• January 10, 2020
  • By Donna Fluss, president, DMG Consulting

The WFO Market Continues to Beat All Odds

Article Featured Image

The contact center workforce optimization (WFO) suite market has beaten the odds and outperformed the enterprise software market and economy many times during the past 35 years. This market’s success can be credited to its flexibility, adaptability, and innovation, which might sound strange given its historical reliance on two primary applications, recording and quality management (QM). Over the years, when the leading vendors who drive the market, NICE and Verint, found themselves striving to achieve revenue goals, they were willing to look outside their traditional sectors and make acquisitions that expanded their opportunities, positioning themselves to grow inorganically. The leaders have also used their large research and development (R&D) resources to rethink, re-imagine, and re-create the market and their offerings, providing new and enhanced functionality to enable their enterprise clients to deliver outstanding customer and employee experiences while improving productivity and quality.

While few vendors want to shape their message around productivity improvements, this remains the primary contribution of WFO suites and is the reason why robotic process automation (RPA) has taken off in a manner rarely seen and continues to experience rapid growth. There are many ways to justify or sell productivity improvements in contact centers and back-office departments, and the WFO vendors have done an excellent job of this for decades, a trend that DMG Consulting expects to continue, even as the vendors re-invent themselves to address market demands.


The first half of 2019 continued to build on the strong revenue performance experienced in 2018. Full fiscal-year 2018 total company GAAP revenue for the WFO market was $3.6 billion, up $273.2 million from $3.3 billion in 2017, a year-over-year increase of 8.2 percent. While impressive for such a mature market, the first half of 2019 was slightly stronger. Total company revenue for the WFO market in the first half of 2019 was $1.8 billion, up from $1.7 billion in the first half of 2018. This represents an increase of $143.9 million, a very strong 8.5 percent year-over-year improvement. Perhaps even more meaningful, the contact center WFO market grew by 11.6 percent to $963.7 million in the first half of 2019, up from $863.6 million in the same period of 2018, an increase of slightly more than $100 million.

The two market leaders, NICE and Verint, both performed very well in the first half of fiscal year 2019. As the two market leaders account for about 70 percent or more of almost every WFO segment, they drive market performance. Compared to the first half of 2018, NICE experienced total revenue growth of 11.8 percent, with a year-over-year increase of 8.9 percent in its contact center WFO revenue. Verint grew total revenue by 7.4 percent and contact center WFO revenue by 11.8 percent during the same period.

Aspect, acquired by private equity firm Vector Capital in February 2019, was in third place with estimated fiscal mid-year 2019 total revenue of $161.5 million. Calabrio came in fourth place with estimated mid-year total revenue of $99 million, all of which is attributed to its WFO suite. Calabrio’s mid-year revenue figure is estimated to have increased by 38.9 percent from $71.3 million in the same period of 2018.


WFO suite vendors are investing generously in their solutions, and prospects and customers are responding by opening their wallets. Enhanced applications include faster transcription and alerting for real-time speech analytics; deeper, automated insights from interaction and customer journey analytics; a plethora of new forecasting algorithms in workforce management modules; and modern redesigns of agent, supervisor, and administrator user interfaces—among many other improvements. This is just the beginning of the innovation that leading vendors are bringing to market.


And speaking of innovation, the investments are not just about making current applications better, faster, or flashier; emerging innovations are often designed to deliver entirely new capabilities. Support for new channels; the addition of RPA, attended and unattended; context-based agent guidance facilitated by integrated knowledge management applications; and predictive models and analytics are a few examples of the ongoing innovation from WFO vendors.

The need to make departments smarter and more automated is the underlying impetus behind much of the innovation. WFO vendors are striving to incorporate artificial intelligence (AI) and RPA to enhance the performance of their applications and give their enterprise clients a competitive advantage. Like most IT sectors, WFO is benefiting from enhanced databases, faster processors, better and more efficient coding techniques, and more. Functionality that was not possible as recently as five years ago without major investments in processing power is now commonplace. Innovative WFO vendors are taking advantage of these technology improvements and are incorporating them into existing and future applications to position their enterprise clients to change and improve the servicing landscape.

Innovation is what continues to separate leaders from followers in the WFO suite market. (Revenue is not the only characteristic that makes a vendor a leader.) It takes vision, along with a great deal of effort and R&D dollars, to embed AI throughout an existing suite. In some cases, it’s easier to rewrite applications than to incorporate AI into what are often highly outdated and inflexible architectures, as many of the WFO suites and applications are more than 20 years old.


The potential contributions of AI should not be underestimated. Currently, a great deal of what is said about AI is futuristic (another way of saying “not yet real”), although much of it is not simply empty promises. The future of contact centers will be predictive analytics driven by AI-enabled systems; within the next 10 years, AI will become the “brain” of the contact center, powering its many actions, which will be highly coordinated in the more sophisticated servicing environments.

AI and automation will dramatically alter the function of contact center agents, who will become value-added service providers—in many cases, of the last resort. AI-based intelligent virtual agents (IVAs) will alter the service experience, allowing customers to help themselves in a variety of voice and digital channels when desired, keeping live agents available when requested or needed by the individual. Phone calls are not going away anytime soon, although the volume of digital interactions is expected to become the predominant communication channel between customers and enterprises within five years.


Revenue growth in the WFO suite market during the past 18 months has been significant and is expected to continue, as this contact center market has shown its resilience and strength in both good and bad economic times. Enterprises that are undertaking their digital transformations (which amounts to the majority of companies) need innovative partners and systems to help navigate uncharted waters. WFO suite vendors have proved invaluable for contact centers over the years, and their reach is expanding into back-office operating departments and other enterprise functions, a trend that is expected to pick up momentum.

The market needs what WFO vendors offer, even though DMG expects to see substantial changes in how these capabilities and applications are sold during the next five to 10 years. The success of leading WFO vendors in capturing the investment dollars of their customers in contact centers, and increasingly other enterprise departments, is going to threaten competing software and drive a wave of market consolidation. 

Donna Fluss is president of DMG Consulting. For more than two decades she has helped emerging and established companies develop and deliver outstanding customer experiences. A recognized visionary author and speaker, Fluss drives strategic transformation and innovation throughout the service industry. She provides strategic and practical counsel for enterprises, solution providers, and the investment community.

CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues
Buyer's Guide Companies Mentioned