Adoption of Full-Suite Cloud Solutions Can Reduce Costs and Integration Complexity for Small and Mid-Sized Businesses

Cloud solution providers must enhance product capabilities to meet growing need for omni-channel customer engagement, finds Frost & Sullivan

Dec 15, 2015, 09:15 ET from Frost & Sullivan

MOUNTAIN VIEW, Calif., Dec. 15, 2015 /PRNewswire/ -- The total revenues from hosted/cloud contact center solutions in North America have already surpassed on-premises product revenue in terms of annual spend. Yet, in terms of installed base penetration, on-premises contact center systems still have an edge over hosted solutions, which translates to a huge opportunity for the latter's market growth.

The demand for best-of-breed cloud applications will be particularly strong in the mid- to large-sized enterprise market where companies will look to source new and add-on capabilities as cloud services, while retaining some of their core systems on-premises.

New analysis from Frost & Sullivan, North America Hosted/Cloud Contact Center Market (, finds that the market earned revenues of $2.17 billion in 2014 and expects it to reach $3.66 billion by 2019. The hosted/cloud model, comprising best-of-breed and full-suite interactive voice response (IVR), automatic call distributor (ACD), chat, outbound, and agent performance optimization (APO) applications, has emerged as the preferred deployment model for contact center applications. While hosted IVR will continue to have the largest revenue share in this market through the forecast period, hosted ACD, hosted chat and hosted APO will have much higher growth rates.

If you are interested in more information on this study, please send an email to Clarissa Castaneda, Corporate Communications, at

"Small- and mid-sized contact center organizations are showing a marked preference for full-suite cloud contact center solutions to reduce costs and integration complexity as they move more applications to the cloud," said Frost & Sullivan Contact Centers Principal Analyst Nancy Jamison. "However, with more than 60 providers offering a range of best-of-breed, suite and point solutions, customers often feel overwhelmed by the profusion of choices."

Meanwhile, the cost and complexity of managing hybrid (premises and cloud) infrastructure remains a challenge for most companies. Therefore, integrating newer contact channels such as mobile contact, chat and social media, and enabling omni-channel customer experience strategies will go a long way in convincing companies to upgrade to newer contact center solutions.

"Leading on-premises product vendors continue to expand their hosted/cloud offerings, both directly and through channel partners, to avoid customer loss to pure-play hosted/cloud solution providers," noted Frost & Sullivan Contact Centers Research Analyst Brendan Read. "At the same time, contact center BPO providers are expanding their cloud offerings, as their customers are seeking technology-enabled solutions as part of their BPO services."

Overall, owing to the intensifying competition among pure-play cloud providers for mindshare and the challenge mounted by premises vendors, telcos and outsourcers have step up their marketing and sales efforts to remain competitive in this market.

North America Hosted/Cloud Contact Center Market is part of the Customer Contact ( Growth Partnership Service program. Frost & Sullivan's related studies include: 2015 Europe Contact Center Outsourcing Buyer's Guide, North America Contact Center Systems Market, Boosting Small Midsized Businesses Email Marketing Effectiveness, Enhancing Customer Relationship Management (CRM) for Small Midsized Businesses and Enabling Successful eCommerce for Small Midsized Businesses. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

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North America Hosted/Cloud Contact Center Market

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SOURCE Frost & Sullivan