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.
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:
The optional capabilities of a CCaaS solution are:
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)
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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:
Gartner’s definition of CCaaS does not include:
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.
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
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.
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.
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.