EMEA: The Next Hosted IP Hot Spot?
The hosted IP contact center market in Europe, the Middle East, and Africa (EMEA) is gaining momentum with enterprises, both large and small, according to Frost & Sullivan research. Next-gen telecommunication carriers already are launching these services in Europe, which is expected to exhibit strong growth by 2007.
EMEA generated growth revenues of $139.6 million in 2004, and is expected to grow at a compound annual growth rate of 26 percent, to approximately $444.9 million in 2009, according to the research. "Although the market is still in a formative stage and the technology is novel, the potential is huge. As much as 7.9 percent of the installed base is likely to use hosted IP contact center services in the EMEA by 2009," says Shormik Banerjee, a Frost 7 Sullivan analyst. "Ultimately hosted IP contact-center services are expected to emerge as a complementary service to premise-based contact centers."
Many telecom companies with strong brand images and distribution channels already have installed contact centers in EMEA, and Frost & Sullivan expects this to initiate a trend among other carriers. Although telecomm providers are the sellers, the buyers are financial services, manufacturers, and the public sector, which are outsourcing their contact-center service needs abroad.
"The telecommunication companies have been more aggressive in pushing this market, from a supply aspect," said Robin Goad, senior analyst at Datamonitor. "Also, the market is more mature. You're getting the leap-frogging effect. The same things that are holding back the contact center market in North America, such as being able to migrate to a hosted model, is much easier and more affordable in EMEA."
According to Goad, hosted IP contact centers are particularly attractive because outsourcing contact center infrastructure helps shift the burden of technology risk onto the service providers. By outsourcing their IP needs to telecom providers in EMEA, enterprises can gain access to technology they previously couldn't afford. They also can gain improved security and reliability without the added costs of hosting their IP needs in-house. Because of this, enterprises can reduce their maintenance and support staff, and gain access to newer services at lower costs. Additionally, large enterprises appear to prefer outsourcing their telecom and data communication requirements to a single service provider instead of multiple ones.
Frost & Sullivan found that SMEs are expressing strong interest in adopting hosted contact-center service offerings. Besides the advantages of reduced costs and newer, more secure technology access, SMEs are showing a preference for multitenant services, because of the cost advantage in terms of a partition able service.
France, Germany, and the United Kingdom are among the earliest adopters of hosted contact center services in Europe. The U.K. boasts a large, informal contact center base and many participants have launched virtual contact center services there. Several distributed contact centers are evaluating hosted solutions in these countries, while all three are beginning to experience a strong demand. According to Goad, Scandinavia will become the next location for the contact center market, including Hungary, Poland, and eventually Russia, and northern and southern Africa, over the next few years.
"We see this market increasing at a steady, rather than an explosive rate," Goad says. "As enterprises switch to this model base, we expect smaller enterprises to move down the hosted path, while larger enterprises will purchase complementary technology on a hosted basis only when they have to."
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