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The global cloud based contact center market size was USD 11.01 billion in 2019. The global impact of COVID-19 has been unprecedented and staggering, with cloud based contact centers experiencing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market will exhibit a lower growth of 22.1% in 2020 as compared to the average year-on-year growth during 2016-2019. The market is projected to grow from USD 13.45 billion in 2020 to USD 56.37 billion in 2027 at a CAGR of 22.7% in the 2020-2027 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The demand for cloud computing is escalating at a high rate owing to its robust scalability, affordability, flexibility, and convenience features. Therefore, organizations are increasingly looking to migrate their contact center operations from a traditional on-premise model to the cloud. For instance, in November 2019, Five9, Inc. acquired SpiderMonkey, d/b/a Whendu’s iPaaS platform to support the enterprise’s contact center transition to the cloud. The cloud-based contact center is not tied to a physical location and allows contact center agents to work remotely. This remote working approach helps contact centers to improve their agent’s productivity and, in turn, the overall operational efficiency. The cloud infrastructure offers excellent security, reliability, and convenience at affordable prices, which are key factors driving the adoption of these contact centers.
The cloud based contact centers enhance the transparency of customers who communicate through multiple channels including voice, video, web chat, social media, and mobile apps. Besides, service-centric, cloud-based software deployments are now a feasible option to manage the entire contact center operations, from self-service and routing to workforce optimization and analytical reporting. Thus, vendors are increasingly developing roadmaps to migrate their contact center operations from traditional on-premise models to cloud-based deployment models. For instance, as per the ‘State of Customer Experience Report – 2018’, 39% of contact centers in the UK have migrated their operations to the cloud, while 57% have planned to shift to cloud based contact centers in the coming three years.
Remote Working Practices to Increase Cloud-Based Deployment
The sudden outbreak of COVID-19 has made contact centers a reliable, unique, and convenient option for companies to continue their business. As the pandemic has escalated the demand for remote working approaches, the adoption of these contact centers has increased during the period. Advantageous factors including flexibility, affordability, scalability, and easy integration offered by the cloud-based system further encourage the transition of contact centers to the cloud. While several organizations had set-up the business continuity plan before the pandemic, the majority of others did not consider a scenario where each employee was forced to Work From Home (WFH). Organizations that had already shifted their contact center operations to the cloud have easily survived their business continuity during the pandemic time.
The demand for cloud based contact centers is likely to continue even after the crisis, as several businesses have planned to continue working from home in the post-pandemic time. For instance, as per the survey conducted by NICE Ltd., almost 70% of contact centers worldwide expect that they will continue working from home after the outbreak. The survey also revealed that 66% of new companies are planning to accelerate their move to cloud based contact centers due to the crisis. This is estimated to increase the cloud-based deployment.
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Omni Channel Cloud Based Contact Center Ability to Handle Customers from Multiple Communication Channels
Customers today want the ability to contact companies through their methods of choice. Omnichannel contact center offers multichannel customer engagement by providing customer connectivity across all possible touchpoints. Thus, the vendors have increasingly started deploying omnichannel cloud call center solutions to enhance their customer experience. These solutions are useful in connecting customer interactions, such as social media, texts, and voice, to carry perspective throughout the customer journey. Easy, quick deployment without affecting the overall operational cost is crucial in driving omnichannel cloud contact center adoption. The companies are continuously improving the security, flexibility, and scalability features of the solution as per the changing business needs. Omnichannel connectivity empowers businesses to deliver a seamless, personalized customer experience through multiple channels. Thus, the increasing demand for omnichannel cloud-based contact centers is projected to drive market growth.
Advanced Features such as High Level of Security, flexibility, Scalability, Affordability, and Reliability to Drive the Demand for Cloud-Based Solution
System reliability is one of the most significant causes responsible for migrating organizations from their existing on-premise contact center solution to the cloud-based solution. Advanced cloud contact center architecture adds an extra level of security standards, which is the prime demand of organizations. Flexibility, functionality control, and improved performance are the key factors responsible for the driving adoption of cloud-based solutions. Cloud deployment enables businesses to host their contact centers at third-party data centers, eliminating the need for any hardware infrastructure. As a result, the overall infrastructure cost is reduced significantly. In addition, a cloud based contact center enables instant scaling of the workforce team to meet the customers’ demand quickly. Thus, small and medium-sized enterprises are progressively migrating from on-premise contact centers to cloud-based models.
Artificial Intelligence to Cultivate New Growth Opportunities for the Market
Artificial intelligence (AI) has transformed the entire contact center landscape by efficiently automating several operations. These Cloud-based centers with AI are cultivating various opportunities for the market to grow. The technology provides reliability to contact center agents by automating the most repetitive tasks. This automation saves the agent's time so that they can focus on serving the customers. AI-based contact center model provides actionable discoveries and consumer insights useful for optimizing the agent's productivity and overall efficiency. In addition, AI-based contact centers enhance predictive and prescriptive models' performance to resolve complex issues of customers quickly. Organizations are increasingly directing their visions toward the AI-driven cloud contact centers to improve and automate the contact center operations. For instance, in April 2020, Vocalcom Group launched a new AI-based contact center solution named ‘Vocalcom Hermes360’. This omnichannel and intuitive solution allows contact centers to simultaneously improve customer satisfaction and agent experience, irrespective of their location or communication channel. The solution is available in the on-premise and cloud deployment options. Hence, AI is expected to be opportunistic for the market growth during the forecast period.
Vulnerability of Cloud to Cyber-Attacks May Affect Adoption
In most cases, enterprises store confidential data on the cloud, which has become the main target for cybercriminals. Therefore, Cloud-based applications may be vulnerable to cyberattacks. As per the ‘Data Threat Report- 2018’, published by the Thales Group, 49% of The United States financial respondents feel either ‘extremely’ or ‘very’ vulnerable to the cyberattack. Contact centers handle an enormous amount of valuable customer data. They frequently gather and store a lot of customer information that entices cybercriminals to target contact centers. Thus, growing concerns regarding cyberattacks may affect the adoption of the cloud based contact center.
Interactive Voice Response, Automatic Call Distribution, and Computer Telephony Integration to Play Key Role in Driving Significant Market Growth
Based on the component, the market has been segregated into solutions and services. The solution segment is holding a substantial market share, while the service segment is expected to witness significant growth during the forecast period. The services segment is further categorized into professional and managed services wherein professional services, such as integration, deployment, and optimization, are expected to hold maximum share. Managed services are estimated to grow at a faster pace.
The solution segment is classified into Interactive Voice Response (IVR), Automatic Call Distribution (ACD), Computer telephony Integration (CTI), call recording, reporting and analytics, dialer, workforce optimization, customer collaboration, and others. Among these, IVR and ACD are projected to capture a significant market share, as organizations focus on streamlining and automating the massive volume of calls efficiently and cost-effectively. A cloud-native call/contact center solution is a progressive move that has transformed customer service perceptions in the call centers. On-premise IVR or telephony-related call center deployments have a disadvantage in that they can only be operated efficiently if multiple agents are working from a single location. A cloud-based solution allows contact center agents to provide their IVR services through remote locations. It also reduces the requirement for hardware or software and can be implemented fast. The easy to use the feature with simple administrative interfaces further escalates the adoption. The cloud-based solution adds features, such as voice recognition, to boost the accessibility of IVR. Thus, the IVR solution holds a significant share in the global marketplace. Outbound dialers and computer telephony integration also hold a sufficient role in driving the adoption of cloud-based solutions.
A cloud-based workforce management solution helps companies to improve their routing capabilities and optimize each interaction. Vendors are increasingly adopting cloud-based solutions for contact center workforce optimization. This is anticipated to drive the growth of this market in the coming years.
Companies are increasingly looking for a wide range of reporting and analytics tools to make informed business decisions that enhance the overall contact center performance. The reporting and analytics tool provides up-to-the-second analytics and real-time dashboards information that is needed to run contact center operations across teams and channels. This is estimated to drive the demand.
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Combined Benefits Offered by the Hybrid deployment to Propel Demand
Based on the type of deployment, the market has been segmented into public, private, and hybrid deployment. The public deployment is estimated to capture a significant share, followed by the hybrid cloud deployment. Vendors are majorly deploying their cloud based contact centers in the public deployment model due to the low cost of operations. They provide maintenance services as a part of their offering, which is another key factor to drive the adoption of public deployment.
Private cloud-based deployments are estimated to exhibit sufficient growth as they gain popularity due to their advantageous features such as improved level of security, customization, efficiency, and control. Several vendors have started adopting private cloud deployments to host their services privately within the corporate firewalls. The capability to address security concerns is one of the crucial factors driving the private cloud deployment demand. Hybrid cloud combines the benefits of both public and private cloud infrastructures. It offers a flexible and agile environment to cloud contact centers. Hybrid deployment bridges the gap between systems to enable cloud benefits without replacing what might already exist. Thus, the hybrid cloud deployment is anticipated to hold a significant market share.
Large Enterprises to Capture Major Market Share Owing to Early Technology Adoption
The market has been segmented into large enterprises and small & medium enterprises (SMEs) based on the organization size. Large enterprises are likely to capture maximum market share as most of them are early adopters of advent technologies. The reduction in capital and operational expenditure and large customer base are other major factors supporting the segment growth. In addition, the rising trend of remote working or distant workforce is projected to support the adoption.
Small and medium-sized enterprises are anticipated to showcase significant growth due to flexible and cost-effective solution choices. Several small and medium-sized enterprises have started deploying cloud-based deployments to scale their business operations. The ambitious goals of small and medium-sized enterprises toward enhancing efficiency, productivity, reporting features, and customer service management are expected to promote the market growth in the coming years.
BFSI Industry to Hold Significant Market Share Owing to Digitization of Operations
By vertical analysis, the market has been classified into BFSI, IT and telecom, ITES, consumer goods and retail, government, travel and hospitality, healthcare, media and entertainment, and others. The BFSI segment is likely to hold maximum market share, followed by the ITES segment. Digitization is encouraging banks and financial institutions to optimize their operations by making facilities convenient for their customers. These institutes are increasingly shifting toward cloud communication platforms to automate, engage, and empower their customers. The capability of the cloud contact center to uplift the customer’s service drives its adoption across the banking and financial sector. In addition, the IT-enabled services are driving the demand as they depend on the teleworking or remote service mode. ITES services are heavily adopting cloud-native contact center solutions to optimize customer interactions.
A large customer base of IT and telecommunication providers encourages organizations to deploy cloud-based contact center features for enhancing customer engagement and experience. Digitization across the healthcare and government industries Along with this, the growing demand for instant and 24/7 customer service is likely to drive the adoption of cloud contact centers across these industries. Similarly, consumer goods and retail, travel, hospitality, and media and entertainment industries are also driving the adoption of such contact centers.
North America Cloud Based Contact Center Market Size, 2019 (USD Billion)
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Geographically, the market is studied for five major regions, North America, South America, Europe, Middle East & Africa, and Asia Pacific.
North America was dominating the global market with USD 3.60 billion revenue in 2019. This dominant growth of the market has been attributed to the presence of innovative and influential vendors, such as Oracle Corporation, Microsoft Corporation, and Cisco Systems, Inc., across the region. Rising investments of these key vendors in research and development activities are accelerating the global market growth. Organizations are increasingly migrating their business operations to the cloud, which is another key factor supporting North America's market lead. In addition, the rising trend of remote working further bolsters the cloud based contact center adoption.
South America is expected to showcase momentous growth due to the increasing spending on the innovation accelerator platforms. For instance, according to the 'IDC FutureScape: Latin America IT Industry 2019 Predictions Report', published in December 2018, 24.5% growth in the cloud ICT spending has been recorded in Latin America. Significant spending on cloud technology will accelerate market growth across South America.
Europe is expected to hold a significant share in the global market as the region is leading in the adoption of advanced cloud-based services. Contact center outsourcing is a key factor driving the migration of organizations to cloud-based solutions. The increasing number of cloud-native providers is likely to accelerate the market growth across Europe in the coming years.
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Asia-Pacific is anticipating to exhibit substantial growth in the cloud based contact center market owing to the significant adoption of cloud-based solutions. The ongoing digitization across the region drives a shift toward the cloud contact center model. New entrants in the cloud contact center market, specifically in Australia, are driving more established traditional on-premises players to aggressively roll out cloud-based solutions. Thus, Asia Pacific is projected to illustrate noticeable growth in the cloud contact center market during the forecast period.
With sufficient technology developments, the Middle East and Africa is expected to showcase steady growth in the cloud contact center market.
Partnerships, Collaborations, and Featured Product Launch are the Key Strategies Adopted by Vendors to Sustain their Market Competence
Key vendors in the global market are persistently focusing on developing their existing products and service portfolio. New product and solution launch is another way for organizations to sustain their business competence. Vendors are developing technology-driven, customer-centric, unique solutions to enhance contact center operations and efficiency. For instance, In June 2019, 8X8, Inc. launched a new holistic cloud based contact center solution. Besides, strategic partnerships and collaboration help key players to expand their product and business portfolio. Several key vendors collaborate to launch personalized, omnichannel, and intuitive cloud-based solutions by keeping the consumer and contact center agent needs in mind. For instance, in May 2020, NICE Ltd. announced the integration of its NICE inContact CXone solution with Microsoft Corporation's patented Microsoft Teams platform to enhance contact center efficiency and personalization. Similarly, in May 2020, NICE Ltd teamed-up with Zendesk, Inc. to support remote contact center operations.
An Infographic Representation of Cloud Based Contact Center Market
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The cloud based contact center market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading Deployments of the product. Besides this, the report offers insights into the cloud based contact center market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced Market over the recent years.
Value (USD billion)
Component; Deployment; Organization Size, and Vertical and Region
By Organization Size
Fortune Business Insights says that the global market size was USD 11.01 billion in 2019 and is projected to reach USD 56.37 billion by 2027.
In 2019, the North America market value stood at USD 3.60 billion.
Expanding at a CAGR of 22.7%, the market will exhibit steady growth in the forecast period (2020-2027).
The solution segment is the leading segment in this market.
Artificial Intelligence is cultivating new growth opportunities for the market.
Oracle Corporation, Microsoft Corporation, 8X8, Inc, Cisco Systems, Inc, and others are major players of the global market.
North America dominated the market share in 2019.
Asia Pacific is expected to be the fastest-growing region during the forecast period.
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