Contact Center as a Service (CCaaS) Market Size, Share & COVID-19 Impact Analysis, By Function (Interactive Voice Response (IVR), Multichannel, Automatic Call Distribution, Computer Telephony Integration (CTI), Reporting and Analytics, and Others), By Enterprise Size (Large Enterprises and Small & Medium Enterprises), By Industry (BFSI, IT and Telecommunications, Government, Healthcare, Consumer Goods & Retail ), and Regional Forecast, 2020-2027

The global contact center as a service (CCaaS) market size was USD 3.07 billion in 2019 and is projected to reach USD 10.06 billion by 2027, exhibiting a CAGR of 16.1% during the forecast period.  

The rising competition to retain customers is driving the adoption of the contact center as a service. The cloud-based services offer tools and solutions that would support the agents while dealing with customers. It helps in providing real-time assistance to boost customer handling skills. The small and medium enterprises (SMEs) are vastly adopting the service owing to its advanced customer service capabilities. The feature-rich services are supporting enterprises to efficiently handle all customer issues. To provide excellent customer experiences, industries such as healthcare, consumer goods, retail, and BFSI are focusing on the implementation of cloud-based contact center solutions.

COVID Impact

COVID-19 Pandemic will Surge Usage Owing to Smooth Customer Consultation Online

The CCaaS offers remote location working capabilities that are likely to drive its demand during the COVID-19 pandemic. As enterprises and industries need to maintain social distancing and other parameters, cloud-based solutions are expected to offer various advantages. Companies are highly adopting such solutions and are encouraging work from home policies to maintain the customer experience in this challenging time. Also, the increasing adoption of online purchases and transactions during the crisis would surge the need for implementing cloud-based customer service solutions.

Furthermore, the pandemic has boosted the demand for online retailing. Retailers are facing challenges in timely services owing to the shortage of transportation and logistics. The demand for CCaaS services has increased amid the pandemic, owing to the continuous flow of customer inquiry. This is likely to drive the market during the COVID-19 crisis.

During the pandemic, several vendors have started offering novel solutions to support the industries.

• For instance, Cisco Systems Inc. offered 90 days free of charge Webex Contact Center for healthcare officials.


• In another case, Avaya supported 300,000 agents to transfer from traditional to digital service to provide work from home solutions.

Similarly, companies such as Salesforce Inc, Nice Ltd., and Five9 are supporting firms to shift to cloud-based contact center services during the COVID-19 pandemic.  

LATEST TRENDS

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Emergence of Artificial Intelligence-enabled Interactive Voice Response is a New Trend

Interactive Voice Response (IVR) is an integral part of the contact center as a service. The integration of artificial intelligence (AI) capabilities with IVR is likely to boost its demand. The intelligent IVR offers support and assists the agent while handling queries. It can judge the mood and tone of the customer accurately with AI’s speech recognition software. This helps the service provider to handle clients properly.

• For instance, FedEx upgraded its IVR system to provide humanized communication service over IVR. Through the IVR system, customers can convey their message by speaking, and the systems provide assistance without agent support. Thus, the company reduced 11,000 per day live calls of live agents with just 6% of automation.

Similarly, IVR’s self-service solutions are trending in the market. Numerous companies are highly adopting smart self-service solutions as they provide extra time and information beforehand to the company agents. AI capabilities such as speech analytics and natural language processing help the self-serve tool to recognize the content and provide information based on it. This reduces the waiting time of the client. Also, when the customer is engaged with the IVR systems, the smart bot briefs the entire communication and other related information to the agents. This is likely to boost the market growth in the near future.

DRIVING FACTORS

Increasing Need to Improve Customer Experience Will Drive Growth

Enterprises need to maintain customer experience by providing accurate and timely feedback. The future business of enterprises largely depends on customer satisfaction. The contact center as a service offers solutions that help to provide suitable customer service. The service supports the agents to efficiently handle customers by providing real-time customer-query related data. It provides pop-up information about the customers and their purchase history. This helps in saving the agent's time and quickly resolving the customer's issue.

• For instance, PayPal uses Genesys Engage CCaaS product for its 8500 agents to support more than 170 million consumers and 13 million merchants across various countries. It helped the company to provide a next-level customer experience. The system can be customized as per the need of the business.

Today, customers can reach the service providers through various channels such as emails, SMS, social media platforms, and others. It has become important for enterprises to deliver their customer services across all channels. The service provides multichannel capabilities that help companies to offer solutions on the customer’s preferred communication channel.

• For instance, Bosch Service Solutions integrated the cloud-based services to reach its client across channels such as calls, SMS, emails, social media, and more.

Thus, a need to provide better customer satisfaction across all the channels is likely to drive the CCaaS market growth.

Benefits of Flexibility, Scalability, and Lower Cost to Propel Growth

The cloud-based contact centers cost much less than the traditional on-premises contact centers. With the implementation of the contact center as a service, companies are saving on the overall expenses of hardware installation and maintenance service charges. It also does not require any expenditure related to IT components and servers. Besides, cloud-based services help in reducing overhead investments and decrease downtime & minimum power consumption. It also provides pay as per the subscription model, which helps companies to select the model as per their need and pricing. Companies with limited funds are now investing in web-based contact centers. This is further boosting the adoption of systems in small and medium enterprises.

It is flexible in deployment and offers faster implementation. Vendors are delivering implementation support that helps in smooth installation and saves time. The services can be adjusted as per the changing needs of the organization. For instance, if the company is exhibiting rapid growth in inbound call volume, it can add seats and agents within the least time. Also, they can offer remote working for the agents whenever required. This is likely to drive the contact center as a service market growth.

RESTRAINING FACTORS

Rising Concerns of Data Security Issues May Hinder Growth

The CCaaS has vast data volume that is at high risk of malicious attackers. Contact centers store personal and confidential information including health information and payment card numbers. The risk of data breaches and hacking can be high internally and externally. For instance, internally, the agent can leak or could get bribed for sharing the information. This can create a high risk of privacy issues. For instance, in 2017, the U.S.-based insurance company LaunchPoint faced a data breach, where the company’s employee took client healthcare information over his personal email.

Similarly, cloud computing is facing external security challenges owing to the integration of networks, databases, operating systems, virtualization, transaction management, and others. For instance, virtualization and memory management algorithms in cloud-based services can create several security concerns. This is likely to hamper the contact center as a service market growth.

SEGMENTATION

By Function Analysis

Interactive Voice Response Segment to Dominate Backed by Integration of Unique Technologies

Based on function, the contact center as a service market is categorized as interactive voice response (IVR), multichannel, automatic call distribution, computer telephony integration (CTI), reporting & analytics, workforce optimization, customer collaboration, and others. The workforce optimization segment is likely to gain traction owing to its ability to provide a better customer experience by offering support to the agents. Increasing agent population in CCaaS is also boosting the requirement for workforce optimization functions.

The IVR segment is expected to gain the maximum market share. It is showcasing high adoption from the contact center market. The integration of AI with IVR has further boosted its application in cloud-based services. The integration of advanced features in IVR to recognize the tone and behavioral mode of clients will alert the customer service agents. This is driving the interactive voice response segment.

The customer collaboration segment is likely to exhibit rapid growth owing to the increasing focus of enterprises on providing enhanced customer satisfaction by promptly attending and solving their issues.  The increasing customer communication across all the channels of social media and others is driving the demand for multichannel CCaaS.

By Enterprise Size Analysis

Small & Medium Enterprises Segment to Lead Stoked by Rising Usage of CCaaS

Based on enterprise size, the contact center as a service market is segmented into small & medium enterprises (SMEs) and large enterprises. The contact center as a service was developed to cater to small enterprises. The low cost of investment and convenient service delivery is boosting its adoption across these enterprises. Also, the lack of on-board IT staff and customer service representatives in small businesses is driving its demand. Similarly, the pay-per-use service option is convenient for small and medium businesses. Technological advancement is driving the demand for CCaaS across large enterprises. This service is helping large enterprises in providing better customer experience and a reduction in operational costs.

By Industry Analysis

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BFSI Segment to Grow Rapidly Fueled by Increasing Customer Interactions

Based on industry, the market is fragmented into BFSI, IT and telecommunications, government, healthcare, consumer goods and retail, travel and hospitality, media and entertainment, and others. With the maximum remote client and customer base, the IT and telecom segment is likely to gain the maximum market share.

The BFSI industry is showcasing an increasing amount of customer interaction due to digitization. Customers are reaching the banking institutes through various channels. This is driving the adoption of cloud-based customer service systems. The services are helping the BFSI industry to build strong customer relationships. For instance, according to the AI-based call tracking company Invoca, 75% of customers consult more than one bank. Thus, cloud-based services are also offering provisions to gain new customers before they shift to other banks, thereby driving the segment.

Similarly, the rising usage of online channels to purchase consumer goods is boosting the demand for such services. Small and medium retail enterprises are keen on providing a better purchasing experience for their customers. This is likely to boost customer assistance services using CCaaS.

The healthcare industry is also experiencing steady growth in the market. The increasing competition and demand for better customer services are driving the growth of the healthcare industry. Also, the rising adoption of telehealth solutions is further boosting the growth of this segment. The boom in industries such as travel & hospitality and entertainment is expected to boost the demand for customer service solutions.

REGIONAL INSIGHTS

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North America is expected to gain the maximum contact center as a service market share. According to Gartner, many organizations in this region are shifting to cloud-based services. The significant presence of cloud computing enterprises is driving the development of various technologies. The U.S. is likely to gain traction owing to the huge population inclining towards multichannel communication. Also, the increasing number of small and medium enterprises in the country is set to boost demand.

Europe ranks second in the market. The enterprises focusing on gaining a vast customer base are boosting the market growth in this region. The U.K., Germany, and France are leading the market. Germany is a growing service-based economy. According to the 2018 report of the Federal Statistical Office of Germany, the domestic service sector comprises 69% of Germany’s total GDP. The industries and SMEs are focused on customer-centric services.

Asia Pacific is expected to grow rapidly during the forecast period. The region is experiencing an increasing adoption of CCaaS owing to the high scalability. Emerging economies are focusing on retaining and gaining new customers. The increasing industrial development and expansion are further driving the market growth in the region. China is growing significantly owing to the increasing adoption of financial and e-commerce services. Besides, Japan would show high potential in the adoption of CCaaS. This is likely to drive the market in Asia Pacific.

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Latin America is steadily adopting contact centers as a service solution. Companies are significantly investing in the Middle East & Africa to expand their global presence. For instance, by the end of 2020, Avaya IX-CC services will be available for enterprises operating in Abu Dhabi and Dubai on Microsoft Azure.

KEY INDUSTRY PLAYERS

Key Companies to Focus on Integrating Novel Technologies with Cloud-based Services

Nice Ltd. is focusing on offering customer services to enterprises. It aims to enhance customer experience and reach the target audience from all the available channels with its services. The company is investing in the development of omnichannel solutions for enterprises across industries such as healthcare, BFSI, and IT and telecommunication among others.

The other key companies such as Genesys, Five9, 8x8, Inc., 3CLogic, and Cisco Systems Inc. are advancing to provide better agent assistance services and solutions. They are trying to integrate advanced technologies, such as artificial intelligence, automation, and natural language processing with cloud-based services. This is expected to boost the demand for contact centers as a service.

October 2019 – Nice Ltd. launched its first digital omnichannel named NICE inContact CXone. The company is supporting enterprises to reach out to their customers via all the available channels using its CXone omnichannel services.

March 2020 – Nice Ltd. partnered up with Zendesk to provide an efficient and personalized customer experience. The partnership will offer integrated solutions to reach its customers with both their expertise.

LIST OF KEY COMPANIES PROFILED: 

• Cisco Systems, Inc (California, United States)


• Genesys (California, United States)


• Five9 (California, United States)


• 8x8, Inc. (California, United States)


• NICE Ltd. (Ra'anana, Israel)


• 3CLogic (Maryland, United States)


• Oracle Corporation (California, United States)


• Avaya Inc. (California, United States)


• Mitel Networks Corporation (Ottawa, Canada)


• Evolve IP, LLC. (Pennsylvania, United States)

KEY INDUSTRY DEVELOPMENTS:

• June 2019 – 8x8, Inc. launched a stand-alone cloud-based contact-center-as-a-service. It offers a customer experience based on a single platform. It also has a built-in customer relationship management support system.


• August 2020 – Evolve IP, LLC. in partnership with Microsoft Teams and Virtual Workspaces, is set to launch its omnichannel contact center services. The omnichannel Evolve Contact Suite can be accessed from any device. Agents and service providers can use Microsoft Teams’ capabilities to reach out to their clients. 

REPORT COVERAGE

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The market research report highlights leading regions across the world to offer a better understanding of the user. Furthermore, it provides insights into the latest industry trends and analyzes technologies that are being deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the readers to gain in-depth knowledge about the market.

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