Despite stock-market slumps, rising unemployment rates, growing inflation, and a toppling housing market, the global interaction-recording market for contact centers has continued to make large gains, with a 45 percent jump from $550.5 million in 2005 to $795.5 million in 2007, according to new research from The Pelorus Group, a Raritan, N.J.–based market-research and consulting firm.
According to Dick Bucci, senior consultant at The Pelorus Group and author of the study, there are three main factors that explain the market's continued rise despite an era of tightened budgets:
- the rise of Voice over Internet Protocol (VoIP), which Bucci calls "a strong incentive to upgrade equipment that otherwise would [not have been]," including VoIP-enabled automatic call distributors (ACDs) that can record, retrieve, and search calls placed over the Internet;
- heightened awareness and concern regarding liability and compliance with standards (e.g., Payment Card Industry) and regulations (e.g., the Health Insurance Portability and Accountability Act); and
- a move toward multiple, smaller contact centers, offering reassurance that if one center site is disabled by an unexpected disaster, others are geographically dispersed to pick up the slack.
The "global" aspect within the market is accelerating, according to the report. North America accounted for just 53 percent of total sales of contact center recording systems in 2007, compared to 62 percent the last time Bucci authored this study in 2005. In the meantime, sales to Europe, the Middle East, and Africa increased by 65 percent, and nearly doubled in the Asia-Pacific and Caribbean and Latin American regions from 2005 to 2007. "The [United States] is a very mature market now, in that we understand the importance of investing in contact centers, so the saturation of the products is higher," Bucci explains, adding that the massive increases seen in other areas are due to the fact that they're comparatively smaller markets. "Nonetheless," he says, "doubling the size of the market is pretty significant [in a two-year time frame]."
The Pelorus study profiles 26 vendors in the interaction-recording space, but approximately 90 percent of the market can be attributed to just three providers, Bucci says:
- Autonomy etalk;
- Nice Systems; and
- Verint Systems.
Bucci has some advice for the other companies fighting for the remaining 10 percent of market share: Keep prices competitive, target your solutions to the midmarket, and stay within your niche sweet spots. "They also need to build alliances amongst each other, so they can go to the customer with a turnkey solution -- 'Even if the pieces come from different vendors, it's tightly integrated,' " he explains. "The cost of [doing this] can be very substantial [for companies]."
Bucci says that 2008 is unlikely to demonstrate gargantuan growth rates in the sector, but at the same time he says an actual downturn is unlikely any time soon. He says that one of the more important trends -- the perception of the contact center being a vital, strategic resource for maintaining and growing the customer base -- will help propel the market toward a billion dollars in annual sales by 2010. "The level of investment the companies are willing to make in the contact center is directly related to their view of the value of that resource," he says.
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