analysis of the hosted and cloud contact center market in latin america
TRANSCRIPT
Analysis of the Hosted and Cloud Contact Center Market in Latin America
The Solution to Improving Business Productivity Fast and at a Lower-Cost
December 2013
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Contacts
Maiara MunhozIndustry AnalystICT Latin America
+55 11 98443.9927
Juan Manuel Gonzalez Industry ManagerICT Latin America
(5411) 4777 1555
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Executive Summary
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Executive Summary
• The hosted and cloud model enables contact centers to be more productive, offering a better service to its clients with reduced capital expenditures when compared with an on-premises implementation model.
• With a hosted or cloud solution, all of the features and functionality is on demand, in other words, it is easily scalable; so, as business needs an increase or decrease in any of the resources, they can adapt quickly by adding or reducing those.
• The operating expenditure (OPEX) model for hosted and cloud contact centers allows small and medium contact centers to count with resources and technologies that traditionally only large enterprises have been able to afford, since it required a heavy capital investment and a dedicated team to lead with infrastructure maintenance and management.
• Large enterprises have been more interested on the dedicated cloud model, since it provides them with the security and reliability that are essential to them. On the other hand, small and medium businesses are drawn by the multi-tenant cloud model, which offers advanced technology at a low cost.
• By leaving the management of the IT infrastructure to a specialized vendor, channel or service provider, companies free up resources that can be used to empower the focus on the main core business.
• In Latin America (LATAM), the hosting and cloud solutions market for contact centers is still in a nascent phase, however some companies have started to get interested and early adopters have emerged.
• Vendors and service providers tend to increasingly develop a hybrid deployment strategy for companies, whom will be able to choose from an on-premise or cloud solution as they feel necessary.
Source: Frost & Sullivan analysis.
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Market Overview and Definitions
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Research Scope
Source: Frost & Sullivan analysis.
• This research study covers hosted and cloud solutions for contact centers in Latin America.
• While this study covers several hosted and cloud applications, the most important and frequently used ones are hosted IVR, hosted ACD, hosted outbound customer contact, and hosted APO (Workforce Management, Analytics and Quality Monitoring).
• The base year for this research study is 2013.
• The study discusses market trends, drivers and restraints, supply and demand, and strategic considerations for hosted and cloud solutions for contact centers.
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Research Methodology
Source: Frost & Sullivan analysis.
• Frost & Sullivan conducted extensive primary interviews with the leading contact center solution providers, channels and service providers in LATAM.
• The secondary research consisted of extensive reviews of industry publications, SEC filings, annual reports, press releases issued by market participants, and Frost & Sullivan's in-house databases and historical data.
In-house Information/ Secondary Research
Hosted Contact Center Application
Vendors
System Integrators/ Channels
Hosted Contact Center Service
Providers
Data Collation, Analysis and Strategic
Review
Final Research Service
Frost & Sullivan Research Methodology
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Market Overview—Geographical Coverage
Latin America
Source: Frost & Sullivan analysis.
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Market Overview—Key Questions This Study Will Answer
Source: Frost & Sullivan analysis.
1 What is the status of the Hosted and Cloud Solutions Market for Contact Centers in Latin America today?
2 What are the trends, drivers and restraints impacting the Hosted and Cloud Solutions for Contact Centers in Latin America?
3 What are the main players participating in this Market and what is the go-to-market model they are using for their Hosted and Cloud solutions?
4 How are companies structuring their offer of Hosted and Cloud Solutions for Contact Centers in Latin America?
5 Which are the main adoption trends of the Hosted and Cloud Solutions Market for Contact Centers in Latin America?
6 What are the recommendations for companies that are interested in this market?
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Market Overview - Introduction
• Contact centers as a service is not a new concept in the market, but it is only within recent years that it has become a part of an everyday conversation, especially with respect to the booming new concept of the cloud.
• Much of that has to do with external factors, such as the rise of Salesforce.com and Google Apps, among other Web-based applications that have made people aware of the idea that they can offload application processing to a service provider. As a result, this new business and implementation model is becoming much more familiar.
• In addition, the prolonged economic downturn has forced many centers to rethink their approaches to capital spending and infrastructure, in light of restricted budgets.
• The objective of this market insight is to understand the benefits of the hosted and cloud implementation model for contact center applications, identify the different types of business models that have evolved, their ecosystem, and the business drivers, enablers, and inhibitors that are impacting the adoption of the on-demand contact center applications in LATAM.
Source: Frost & Sullivan analysis.
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Market Definitions
• What is the cloud?o In spite of being one of the terms more frequently heard in the market, the cloud continues to be a
vague concept. o The following information presents its meaning from two perspectives: technology and business:
Tech
nolo
gy
What it is:The U.S. National Institute of Standards and Technology (NIST) defines the cloud as a model for enabling a ubiquitous, convenient, and on-demand network access to a shared pool of configurable computing resources. It is hardware, software, storage, networks, and services that are shared to varying extents between users. The NIST-defined cloud model is composed of five basic characteristics: on-demand self-service, broad network access, resource pooling, rapid elasticity, and measured service.
Cloud models:• Infrastructure-as-a-
Service (IaaS): the infrastructure hardware is outsourced
• Platform-as-a-Service (PaaS): providers manage the infrastructure and development environment, with clients supporting the applications.
• Software-as-a-Service (SaaS): the provider hosts and maintains the applications and data.
Cloud delivery methods:• The public cloud entails hardware
and software offered by providers to multiple clients
• The private cloud utilizes enterprise architecture that resides in either on-premises data centers or dedicated hosting by providers.
• The hybrid cloud is a mix of on-premises and hosted solutions. They can be separate components, such as premises-installed ACD or call recording, but hosted IVR. In addition, they can be split within the functions, such as hosted applications and call control and data that resides on the premises.
Source: Frost & Sullivan analysis.
Cloud Model Definition
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Market Definitions (continued)
• What is the cloud? (continued):o The business dimension of the cloud tends to gather less attention up front, but it typically involves
a more intricate set of considerations. o One is a set of trade-offs based on the different characteristics of the shared-tenant platforms that
are found in the public cloud models versus the dedicated/single-tenant platforms that are typically found in private and hybrid cloud models:
Bus
ines
s
Shared cloud
• Client-facing software and networks, real estate footprints, and personnel are divided between clients.
• The shared cloud trades off customization and functionality for lower costs.
Dedicated cloud
• Each client has its own servers and applications that are assigned to them.
• The dedicated cloud may trade off some of the cost savings of going to the cloud for a higher degree of security and control, as well as more flexibility to customize application functionality, integrations, and support to address specific business needs.
Source: Frost & Sullivan analysis.
Cloud Model Definition
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Market Definitions (continued)
Frost & Sullivan definitions for this study:
• Hosted contact center applications is a network-based service in which a service provider hosts a contact center platform and provides contact center applications to customers as an on-demand service.
o The customer pays a usage-based fee for the service. o Pricing is typically on a per-agent-per-month, concurrent ports, or on a per-minute basis.
• An application provider is an entity that brands and sells a product directly or through channels. It may design and manufacture its own products or ensemble systems from components that others produced. Application providers generally maintain strong relationships with service providers for hosting and offering software-as-a-service solutions.
• A cloud provider is an entity that owns the infrastructure required for offering cloud and hosting services, such as scalable virtualized servers, and commercially distributes and sources it across several customers through an on-demand or pay-per-use model.
• A solutions service provider is an entity that offers various types of services directly to the customer, whether or not it has the appropriate infrastructure. It might count on partners and providers to provide the services, but such reliance is transparent to the client. The service provider owns the relationship with the client.
Source: Frost & Sullivan analysis.
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Contact center applications providers
Products Market
Geographic scopeThis research service analyzes selected Latin American regions, including Brazil, Mexico, Central America, and the Caribbean (CACAR), as well as the Southern Cone, the Andean Region, Argentina, Chile, and Colombia.
Inbound contact routing
• Automatic call distributor• Computer telephony integration• IP contact center suites
Contact center servicesproviders
Interactive voice response
Outbound dialing systems
Agent performance optimization
• Quality monitoring• Workforce management• Performance management• Speech analytics
Researchsegmentation
overview
Implementation
Hosted contact center
Market Definitions (continued)
Source: Frost & Sullivan analysis.
Market Research Scope
Benefits of hosted services over on-premises:
oLower total cost of ownership (TCO)
oBusiness model that is based on OPEX instead of capital expenditure (CAPEX), thus reducing the initial investment
oRapid deployment times and greater flexibility and scalability
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Market Definitions (continued)
Frost & Sullivan definitions for this study:
• Hosted automatic call distributors (ACD) services is a network-based applications that facilitate the automated handling of inbound customer contacts.
• Hosted interactive voice response (IVR) services is a network-based applications that support business-specific automated interactive customer contact processing, such as for call steering or self service.
• Hosted outbound customer contact services is a network-based applications that support the automated placement of outbound customer contacts. These contacts can be based on an outbound dialer, IVR, or alerting/notification applications and support multiple media types including voice, text, and video.
• Hosted agent performance optimization (APO) services is a network-based applications that support contact center agent performance optimization. Typical APO applications include: call recording, quality monitoring, workforce management, product management, and analytics.
• The following services are not included in the scope of this study:
o Self-hosting enterprises
o Managed on-premises services deployments
o Agent-only outsourcing services
o Alerts and notifications for public safety/emergencies
Source: Frost & Sullivan analysis.
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External Challenges: Drivers and Restraints—Total Hosted Contact Center Market
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Drivers and Restraints
Lower TCO of hosted and cloud solutions in comparison to on-premise systems
Rapid time to deployment and business valuePerceived lack of network availability and
stability
Shifting from CAPEX to OPEX business models Resistance to change from on-premise models
Total Hosted and Cloud Contact Center Market: Key Drivers and Restraints, Latin America, 2013
Source: Frost & Sullivan
Perceived lack of network security and customer data privacy
Release focus on non-core business
Flexible scalability and business agility
Perception of reliability assurance
Channels and Service Providers need focus and expertise
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The Last Word
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The Last Word—Predictions
2There are few out-and-out replacements of premise-based systems. As companies come to the end of product life cycle with some of their existing premises’ infrastructure, Frost & Sullivan believes that the potential growth curve for hosted systems will become steeper.
4Premises-based vendors will be forced to articulate clearly their cloud migration strategies to their customers. Companies lacking a clear roadmap for such new technology platforms are likely to struggle, as competitors offer low-cost, easy-to-operate applications.
Source: Frost & Sullivan
3Larger companies focus on reliability and security (that is why they usually opt for dedicated cloud solutions), and have a long-term plan for deployment that may retain a mix of premises and off-site tools, depending on the unique needs of the organization.
1There has been a great development of the Cloud Contact Center Market in the last year, mainly in Chile, Peru, Argentina, Mexico and Brazil. That tendency is expected to grow in the next couple of years in those countries and also in Costa Rica and Colombia.