• November 7, 2005
  • By Coreen Bailor, (former) Associate Editor, CRM Magazine

QM and Liability Recording Move Ahead

The quality management (QM)/liability recording market is expected to exceed projections for the entire year, according to DMG Consulting's "2005 Quality Management/Liability Recording Mid-Year Market Share Update." The report is a market-share analysis for areas within the QM/liability recording area that include coaching, e-learning, logging, performance management, quality management, speech analytics, and VoIP recorders. Segments covered include growth comparisons between 2004 and the first half of 2005, and revenue for first six months of 2005 according to application, geography, sales channel, and vertical. Donna Fluss, principal of DMG Consulting and author of the report, notes that multiple factors have a hand in such growth. "We projected at the end of last year that the market would grow at $919 million, and the market is well on its way to achieving that growth rate," she says. "We had pent-up demand, because we are finally in a good year. We had to replace a lot of liability recording systems. These applications have improved vastly over the past few years, and the benefits and ROI are outstanding. There is high value and high return for...these expanding suites of products, and the market really is responding." Coaching, speech analytics, and VoIP recorders have the strongest projected growth rates for 2005, about 100 percent. But for 2006 VoIP recorders are anticipated to outpace other category segments with a projected growth rate of about 120 percent as the others remain steady. Examining vendors' first-half 2005 QM/recording revenue (GAAP) and first-half 2005 market share, NICE Systems led all vendors with $108.6 million correlating with 26. 5 percent market share, followed by Verint Systems ($93.5 million, 22.8 percent), and Witness Systems ($68.2 million, 16.6 percent). NICE's revenue includes one month of revenues from Dictaphone, as NICE acquired the CRS division's assets in May 2005, while Dictaphone's revenue from January 2005 to May 2005 is factored into the "Other" category. NICE and Verint's first-half 2005 revenues exclude video recording revenue, while Witness's figures exclude workforce management. Rounding out the remaining vendors are etalk, ($23 million, 5.6 percent), ASC ($16.2 million, 3.9 percent), Mercom ($11.8 million, 2.9 percent), Voice Print ($5.7 million, 1.4 percent), TantaComm ($5.5 million, 1.3 percent), Magnetic North ($4.5 million, 1.1. percent), HigherGround ($3.2 million, 0.8 percent), Envision ($3 million, 0.7 percent), Wygant $1.7 million, 0.4 percent), VoiceLog ($0.4 million, 0.1 percent), and Other ($65 million, 15.8 percent). The report also is segmented to reveal contact center revenue and market share, which includes coaching, e-learning, performance management, QM, speech analytics, and surveying applications, as well workforce management application revenue accrued by Witness and Envision. Witness edged past NICE by a hair to lead the segment with first-half 2005 revenue of $87.3 million, which includes five months of Blue Pumpkin revenues and first-half 2005 market share of 31.9 percent, while NICE pulled in $ 85.3 million and 31.1 percent, respectively. Verint took the third slot ($48.4 million, 17.7 percent), trailed by etalk ($23 million, 8.4 percent), Mercom ($7.8 million, 2.8 percent), Envision ($7.5 million, 2.7 percent), ASC ($4.9 million, 1.8 percent), Magnetic North ($3.9 million, 1.4 percent), Voice Print ($2.5 million, 0.9 percent), HigherGround ($2.1 million, 0.8 percent), Wygant $1 million, 0.4 percent), and VoiceLog ($0.4 million, 0.1 percent). When sliced to reflect contact center market share barring workforce management, as Envision and Witness are the only QM/liability vendors with these applications, NICE takes top billing, securing nearly one-third of market share for first-half 2005. Beyond stronger growth rates, other trends include a move from hardware-based recording to software-based recording primarily because of its price and ease of use. "It's much easier to change software than it is hardware," Fluss says, adding that there is increased interest in speech analytics, especially among larger organizations. Applications are also portal based, emphasizing performance management, contributing to the contact center, and have the ability to contribute to the enterprise at a whole, Fluss says. Overall, "we've seen tremendous innovation in {the QM/liability recording} arena in the past two to three years. Anyone who hasn't upgraded or taken a look at these applications for more than three years really should take a fresh look." QM Is Poised For Growth Forget Performance Scores, Review the Analysis
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