• June 1, 2004
  • By David Myron, Editorial Director, CRM and Speech Technology magazines and SmartCustomerService.com

Hosting Hits Call Centers

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The ASP industry is at it again. Except that this time application service providers are building on their success with hosted CRM applications and jockeying for position in the budding computer telephony service provider market, otherwise known as the hosted contact center market. The success of hosted customer service providers like RightNow Technologies has piqued the interest of both on-demand CRM vendors like Salesforce.com and traditional licensed software vendors like Siebel Systems. Siebel wasted no time in becoming a first mover with its acquisition of Ineto Services, a hosted telephony company. The acquisition enables Siebel to tie hosted call center telephony services, such as integrated voice, Web, chat, and email capabilities, into its hosted CRM applications, removing the costly burden of call center computer telephony integration (CTI) implementations. "The Ineto acquisition is incredibly strategic for us in that it's game-changing," says Ken Rudin, vice president and general manager of Siebel OnDemand. "Now we can build world class call centers integrated with CRM." Although the Ineto acquisition was small in size--Ineto had only 15 employees--it was big in stature, and it didn't take long before others followed suit. Echopass, for example, announced the integration of its hosted call center solution, TeleCenter, into Salesforce.com's Enterprise Edition. Additionally, Genesys Telecommunications Labs recently partnered with hosted call center company White Pajama and Salesforce.com. The arrangement presents Genesys' call center hardware and software in a hosted delivery model (provided by White Pajama, an Ineto competitor) and links into Salesforce.com's Enterprise Edition for customer reporting purposes. For those organizations that have already bought into the hosted model, a hosted call center solution especially makes sense. A hosted call center solution enables organizations to save on costly call center hardware and software, such as automatic call distributors, CTI, and interactive voice response systems. These costs can add up, especially considering that some companies may have to shell out $1 million on the technology, implementation, configuration, and ongoing management--and that does not include the integration with CRM and analytical systems. "What we're now seeing is that there are enough hosted implementations to drive a new round of additional hosted services, such as call center telephony, CRM analytics, etcetera," says Erin Kinikin, vice president and research director at Forrester Research. "It's not so much that the market is exploding again as that companies that bought the basics are now going back for the add-on offerings." The overarching issue with hosted customer service solutions is their ability to integrate with the CRM application. This, according to analysts, is why some hosted customer service solutions will cost substantially more than others. For example, Echopass integrates with Salesforce.com's Enterprise Edition, which costs roughly $125 per user, per month. But after factoring in Echopass's TeleCenter, as well as its hosted voice and e-service solutions, the total cost can reach as much as $400 per user, per month. However, because Siebel acquired Ineto and can more tightly integrate the solutions, it can offer Siebel's Contact OnDemand and CRM OnDemand for $150 per agent, per month. "If the product is not provisioned to be hosted, it's expensive to be hosted," says Chris Selland, vice president of sell-side research at Aberdeen, referring to Genesys' solutions being retrofitted for the Echopass hosted model. Selland adds that because Siebel acquired Ineto, it can provide tighter integration between its products.
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