the following technologies as part of an e-service suite:

  • knowledge base for self-service;
  • email response management;
  • Web chat;
  • collaborative browsing;
  • virtual assistants;
  • short message service and multimodal communication; and
  • interaction recording.

By trying to bring these pieces together, Maoz says companies are searching for a framework called a customer interaction hub. He believes it to be a framework rather than a product because from a communications infrastructure perspective, there is an ability already to manage the variety of interaction channels. "This provides the perception that the company knows who you are, where you are, and what you want," he says.

Consequently, there are more contact center infrastructure players entering the e-service space. Maoz believes that these vendors will view the market as a natural extension of what they already offer. "You're seeing Genesys [Telecommunications Laboratories], Cisco Systems, Avaya, and Aspect Software all interested in the marketplace," he says. "It might lead to partnerships or contention down the road."

There have been several strategic partnerships in the past year regarding e-service -- Maoz notes Genesys and InQuira; IntelliResponse and LivePerson; and eGain Communications and Cisco Systems -- but no mergers or acquisitions. The report predicts that, by 2012, less than 60 percent of current e-service products will exist in the format they do today. "We could be ripe for acquisitions, but it might just be the realities of capital and equity markets still being down," Maoz says. "I believe that in a different equity era…you could have seen half of these vendors absorbed by larger companies with broader capabilities."

In the current market, though, RightNow Technologies is still the leader in e-service, according to the report. The only other vendor in the Leaders Quadrant is eGain, which Maoz says is facing tremendous competition from the two inhabitants of the Challengers Quadrant: Kana Software and SAP. "EGain is one to watch to see if it can maintain its position in the market today," Maoz says.

Vendors finding themselves in the Visionaries Quadrant are:

  • ATG;
  • Genesys, which Maoz notes could be a "big mover" in e-service in the next year;
  • Interactive Intelligence; and
  • nGenera, which is being watched closely to determine if it can take its vision of a collaborative enterprise and make it a reality, Maoz says.

The crowded Niche Players Quadrant contains:

  • Artificial Solutions;
  • Avaya;
  • IntelliResponse;
  • Oracle-Siebel; and
  • Presence Technology.

Looking ahead, Maoz says the e-service market must utilize more proactive intelligence. "When you are interacting with a business, it should know who you are, what your value is, and your likely reason for being on the site so it can respond more to your intentions as opposed to discovering America all the time," he says. "The next generation of e-service must apply more analytical tools to understand customer intent."

[Editors' Note: Due to an editing error, earlier versions of this article referred to the projected size of the e-service market in millions rather than billions. The editors regret the error.]

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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