As cloud contact center offers mature, organizations are starting to consolidate to a single CCaaS provider for operations in multiple regions. Application leaders responsible for customer service can use this research to assess the best-fit provider for their geographic and functional requirements.
Strategic Planning Assumption
By 2024, contact center as a service (CCaaS) solutions that include functionality from all four pillars of customer service technology will represent 70% of all new CCaaS deployments, up from 20% in 2019
This research evaluates CCaaS providers offering SaaS-based applications that enable customer service organizations to manage multichannel customer interactions holistically from both a customer-experience and an employee-experience perspective.
CCaaS solutions are largely systems of differentiation. They enable an adaptive, flexible delivery model with native capabilities across the four pillars of great customer service and productized integrations with partner solutions through application marketplaces.
The core capability of a CCaaS solution is:
- Getting Connected - Focusing on delivering a channel-agnostic, architected design to create customer service journeys, including intelligent self-service. Services are consumed on a per seat, per concurrent user or transaction basis.
The optional capabilities of a CCaaS solution are:
- Process orchestration - Supporting increasingly complex and personalized customer engagements.
- Resource management - Developing and maintaining engaged and empowered staff based on the understanding that engaged employees power a stronger customer experience.
- Knowledge and insight - Delivering customer and operational insights and recommending next best actions across all functional groupings.
CCaaS solutions are used by customer service and telemarketing centers, employee service and support centers, help desk service centers, and other types of structured communications operations. They are now the go-to technology for most organizations looking to procure for sub-500 seat contact center environments. They are also starting to be deployed in multithousand seat environments, even though these may comprise multiple smaller entities. This reflects the desire by customer service organizations to consolidate multiple stand-alone environments and move forward with a single, strategic supplier. CCaaS solutions are typically deployed as an integral part of a broader customer service and support technology ecosystem.
Figure 1. Magic Quadrant for Contact Center as a Service
Source: Gartner (November 2020)
Vendor Strengths and Cautions
8x8 is a Challenger in this Magic Quadrant. Its CCaaS offering — 8x8 Contact Center — is an embedded capability of its cloud collaboration platform, and is offered either bundled as part of X Series (a UCaaS/CCaaS communications suite) or more recently as a stand-alone solution.
8x8 has a strong global footprint as a result of its market leadership in UCaaS. Its sweet spot for CCaaS is addressing the needs of small and midsize businesses (SMBs), but it is also starting to serve the needs of large enterprise customers.
8x8 has made good progress in strengthening its commitment to the four pillars of great customer service, with partnerships for workforce engagement management (WEM) and virtual customer assistant (VCA).
- Geographic strategy: 8x8’s international expansion as a UCaaS provider offers a solid foundation to meet the needs of organizations’ contact center users in multiple regions, particularly where there is a requirement to support both UCaaS and CCaaS.
- Pricing: 8x8 has defined a range of competitive contact center bundles to meet different use cases for both customer service and enterprise communications.
- Customer experience: 8x8 has very positive reviews on Gartner Peer Insights, with improvements in scoring in the last 12 months for both North America and Western Europe markets.
- Service offer: 8x8’s focus on supporting all collaboration needs of organizations, internally as well as externally, is a distraction for customer service executives focused solely on technology selection for customer experience. Clients should ensure the project team represents the needs of the customer services business unit.
- Operations: 8x8’s business focus is largely limited to North America, the U.K., France and Australia, which may hinder its ability to support customer service organizations with requirements outside these locations.
- Service strategy: 8x8’s sweet spot is with SMBs, which means that for organizations with contact center requirements above 300 seats, 8x8 Contact Center may not be a best-fit platform. Clients with larger customer service requirements should ensure the feature set represents the needs of the customer services business unit.
Amazon Web Services
Amazon Web Services (AWS) is a Visionary in this Magic Quadrant. Its Amazon Connect is a specialized CCaaS offering that leverages the broader infrastructure and software capabilities of AWS. Amazon Connect is sold directly and through an emerging set of channel partners, notably Salesforce following its recent launch of Service Cloud Voice.
AWS launched Amazon Connect to market in 2017, having developed it internally to serve Amazon’s own customers. It has since been adopted by businesses of all sizes, from startups to global businesses, but especially by those customers using AWS as a DevOps strategy for service delivery.
AWS continues to develop Amazon Connect as a contact center solution with a graphical user interface (GUI) and an extensive set of APIs, which are used by partners and customers to deliver bespoke customer service requirements.
- Innovation: Amazon Connect’s consumption-based pricing approach offers the most agile terms in the CCaaS market, enabling organizations to experiment at low cost and revise service delivery between voice, chat and self-service without penalty or long-term, seat-based licenses.
- Geographic strategy: Amazon Connect leverages the global reach of AWS cloud infrastructure to host its contact center platform to very high levels of availability.
- Service strategy: The Amazon Connect product team can natively include the broader AWS portfolio to develop service propositions for customer service organizations, such as artificial intelligence (AI)/machine learning (ML), analytics and data lakes.
- Service offer: Amazon Connect’s feature set is still maturing. For customers looking to deploy highly complex/bespoke use cases, they will need to leverage capabilities exposed as APIs. AWS Professional Services or development partners can be used to complete a set of advanced contact center services. Organizations should catalog use cases and associated development costs to meet user requirements
- Pricing: Amazon Connect’s consumption-based pricing model requires that organizations understand in detail contact volumes to ensure that “pay as you go” does not result in a higher cost of ownership compared with other CCaaS solutions.
- Customer experience: Organizations that don’t already have an AWS DevOps practice are less likely to be comfortable with the “toolkit” approach to extending and customizing beyond the native features available today.
Content Guru is a Challenger in this Magic Quadrant. Its storm CONTACT is a specialized CCaaS platform offered to customers through a mix of direct and indirect channels.
Since launching in the U.K. in 2005, Content Guru has grown its footprint into Europe, the U.S. and Asia/Pacific markets. It is favored by organizations with larger, more complex contact center requirements, and is most likely to meet the needs of European-headquartered multinational organizations.
Content Guru continues to strengthen its commitment to the four pillars of great customer service through in-house development of its brain AI framework and Symphony for resource management (the latter a solution that came with the acquisition of Weston Digital by parent company Redwood Technologies Group). Its vision favors organizations with deep integration and customization requirements.
- Service offer: Storm CONTACT is recognized by customers as a highly scalable cloud platform with extensive integration and automation capabilities through its FLOW service builder portal.
- Market understanding: Content Guru has 15 years’ experience in meeting the complex customer service needs of especially large and high-profile organizations, with notable strengths in automation.
- Vertical strategy: Content Guru demonstrates a strong commitment to key market sectors across both public and private organizations.
- Operations: Most of Content Guru’s operations are centered in Europe, which means that, for organizations operating in other regions, service and support may require greater internal investment to manage the relationship.
- Pricing: The complexity of the storm CONTACT platform means that organizations need to spend more time understanding the “al la carte” licensing components and their charges that add to the overall total cost of ownership.
- Customer experience: Comments noted on Gartner Peer Insights indicate that complex integrations require a deeper focus on documentation, roles and responsibilities between Content Guru and the customer for provisioning, change control and ongoing management. Organizations need to strike a balance between relying on Content Guru for management and achieving certification for service creation.
Evolve IP is a Niche Player in this Magic Quadrant. Its Evolve Contact Suite is a CCaaS offering integrated with Cisco for unified communications and Microsoft for collaboration. It is delivered as a capability on the vendor’s OneCloud services platform.
Evolve IP’s footprint spans North America and Europe, aligned with the target markets for its UCaaS business that include selling to midmarket IT departments.
Evolve IP’s vision of deeper integration with Microsoft Teams, and alignment with its flexible Workspaces offering, are topical as organizations desire greater remote working for customer service advisors.
- Pricing: Evolve IP’s packaging of its CCaaS offering is very competitive, whether sold as an integrated solution with UCaaS or as a stand-alone proposition.
- Service offer: Evolve IP’s service proposition incorporates a broad set of collaboration capabilities, and this is attractive to IT departments with responsibility for managing the contact center.
- Customer experience: Evolve IP’s browser-based Workspaces proposition is attractive to organizations looking to implement flexible working in customer services.
- Geographic strategy: Evolve IP’s operation spans North America and the U.K. and the Netherlands in Europe, which may hinder the vendor’s ability to support clients with operational requirements outside these regions.
- Market understanding: Evolve IP’s focus on midmarket means that its unified collaboration capability might not resonate with application leaders solely responsible for customer service. Clients should ensure the selection team clearly understands the business requirements.
- Market responsiveness: Evolve IP has been slower than its competitors in this Magic Quadrant to pursue emerging solutions. Organizations may find that the vendor is less able to keep pace with the innovation of larger players with bigger budgets.
Five9 is a Challenger in this Magic Quadrant. Its Intelligent Cloud Contact Center is a specialized CCaaS platform offered to enterprises through a dedicated sales team and key system integrator partnerships.
Five9 has 19 years of experience meeting the needs of organizations initially in North America and now with expansion into Europe and Latin America. With its multiregion platform footprint, it is best placed to meet the needs of U.S. multinational organizations.
Five9 has made some important acquisitions and developments in the last year to bolster its commitment to the four pillars of great customer service and has started delivering a roadmap for a consolidated user interface.
- Pricing: Five9 offers some competitive pricing across a broad set of native and partner product and service capabilities.
- Service offer: Five9 scores very high on Gartner Peer Insights for its product capabilities, with market-leading, demonstrable capabilities in managing and mixing multichannel conversations.
- Market responsiveness: Five9 continues to execute well in terms of adding new customers both in the U.S. and internationally. Growth in sales to international offices of domestic customers is a highlight.
- Customer experience: There have been some platform upgrade challenges in early 2020 affecting North American customers, which impacted customer confidence. Clients should obtain confirmation from executives of resolutions to minimize recurrence.
- Geographic strategy: Five9’s growth internationally has, historically, come from the vendor’s strategy of extending service for U.S.-headquartered customers. Non-U.S. organizations should ensure their multiregion contact center platform rollout aligns with Five9’s geographic strategy.
- Operations: Five9 has only recently invested in expanding regional support for its customers outside of North America. Some organizations may find service and support requires greater internal investment to manage the supplier relationship.
Genesys is a Leader in this Magic Quadrant. Genesys Cloud is a specialized CCaaS platform, offered to organizations through a mix of direct sales and channel partner relationships, which vary between geographical regions.
Genesys was founded in 1990 and in 30 years has established a global sales, marketing and operations presence, meeting customer service requirements of organizations in more than 100 countries.
With Genesys Cloud, the vendor demonstrates a strong commitment to the four pillars of great customer service with a vision for more agile, on-demand service.
- Geographic strategy: Genesys has an extensive operational presence in multiple regions, and this geographic reach enables organizations to consider it strongly for contact center platform consolidation.
- Market understanding: Genesys is a long-term established player in the customer service market, with strong brand awareness and a market focus that is consistent with the needs of customer service organizations.
- Sales execution: Gartner Peer Insights references score Genesys high in terms of evaluation and contracting, with a notable improvement in the last 12 months.
- Pricing: For licensing and contract elasticity, Genesys scores much lower than its competitors in this Magic Quadrant. Organizations with seasonal demands should weight contract elasticity more heavily in shortlisting suppliers to achieve the most competitive bid response.
- Service offer: Adding new functionality is a continuous exercise with all CCaaS providers. Organizations looking to migrate from the Genesys PureConnect platform should work with the business unit to ensure Genesys Cloud can match functional requirements.
- Customer experience: Genesys scores lower than its peers in the Leaders quadrant for customer service. Organizations that anticipate a greater demand on Genesys for support may need to invest more in managing the service relationship.
Formerly Serenova, Lifesize is a Niche Player in this Magic Quadrant. Its CxEngage is a specialized CCaaS cloud platform offered directly and through channel partners.
Serenova was formed in 2009 following the spinoff from LiveOps — a business process outsourcing (BPO) provider. Following the merger with Lifesize in March 2020, the company began rebranding as an integrated video and contact center provider.
Lifesize demonstrates a good commitment to the four pillars of great customer service through acquisition and integration of partner offerings. Its vision for deeper video and collaboration channels with CxEngage is likely to address some niche but important new market opportunities.
- Service offer: Investment in CxEngage WEM capabilities is materializing in terms of integrated service offerings.
- Business model: The merger of Lifesize with Serenova creates a larger, combined company with some intellectual property to target vertical-specific applications.
- Pricing: CxEngage’s “bring your own carrier” approach is useful to large organizations with high volumes of inbound and outbound phone traffic and highly competitive call rates with existing carriers.
- Market understanding: The postmerger decision to operate under the Lifesize brand, and the new entity’s pursuit of positioning itself as a unified communications platform provider, deviate from the customer service focus in a market where Leaders specialize in supporting customer experiences. However, organizations looking to combine customer service with native video capabilities could find this strategy attractive.
- Operations: While the merger has created a bigger company with more presence, videoconferencing and collaboration are different markets to customer service, with different partner, customer and buyer audiences. Organizations need to confirm that Lifesize CCaaS solutions are available for deployment in their region.
- Sales strategy: The Lifesize management team intends to complement its existing CCaaS agent and reseller network with its existing videoconferencing channel partners to extend the reach of the CxEngage platform internationally. Organizations should ensure they are working with the Lifesize Contact Center Solutions business unit and a certified Lifesize CCaaS partner.
NICE inContact is a Leader in this Magic Quadrant. Its CXone is a specialized CCaaS platform offered directly and through a channel partner program that spans international partners. One of its key channel partners is RingCentral, a leading UCaaS provider that bundles CXone as part of an SMB offer.
inContact began life in 2002 and its acquisition by NICE in 2016 provided the investment for further acquisitions and international growth. This also made it a stronger service proposition of contact center and WEM to over 60 countries today.
NICE inContact demonstrates a strong commitment to the four pillars of great customer service with a vision of a more integrated approach for service delivery.
- Sales execution: NICE inContact scores high for the sales process relative to its peers in this Magic Quadrant. This includes flexibility in contract negotiations, responsiveness and willingness to adapt the contract in terms of customization and flexibility.
- Service strategy: NICE inContact has a comprehensive service strategy that spans the four pillars of great customer service through a series of multiple investments and product developments.
- Geographic strategy: NICE inContact’s geographic reach — with operational presence and channel partnerships across the globe — enables organizations to consider it strongly for contact center platform consolidation.
- Customer experience: NICE inContact received negative feedback on Gartner Peer Insights over the time it takes to resolve issues, which in part seems to be related to the broad portfolio of capabilities. Organizations that anticipate greater product support across the CXone portfolio may need to invest more time in managing the service relationship.
- Service offer: NICE inContact’s CCaaS proposition includes a full cloud-native suite and optional WEM and reporting capabilities that are not integrated as part of the CXone suite. In some cases, these best-of-breed products provide specialized capabilities beyond those of the current suite and are necessary, but may require additional resources to manage. Organizations that need more capabilities than the suite provides should ensure they understand the differences in service proposition of best-of-breed products.
- Operations: While NICE has built extensive international operations over 30 years of operations, NICE inContact’s reach may not be as extensive. Organizations should ensure they are provided with operational support capabilities of NICE inContact specifically, not NICE.
Odigo is a Visionary in this Magic Quadrant. A Capgemini brand, Odigo is a specialized CCaaS platform offered to selective markets through mostly direct sales and through Capgemini.
Originally formed in 2001, the company was previously known as Prosodie until a 2019 rebranding exercise to separate it from association with Capgemini. Odigo’s strongest proposition is with European multinational organizations.
Odigo presents a strong vision for development of natural language capabilities and automation as part of its contact center platform. It has a good commitment to the four pillars of great customer service, mostly through in-house development.
- Market understanding: Odigo has 19 years’ experience in customer service, coupled with the benefits of solution selling from its parent Capgemini — a large system integrator with a focus on business transformation.
- Service strategy: Odigo has a good vision for co-innovation with its customers to collectively drive new customer experiences using proofs of concept developed in multiple innovation centers around the world.
- Innovation: Odigo has a strong history in developing natural language understanding and AI for the customer service domain.
- Geographic strategy: Odigo’s business spans European countries and North America, which may hinder its ability to support clients with operational requirements outside these regions.
- Operations: The majority of Odigo’s operations are centered in Europe, which means that for organizations operating in other regions, service and support may require greater internal investment to manage the supplier relationship.
- Customer experience: Odigo is a one-stop shop that includes consulting and professional services. This limits the ability of organizations to maintain the service but switch to a different partner. Organizations adopting Odigo should pay special attention to the supplier’s abilities to meet their operational needs.
Talkdesk is a Leader in this Magic Quadrant. CX Cloud is the vendor’s specialized CCaaS platform, offered directly and through channel partners.
Founded in 2011 in Portugal, Talkdesk focused initially on the U.S. market, growing quickly before investing further in international expansion. Talkdesk represents a strong service proposition for multiregional organizations headquartered in North America and Europe.
Talkdesk demonstrates a strong commitment to the four pillars of great customer service, with a good vision for analytics-driven engagements for both the customer and the employee.
- Customer experience: Talkdesk consistently achieves high scores on Gartner Peer Insights for customer service and support, from the largest volume of Peer Insight references in the CCaaS market.
- Sales execution: Talkdesk is achieving some very strong customer growth, fueled by attractive pricing and strong commitment to the sales engagement process.
- Service offer: The CX Cloud administration and management portal is noted for its ease of use and minimal training requirements. This makes it easier for users to become familiar with configuring and using the platform.
- Geographic strategy: While Talkdesk has platform capability in multiple geographies, its sales and support organizations are based in the U.S. and Europe. Organizations with users outside these regions should ensure there is adequate support for their needs.
- Operations: The majority of CX Cloud scores on Gartner Peer Insights are from businesses with revenue of less than $1 billion. Prospective customers migrating from a large-scale legacy environment may experience challenges in project durations, as well as parity regarding feature functionality needs.
- Pricing: While Talkdesk monthly licensing rates are recognized as attractive, the vendor lacks a productized, consumption-based offering common to other Leaders in this Magic Quadrant. Prospective customers should analyze volume and occupancy levels to determine which licensing offer is more attractive.
Vocalcom is a Niche Player in this Magic Quadrant. Its Hermes360 is a specialized CCaaS platform offered to customers mostly through a mix of direct and partner approach across all markets assessed in this report.
Vocalcom launched Hermes in Europe in 2012. This remains its largest market, and its strongest proposition is with European-based, multiregional organizations. However, the vendor is growing internationally following subsequent CCaaS launches, including Vocalcom Salesforce Edition.
Vocalcom’s commitment to the four pillars of great customer service is mostly through leveraging its open API stack to integrate with third-party providers for CRM, WEM, chatbots and web tracking.
- Geographic strategy: Vocalcom has one of the strongest international presences of all CCaaS providers evaluated in terms of both customers and data centers in all five regions assessed in this report.
- Market understanding: Vocalcom has been present in the contact center market for 25 years, through which it has established a market presence and customer service practices in multiple geographies.
- Service offer: Hermes360 is a proven cloud platform and received good scores on Gartner Peer Insights and Gartner Digital Markets for digital channels, especially in support of a customer service, sales or telemarketing role.
- Operations: Despite having a presence in multiple geographies, the majority of Vocalcom’s operations are centered in EMEA and Latin America. This means that, for organizations operating in other regions, service and support may require greater internal investment to manage the supplier relationship.
- Market responsiveness: Vocalcom is still a smaller business than many of its competitors. Organizations may find it is less able to keep pace with the innovation of larger players with bigger budgets.
- Marketing execution: Without a stronger marketing focus, Vocalcom is at risk of losing mind share to larger competitors, lowering its ability to win business, which in turn may have a negative impact on investment in R&D. Organizations that have high expectations of continuous innovation from their CCaaS provider should ensure Vocalcom meets their technology aspirations.
Vonage is a Challenger in this Magic Quadrant. Its Vonage Contact Center forms part of a broader “programmable communications platform” strategy incorporating its UCaaS and CPaaS capabilities. Vonage Contact Center is sold mostly through direct relationships with referrals from Salesforce.
Vonage acquired NewVoiceMedia — a U.K.-based CCaaS provider — in 2018. Its largest market is still Europe, but it is using its global coverage to extend growth in the Americas and Asia/Pacific regions. Vonage is most likely to meet the needs of European multinational organizations.
Consistent with other UCaaS players, Vonage’s vision is for an integrated platform to meet the needs of all communications requirements of its customers, not just customer service.
- Service offer: Vonage Contact Center has a strong focus on an integrated user and administration interface, and customers give it consistently very high ratings on Salesforce AppExchange.
- Pricing: Gartner Peer Insights feedback indicates that Vonage scores high in terms of contract negotiations and pricing elasticity.
- Marketing strategy: Vonage rebranding as an integrated, programmable communications platform to cover an organization’s full communications is likely to be received positively by SMBs.
- Customer experience: Customers noted on Gartner Peer Insights that Vonage support outside of Europe is a weak area of service. Organizations with operations in the Americas and Asia/Pacific may need to invest more resources in managing service issues.
- Market understanding: The all-encompassing branding approach to addressing organizations’ communications requirements will potentially dilute addressing the key requirements for customer service organizations. Customer service leaders need to ensure their requirements are specifically dealt with in any new proposal.
- Marketing execution: Application leaders responsible for customer service are unlikely to resonate with the all-encompassing programmable communications platform approach. Organizations should ensure that, despite the rebranding, Vonage still maintains its focus on the need
- s of the customer experience.
Worldline is a Niche Player in this Magic Quadrant. WL Contact is a specialized CCaaS platform offered exclusively through primarily a direct sales relationship.
WL Contact was launched in Europe in 2002 and subsequently extended to North America, Asia/Pacific and Middle East/Africa in 2017. Worldline was divested from Atos in 2019 and is developing CCaaS as part of its customer engagement portfolio. Europe is by far its strongest market.
WL Contact is aligned with a broader set of payment solutions and this can make it attractive for niche, but important, service processes.
- Market understanding: Worldline has a strong history in payment solutions from its background as a BPO provider, which can be built on to target existing and new customers with CCaaS.
- Industry strategy: WL Contact’s strongest market proposition is as a complementary service to Worldline’s solutions portfolio spanning e-commerce, payments and digital banking.
- Innovation: Worldline has a differentiated approach to driving up the skill set of its customers to configure and manage their contact center platforms autonomously, rather than grow its professional services business.
- Market responsiveness: Worldline is a smaller business than many of its CCaaS competitors. Organizations may find it is less able to keep pace with the innovation of larger players with bigger budgets outside of its core industry focus.
- Operations: The majority of Worldline’s operations are centered in Europe, which means that for organizations operating in other regions, service and support may require greater internal investment to manage the supplier relationship.
- Pricing: WL Contact’s consumption-only licensing model requires that organizations understand in detail contact volumes and occupancy metrics to ensure “pay as you go” does not result in a higher cost of ownership compared with other CCaaS offers.
Vendors Added and Dropped
We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor’s appearance in a Magic Quadrant one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.
As this is a new Magic Quadrant, no new vendors were added.
As this is a new Magic Quadrant, no vendors were dropped.
Inclusion and Exclusion Criteria
To meet Gartner’s definition of contact center as a service (CCaaS) and be included in this 2020 Magic Quadrant for CCaaS, providers had to fulfill all of the following requirements:
- A minimum of $30 million total revenue as of 31 December 2019 composed of concurrent licenses, named user licenses and application consumption. This revenue stream is restricted to enterprise customers and does not include BPO or contact center outsourcing business. We required a letter certifying the minimum revenue requirements from each provider’s chief financial officer.
- Demonstrate sales, market and operational presence in North America and Europe and, optionally, any of the following regions:
- South America (including Central America)
- Middle East and Africa
- Services should primarily be offered on multitenant platforms and on multiple instances of software as required to meet the needs of customers across multiple geographies. (Multitenant software describes how the service provider operates a single software instance on which multiple customers can be supported.) Given the expanding scale of CCaaS, it is expected that some architectures may require a customer to occupy a single instance of software. CCaaS providers need to demonstrate how, irrespective of architecture employed, their software is able to provide customers with transparent access to the same set of services irrespective of location. Software updates must be simultaneously “pushed” to all customers regardless of location, avoiding the traditional “major upgrade” cycles typical of on-premises or single-tenant hosted/managed deployments.
- Contact center seat license ownership must be retained by the service provider. Customer contracts must allow for elasticity of usage (enabling customers to scale agent license or consumption up or down as usage demands change).
- At least 50% of CCaaS service revenue must be from inbound voice agent licenses (automatic call distribution [ACD]). Other licenses may include outbound voice (predictive, progressive or preview dialing) or routing of digital interactions (including email, web chat, SMS, social media, video or other channels). They may also include interactive voice response (IVR)/voice portal, WEM, call and/or desktop recording and analytics, knowledge management, workflow routing of noninteraction work items, integration with customer tracking (CRM) and other enterprise databases, and real-time and historical tracking and analytics. The service must provide prepackaged agent, supervisor and reporting applications, although these environments may be extended using a GUI-based interface or open APIs.
Gartner’s definition of CCaaS does not include:
- Hosted contact center services, in which system hardware and software are dedicated to individual customers.
- Managed services, in which the hardware and software are dedicated to a particular customer and run on the customer’s premises or third-party data center, but are managed by a third-party service provider.
- Enterprise server software repurposed as CCaaS offers.
The following providers of CCaaS did not meet the inclusion criteria for this Magic Quadrant, either because of insufficient multiregion presence or the minimum revenue requirements at the end of 2019 were not met.
Ability to Execute
Product or Service
The product platform should include the ability to offer (on a subscription basis) all contact center services expected in a suite platform (for example, IVR and speech, inbound and outbound multichannel contact routing, WEM and analytics). This should include a self-service capability to implement, manage, revise and report on operational performance.
Several cloud service providers have yet to achieve profitability as rapid growth and business expansion plans require investment in technology, people and infrastructure to achieve the business growth plans. Many CCaaS providers are private or a business unit of a larger company, thus don’t report a detailed balance sheet to examine financial viability. Revenue indications and growth are important factors here, as is the overall business strategy for success, which is more readily available to be assessed.
The market for CCaaS has yet to reach saturation, so there are plenty of opportunities for continued growth. We expect suppliers to be able to demonstrate better than 20% annual growth year over year (though 2020/21 will likely be much lower), with a good selection of references from large or well-known organizations, including those with more than 300 agents. Cloud services are elastic and licensing terms should reflect this, enabling a customer to scale up and down in line with business requirements. While minimum commitments to licenses are to be expected, customers should have the flexibility to vary consumption. Usage-based licensing (per minute/per transaction) are useful additions emerging in some providers.
With several new entrants to the CCaaS market taking market share, being an established player is not a major advantage in terms of securing new business. COVID-19 represents an opportunity for CCaaS providers in 2020 to demonstrate their agility in responding to unprecedented demand for their services.
CCaaS providers with strong brand awareness tend to be invited to tender for more opportunities than those without strong brand awareness. This helps them win more business. A comprehensive marketing program is important to attract invitations to bid for opportunities. Brand awareness is also key to developing channels with system integrators, where they are less likely to go to market with providers of which their customers are unaware.
Developing a reputation for consistently delivering reliable services and delivering a differentiated customer experience can help suppliers maintain and grow a CCaaS business ahead of the competition. This is especially important as customers commit to a strategic CCaaS provider for multiple regions, but still expect to be supported in a timely fashion by a local support organization.
Contact centers provide critical front-office operations, and customers need to be confident that their CCaaS will be supported by talented, experienced and motivated staff. As customers select strategic suppliers for multiregional needs, CCaaS operations will need to be localized.
Table 1: Ability to Execute Evaluation Criteria
Completeness of Vision
Understanding the role that a cloud contact center plays in an organization’s customer service and broader customer experience strategy — and how it relates to other capabilities — is important for success. Market understanding includes anticipation of market consolidation, new competitors such as CRM players, and how to defend as well as grow relevance.
Communicating a differentiated strategy in a market where technologies are largely similar is crucial to win mind share. Gartner clients are increasingly asking about using a single provider across multiple geographies, which should be reflected in a CCaaS provider’s marketing strategy.
Striking the best balance between direct and indirect approaches to the market is important when the cost of sale can be very high and compensation impacts cash flow. As clients select a strategic provider for CCaaS, providers must balance customers’ desire to deal directly and centrally for contract terms, but be managed locally for regional needs. Managing internal conflict between local sales offices is key to executing on a strategic relationship with a customer.
Offering (Product) Strategy
Vendors should be able to demonstrate an approach to product and service development and delivery that highlights industry requirements, and the speed at which differentiated or innovative services are added to the platform. Using communities to act on insight from customers to influence product development will be increasingly important as vendors scale.
An important criterion is the relevance of the commercial model to how a vendor proposes to use a combination of direct sales and channel distribution to scale the availability of its service. Partners need recurring revenue too, and the model by which they can profitably resell and support CCaaS customers will be key to the CCaaS provider’s success.
A specific focus on industries or other segmentation, such as contact center size, is an opportunity to increase mind share in key target markets, in contrast to a horizontal, all-encompassing market vision. For CCaaS providers with lower marketing budgets and reduced overall mind share, the best opportunity to compete and win against the larger players exists in a differentiated vertical or industry strategy.
This is the vision to see opportunities to differentiate services for customers, either through in-house development or collaboration with innovative partners. Providers should reflect the future of applications as APIs and marketplaces.
The vendor’s strategy for growth outside its home market in order to attract a larger audience is key to meeting the contact center needs of global and multiregion organizations. CCaaS providers’ approach to this will be critical to profitable growth.
Table 2: Completeness of Vision Evaluation Criteria
Leaders are best described as suppliers with strong support for the four pillars of great customer service, and with an ability to serve multinational organizations with local sales and support organizations. Leaders are more likely to serve customers through channel partners and have strong brand recognition, which has resulted in a large installed base or above-average market growth as a result of customer demand. Leaders also benefit from being able to support varying levels of deployment complexity, including integrations with partners through established marketplaces.
Challengers may have large installed bases of customers, but don’t necessarily have the brand awareness or adoption of market leaders. Challengers are often less mature than Leaders in their multiregional market approach, preferring to focus on strengths in a subset of markets. They may have recognized strengths in serving customer-size segments or specific vertical markets. But they are also most likely to have less developed product capabilities than Leaders, or lack marketplace representation.
Visionaries have strong multichannel product and service capabilities and a clear strategy for sales, marketing and business development. They differentiate themselves by adding unique or innovative functionalities and/or delivery capabilities, which gives them some brand awareness in target markets. Visionaries tend to be smaller in terms of overall size, limited by investment potential for larger international growth.
Niche Players may be quite large or experiencing strong relative growth, but have decided to focus on a particular market opportunity, a set of solutions or certain vertical markets. Their products and services may still be undergoing product development, or they may rely heavily on partners to complete their service proposition. Niche Players are likely to be either new or relatively recent market entrants, or suppliers that have yet to build a large customer base.
The 2020 Magic Quadrant for Contact Center as a Service replaces our previous years’ focus on a single region in the Magic Quadrants for North America and Western Europe. Client organizations are increasingly asking to consolidate their contact center platforms across multiple geographic regions with a single provider. This year, we start with assessing the abilities of CCaaS providers to meet the multiregional needs of organizations headquartered in North America and Europe. This includes an evaluation of North American and Western European vendors’ support for their clients’ regional divisions in countries outside of North America and Europe. While we recognize that many providers in this year’s Magic Quadrant also sell to organizations in other geographies, the evaluation in this research is targeting the needs of Gartner’s majority audience for CCaaS, which is North America and Europe.
Market consolidation will enable customer service organizations to meet their technology needs across the four pillars of customer service with a smaller number of providers. Over the last 12 months, CCaaS providers continue to make acquisitions of adjacent technology to offer a broader suite of capabilities. While the core capability of CCaaS is to support getting customers connected, vendors assessed in this Magic Quadrant scored better if they also had native capabilities in the other three pillars of process orchestration, knowledge and insight, and resource management.
2020 has been a catalytic year for cloud services, with the COVID-19 pandemic triggering organizations to rethink their customer service strategies — initially to incorporate remote working, and subsequently digital agility and cost optimization initiatives. Most CCaaS providers have experienced strong demand for their services through 2020, as organizations uncover inherent inflexibility in premises-based contact center platforms or, simply, they have been unable to cope with sudden increases in contact volumes. Through the pandemic, CCaaS providers have demonstrated their agility and flexibility to rapidly deliver new services such that we expect CCaaS will dominate contact center decision making from this year forward.
The market for contact center as a service comprises cloud-based technologies that support a customer service strategy. The buyers for CCaaS are primarily focused on replacing premises-based and server-based contact center infrastructure with a SaaS-based capability. Early adoption of CCaaS focused on integrations with cloud-based customer engagement center (CEC) vendors.
The primary goal of customer service leaders with CCaaS is to deliver an agile, elastic capability for the telephone channel. But there is also consideration for the ability of CCaaS providers to support digital channels, as well as the adjacent capabilities of workforce engagement management (WEM), knowledge and insight. The opportunity to reduce the number of vendor relationships for the entire stack of customer service technologies is a compelling proposition. CCaaS providers offer this as a differentiated approach to premises-based technology providers, thereby fueling strong double-digit growth — see Forecast Analysis: Contact Centers, Worldwide.
This is a new Magic Quadrant for 2020, merging the previously separate Magic Quadrant publications for contact center as a service for North America and contact center as a service for Western Europe. The rationale for the merger is that clients are now investigating the opportunity to standardize their CCaaS platforms in multiple regions around the globe. As 90% of our inquiries are with clients in North America and EMEA, this year’s evaluation is oriented toward the needs of those clients. We do not regard this as a global document, but instead a multiregional one. CCaaS providers in this Magic Quadrant are evaluated on their abilities to sell to North American and European multinational organizations. This is achieved by having an operational presence in multiple countries, including those countries outside of North America and Europe.
There are several market directions that we believe should influence customer service leaders’ planning and platform selection over the next 18 months to two years.
CCaaS Platform Consolidation
For organizations with multiregional customer service requirements, an opportunity exists for them to standardize on a common CCaaS platform for all customer service needs everywhere. This includes tight integrations to CEC and other applications to form a common approach to managing customer relationships. This opportunity is a key driver for this new Magic Quadrant. While there are few CCaaS providers that can execute on a truly global scale today, we expect to see geographic capabilities — in terms of operations and support — continue to develop to ensure providers better meet customer demand in multiple regions.
Consolidation in the Customer Service Technology Marketplace
As discussed in Prepare for the Impact of a Consolidating Customer Service Technologies Marketplace, we anticipated that CCaaS providers would no longer be the sole providers of support for the telephone channel. CCaaS providers that historically have enjoyed a fruitful partnership with CEC vendors will increasingly find themselves in competition and need more capabilities across the four pillars to offer differentiation beyond “getting connected.” Organizations will have increasing opportunities to explore how they may eliminate overlaps and fill gaps in their strategy for enabling customer service technology.
Digital-First Customer Service Strategies
As stated above, the primary market for CCaaS is to provide a telephone channel for customer service. This is reflected in the license structure for CCaaS providers — the service proposition starts with IVR and ACD and adds on email, chat and social channels. Equally, we know from market surveys (see Survey Analysis: Digital Maturity in Customer Service, Investments and Impacts) that customers can achieve a better customer experience in the digital channel. Organizations that wish to capitalize on this will shift their customer service strategy to focus on providers that offer a digital-first customer service proposition. Emerging providers with a digital-first proposition (see Market Guide for Digital Customer Service and Support Technologies) offer an alternative approach to upgrading from legacy customer-premises equipment. CCaaS providers are mostly capable of offering a digital-first proposition, but licensing approaches don’t yet make this an attractive commercial proposition. Organizations should review CCaaS licensing terms on an annual basis and encourage providers to offer greater license flexibility to meet digital-first aspirations. Providers that cannot satisfy the digital appetite should be excluded from future technology strategies.
Collaborative Customer Service
Organizations that put the customer (not products or services) at the center of their CX strategy require deeper employee collaboration across their organization (and with partners) to effectively deliver on a collaborative customer service initiative (see A Collaborative Approach to Customer Service Will Drive Higher Customer Satisfaction). Most CCaaS providers have focused on being agnostic to organizations’ communications infrastructures. But in order to achieve a greater level of employee collaboration in fulfilling customer needs, there will need to be a deeper level of integration with organizations’ core workstream collaboration platforms such as Microsoft Teams, Slack or Google Hangouts.
Leveraging workstream collaboration as a media platform for customer service has been profiled recently during the COVID-19 pandemic, highlighting technical challenges of home working for all workplace employees, not just customer service advisors. Organizations with which Gartner has engaged during the pandemic have expressed a technical challenge — that customer service advisors working at home experience better voice connections to meetings solutions such as Microsoft Teams, Webex and Zoom than to premises-based contact center platforms. This initially drove adoption of CCaaS solutions during the pandemic. But as a longer-term strategy, organizations committed to collaborative customer service would leverage their workstream collaboration platform as a common media platform across front- and back-office work environments (see How to Optimize Microsoft Teams With Cloud Contact Center Platforms). Organizations embarking on a collaborative customer service strategy should include their digital workplace colleagues as part of the project team to assess the technical interworking between workstream collaboration and CCaaS.
We used Gartner Peer Insights data for CCaaS markets of North America and Western Europe, along with commentary in Gartner Digital Markets. Reviews of the last 12 months were available to influence our ratings.
We specifically did not request vendor references this year due to the additional workload, created by the COVID-19 pandemic, for participants and their customers.
Each vendor was asked to respond to a request for information and provide either a video presentation or a live briefing as part of this year’s analysis.
We reviewed public-facing materials from vendors including websites, blogs and technical spec sheets.
We reviewed public financial statements for vendors, which influenced both vision and execution criteria.
Analysts conducted more than 1,500 client interactions between May 2019 and May 2020 on the topic of contact centers, and this assisted us in our understanding of market needs, directions, and strengths and challenges of vendors.
Evaluation Criteria Definitions
Ability to Execute
Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.
Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.
Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.
Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.
Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.
Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.
Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.
Completeness of Vision
Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision.
Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.
Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.
Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.
Business Model: The soundness and logic of the vendor's underlying business proposition.
Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.
Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.
Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.