Who is Next to Marry after Genesys+ININ?

Sep 07, 2016

The Genesys Interactive Intelligence deal announced last week has opened the door to speculation about other possible M&As.  After all, business romances bloom in slow growing mature economies where investors are finally comfortable cashing out. Or, conversely, they want their holdings’ value to grow faster than what companies can achieve organically (eg new products, aggressive marketing).

There are several solutions “singles”, many of whom have anxious “parents” who want them out of their houses.  Aspect, Avaya, Envision, Mitel, and ShoreTel may be among the dance card holders.  Envision Telephony may be looking to marry as its competitors expand and diversify. And there are prospective partners who are looking for the right mates to build a stronger future together with. Enghouse, OpenText, Unify (Atos), and Verint could be among the possible suitors.

The customer contact industry is attracting attention because companies are at last recognizing that brand-promoting customers hold the keys to revenue retention and growth.  But customers will only insert and turn them if they have excellent omnichannel Customer Experiences (CX) through contact centers, web and mobile, and in-store. There is also an array of new products, notably connected buildings, appliances, equipment, infrastructure, and vehicles (Internet of Things) that require high quality service and support to gain and retain customers.

But here’s the rub:  increased CX focus may not translate into more seats, and by extension vendors’ revenues. In fact Frost & Sullivan research has forecasted that North American contact center seats will slightly decline over the next few years.  That is even taking into account contact center onshoring, witness the recent TV ads eg Discover Card that clearly mention U.S. based contact center agents.

There are four developments that are holding back contact center growth. One, consumer spending increases restrained by limited income growth and high debtloads.  Most income growth—and the greatest demand for excellent CX—is in the higher income bracket. But its population share is small, which may result in low overall call volume and solution demand. The masses of low-value customers only get live agents after self-service and long queues. Second, self-service machines (ie personalized mobile/web sites, virtual assistants, speech solutions) are becoming smarter. Consequently they are taking on more sophisticated inquiries. Third, technologies are beginning to heal themselves without support agent or field service intervention.  Finally, businesses are looking at how to tap their storefront employees and subject matter experts to handle customer inquiries.

Don't be surprised to see more business model disruptions, such as “Uberizing” solutions by charging per minute of live time rather than by user, and downloadable plug-and-play core solution apps. The industry is still coping with the shift from on-premise licenses to the cloud subscription model.

Moreover there is plenty of amortized hardware and software out there that their owner companies continue to add to and patch up.  And while software-only solutions are nice, and many business users rely on their smartphones, many businesses still like to have branded desktop phones. This factor alone may place Genesys ININ at a disadvantage against competitors like Avaya, Cisco, and ShoreTel.

In making up the new business communications and contact center solutions “households” the ones that have the more success of longevity are those that unite complementary products and markets and compatible business cultures.  I won’t speculate on the next marriage. But for companies who want advice, Frost & Sullivan can help.  We can identify tech, target markets, regional presence, and other synergies, and look at cost structures and cultures. While we may not be as flamboyant as Barbra Streisand’s character in Hello, Dolly! , we are just as confident in our advice and recommendations.

Brendan Read


Brendan Read is Senior Industry Analyst with over 25 years’ experience covering business, communications, staffing, and technology. He has worked in, prepared reports, and blogged on a wide range of topics including customer contact, CX, CRM, IoT, social media, supply chain, and BC/DR. He also has backgrounds in construction, manufacturing, materials, resource extraction, site selection, and transportation. He examines the broad economic, environmental, innovation, political, and social mega trends, and their impacts on businesses, markets, and society.

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