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The Europe contact center as a service (CCaaS) market size was USD 670.9 million in 2019 and is projected to reach USD 2,249.0 million by 2027, exhibiting a CAGR of 16.4% during the forecast period.
Contact and call centers across Europe are replacing the traditional on-premise or hosted infrastructure, which favors the CCaaS deployment model. Growing preference for cloud-based contact center solutions is the prime factor that is driving the market’s growth across Europe. The migration of small and medium businesses towards cloud-based technologies is projected to fuel market growth during the forecast period. Advantageous factors such as quicker implementation, faster deployment, greater flexibility, increased security and scalability, cost-saving, easy management of remote agents, data visibility, and real-time customization are driving the adoption of cloud contact center solutions among large enterprises. Several European organizations have directed their vision towards developing complete, intelligent, and unified cloud contact center solutions that offer seamless omnichannel customer experiences. The growing popularity of service-driven data-center business models is further escalating the demand for contact center services.
Besides, the market is experiencing healthy growth owing to the increasing demand for multichannel, personalized, responsive, and adaptable customer services. Thus, the capability of the contact center software solutions to provide a superlative tool for improving customer experience and meeting customer requirements are driving market growth across Europe. Moreover, the developed framework of the European Contact Centre Standard (ECCS) to cover all the aspects of contact centers including infrastructure, contact center agents, processes, and developer platforms is also accelerating the market growth in the region.
COVID-19 Pandemic to Stimulate the Demand for Cloud-based CCaaS
The COVID-19 pandemic has severely affected almost every industry. From the business perspective, this pandemic has become one of the most challenging times the contact center software market has ever experienced. The contact center industry in the United Kingdom has become a major economic contributor, employing around 1.2 million people across the country. However, the COVID-19 crisis has triggered a sudden shift in its operating models, which has placed contact center providers under tremendous pressure. However, the adoption of the cloud model of these services is rising at an incredible pace.
The cloud-based CCaaS is becoming the preferred deployment model for contact centers across the region as it allows remote operational management. Contact center deployments have started to reach new heights as more businesses are continuing to recognize the worth of cloud customer interaction platforms. New and innovative technologies are creating new opportunities for cloud-based contact center services. For instance, artificial intelligence-based contact center solutions are witnessing excellent growth.
A cloud contact center platform offers a flexible and scalable environment for contact centers, which empowers them to enable remote working facilities for their agents. Service providers are increasingly migrating towards cloud contact center solutions to address the increased call volume during the COVID-19 pandemic. In May 2020, for example, a UK-based healthcare service provider has allowed about 2,000 contact center agents to work remotely from their homes using NICE Ltd-patented inContact CXone platform. Thus, the CCaaS market is likely to showcase satisfactory growth during the pandemic period.
Besides, the crisis has accelerated the need for AI-driven chatbots and contact center messaging services for handling customer interactions. The growing need to connect customers through diverse communication channels will also support the multichannel cloud contact center platform adoption.
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Increasing Use of Artificial Intelligence (AI) for Automating Contact Center Operations to Stimulate Market Growth
Contact center solution providers are introducing advanced technological solutions that automate the operations of contact centers. AI technology is augmenting CCaaS performance by helping agents to be more productive during their interaction with customers. Also, AI chatbots assist in handling customer queries in the absence of a human representative. AI tools are also helping agents during their call time to improve customer experience by offering real-time assistance.
AI-powered CCaas platforms can offer dynamic routing, improved decision making, and real-time actionable insights. AI-based technologies play a significant role in the orchestration and automation of contact center operations, which is enticing organizations to deploy AI in their CCaaS platforms. For example, in March 2019, Thrio, Inc. launched an AI-driven contact center service platform to create multi-step, multi-channel customer journeys.
Rising Demand from SMEs for Cloud-based Services to Drive Growth
Small and medium enterprises (SMEs) are a crucial part of the European economy, providing employment to a large number of people. The rapid digitalization of businesses is encouraging organizations to adopt advanced technologies such as cloud computing, artificial intelligence, big data, and many more. According to the ‘European SMEs Survey – 2019’, 48% of European SMEs are using cloud computing technology, while 26% of organizations are planning to deploy cloud models in the next couple of years. Cloud computing as a service model offers a robust, flexible, and scalable business environment to SMEs. Thus, the growing adoption of cloud-based services is likely to drive the CCaaS market growth during the forecast period.
Further, low investment needs and the simplicity of CCaaS is likely to aid the Europe contact center as a service market through the broader adoption by SMEs. Thus, the rapid expansion of cloud contact center services into the European SME market is creating unique opportunities for CCaaS providers.
Rapid Shift from In-house Contact Centers to Outsourcing Services to Stimulate Growth
European companies are rapidly shifting from in-house contact center solutions to the outsourcing of contact center services. Start-up firms and small businesses prefer to outsource customer relationship management (CRM) and customer experience (CX) services instead of investing in equipment or staff. Contact center software is experiencing massive demand due to this outsourcing from various areas such as IT services, back-office processes, and front office support.
The shift to hybrid IT and multi-cloud data centers is likely to boost the spending on cloud hosting infrastructure services. These factors are likely to drive cloud contact center services across the region. Also, outsourcing is becoming standard practice in the corporate world in Western Europe. According to a survey conducted by IDC in September 2018, 23% of the companies in Western Europe have outsourced all of their IT operations, while 66% have outsourced some of their IT operations, and only 11% of companies said they do not outsource. Thus, the rapid shifting of European businesses towards outsourcing is supporting the growth of the Europe CCaaS market.
Compatibility Issues Related to Integration with Traditional Systems to Limit CCaaS Adoption
Rapid technological advancements have modernized contact centers in recent years. However, it is crucial to integrate contact center software solutions with the existing legacy systems. European organizations are still spending more to maintain their legacy system. For instance, as per financial News, in London, banks utilize around 80% of their IT budget to maintain legacy technology, and about USD 300 million is spent each year for managing and maintaining these systems. There could be some major defects in the existing legacy systems such as deficiency of well-defined documentation and interface. As the legacy systems sometimes showcase a lack of compatible interfaces, the probability of errors owing to inadequate or incorrect data is high with such integrations.
Besides, traditional systems may not always be well-matched with third-party software, which may cause even more errors. End-users are hesitating while moving their traditional legacy systems to advanced solutions owing to the fear of data loss. To avoid system discrepancy and financial overheads, several end-users prefer to use traditional legacy systems instead of migrating to new technologies. Thus, the difficulties associated with integrating new technologies in existing legacy systems may affect the widespread adoption of CCaaS.
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Large Adoption of Speech-enabled Self-service Applications to Drive Growth
Based on function, the market is divided into interactive voice response (IVR), multichannel, automatic call distribution, computer telephony integration (CTI), reporting and analytics, workforce optimization, customer collaboration, and others. Among these, the interactive voice response (IVR) segment is likely to hold major market share owing to the rising demand for automated telephony systems across Europe.
IVR helps businesses to reduce operational costs and improve efficiency and is hence trending in the CCaaS market. The trend of automated or people-assisted services is driving the implementation of interactive voice response-based contact center services. The increasing popularity of the contact center interaction services is being supported by the development of voice portals that offer speech-enabled self-service applications.
The multichannel functionality of contact center services is gaining much popularity across all industries as they enable the delivery of international support. Adding multichannel functionality helps organizations to drive customer satisfaction by making enterprises more accessible to them. The multichannel facility also allows customers to contact in ways that they want to, which optimizes customer interactions and overall operations of the contact centers. Thus, the multichannel support function in CCaaS solutions is also driving product adoption.
Automatic call distribution is another vital feature of any contact center as a service solution as it offers uninterrupted voice telephony services by routing calls to the right agent. Another feature of the CCaaS platform is computer telephony integration (CTI) that allows integration of a phone system with computer programs such as a customer relationship management (CRM) platform. This integration helps companies in boosting agent performance and efficiency, cutting down call-handling time and maximizing customer experience. Apart from this, reporting and analytics, workforce optimization, and customer collaboration are some other functions associated with CCaaS.
Growing Awareness about Customer-Centric Service Models to Enhance Adoption across SMEs
By organization size, the market is segmented into large enterprises and small & medium enterprises (SMEs). Among these, the large enterprises segment is currently holding the major market share owing to their early adoption of cloud computing services. The increasing need to effectively manage customer data across local and overseas offices is the prime factor that drives CCaaS adoption across large enterprises. Also, the ability to reduce capital and operational expenditures and serve a broader set of customers is another factor supporting segmental growth.
The small & medium enterprises segment is likely to record the maximum growth rate during the forecast period. The increasing deployment of cloud-based solutions is expected to augment the adoption of contact center services across SMEs. The ambitious goals of SMEs to enhance efficiency, productivity, reporting features, and customer service management are estimated to promote market growth. Thus, growing awareness about customer-driven service models across SMEs is propelling the growth of the market.
IT & Telecom Industry Migration towards Cloud-based Technologies to Drive CCaaS Adoption
Based on industry, the market is categorized into banking, financial services, and insurance (BFSI), IT & telecommunications, government, healthcare, consumer goods & retail, travel & hospitality, media & entertainment, and others.
The European banking sector is becoming digital with the growing adoption of cloud-based services. Banks across the region are becoming supportive of the rising investments in cloud-based platforms and infrastructures to modernize their existing legacy systems cost-effectively. Thus, the substantial adoption of cloud-based services across the banking industry is driving the CCaaS market growth. Besides, a globally expanding customer base is creating a need for high-level customer interaction platforms across the banking and finance industry, which is further escalating the demand for CCaaS platforms. In October 2020, NICE Ltd. partnered with Alfa-Bank Russia to install the NICE real-time authentication (RTA) solution to enable instantaneous, seamless verification of contact center customers. The solution enables a bank to authenticate the identity of customers contacting the contact center in real-time.
The IT & telecommunications industry segment is expected to record significant growth owing to the increasing demand for flexible and cost-effective customer relationship management solutions. The trend of multichannel communications through a single cloud-based solution is escalating the adoption of unified communication and contact center software platforms. The IT and telecom industry's aim to enhance customer interactions is also leading to booming market growth.
The healthcare industry is generating the most opportunities in the market. Automated communication is helping service providers to achieve better patient engagement. Modern CCaaS platforms are more responsive to the administrative, financial, and clinical requirements of hospitals. They also provide multi-channel inbound and outbound communications that offer reliable, personalized support to keep patients informed, safe, and engaged. Thus, cloud contact center services are gaining traction across the healthcare industry.
Several governments are adopting various digital solutions to augment government-operated service centers. The governments in European countries are taking constant efforts to develop superior communication platforms for enhancing their public sector customer care services. Hence, the government segment is likely to exhibit noticeable growth in the coming years.
Moreover, CCaaS solutions are experiencing huge demand from the consumer goods and retail industries. The growing necessity to ensure customer satisfaction and to overcome the hurdles involved in the consumer retaining process is the prime factor driving the demand for CCaaS across the retail industry.
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Europe is expected to dominate the global contact center as a service market share owing to the growing preference for outsourcing of IT services. The increasing trend of web-based contact centers is making outsourcing easier for small and medium enterprises by introducing a Pay-for-use pricing model. Minimal maintenance and reduced cost infrastructure are other vital aspects that are driving the adoption of cloud-based contact center platforms across SMEs in Europe. The rising usage of AI in contact centers is also supporting the self-service model of these systems.
The Nordic countries (Sweden, Finland, Norway, and Denmark) are encouragingly open to the outsourcing of services. Many companies across these countries are developing punctual, service-oriented business models, which are expected to escalate the demand for contact center services. These factors are likely to drive the CCaaS market growth across Europe.
The German and French companies prefer to do business in their native languages. Hence, linguistic contact center services are expected to grow across France and Germany. The traditional business relationships with various countries and the cost-saving business culture are creating a huge demand for offshore outsourcing of businesses across the United Kingdom. However, the forthcoming exit of the UK from the European Union has made local businesses more careful about their outsourcing decisions. Thus, presently, the UK is holding a significant share in the market but it is likely to witness slow growth during the forecast period.
Launch of Custom-Driven Services and Strategic Partnerships to Intensify Competition
The highly competitive landscape of the European contact center as a service market is encouraging key players to adopt various business strategies to strengthen their market position. The prominent players are focusing on broadening their existing customer and infrastructure network by diversifying their product portfolios. Embedding innovative technologies such as AI or machine learning into their contact center platforms is helping these companies to develop self-service models. Apart from this, strategic partnerships, mergers, and acquisitions are helping CCaaS providers to expand their service portfolio across Europe. In December 2019, for instance, Puzzel AS acquired Scotland-based Logicalware Ltd to expand its contact center as a service business portfolio across the UK.
An Infographic Representation of Europe Contact Center as a Service (CCaaS) Market
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The Europe contact center as a service market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading companies of the market. Besides this, the report offers insights into the current 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 recent years.
Value (USD million)
Function; Organization Size; Industry, and Country
By Organization Size
Fortune Business Insights says that the Europe market size was USD 670.9 million in 2019 and is projected to reach USD 2,249.0 million by 2027.
In 2019, the United Kingdom market value stood at USD 170.0 million.
Growing at a CAGR of 16.4%, the market will exhibit promising growth in the forecast period (2020-2027).
The large enterprises segment is the leading segment in this market.
Rapid shift from in-house contact centers to outsourcing of services is the key market driver.
8x8 Inc., Akio, CONTENT GURU LIMITED, NICE Ltd., Genesys Telecommunications Laboratories, Inc., and Orange Business Services are some of the major players in the Europe market.
The United Kingdom dominated the market share in 2019.
The rising demand from SMEs for cloud-based services is expected to drive the adoption of CCaaS systems.
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