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Consolidation in the Call Center Software Market
[July 15, 2005]

Consolidation in the Call Center Software Market

Company mergers, workforce optimization, interoperability and other trends might seem to be reducing the options for buyers of call center products.

By Tracey Schelmetic
Editorial Director, CUSTOMER INTER@CTION Solutions

Unless you’ve been too distracted lately in your breathless anticipation of the next Harry Potter book, you’ll have noticed that the call center software market appears to be shrinking faster than Karl Rove’s career opportunities. What we’re seeing is analogous to a hundred drops of mercury slowly but surely merging into a few large blobs. The Concerto/Aspect merger eclipsed the not-so-long ago Witness/Blue Pumpkin merger (not to be confused with the acquisition of Eyretel by Witness.) Then, there’s the still-fairly-recent merger of etalk and Autonomy. Those of us who tend to be slow on the uptake are still digesting the Concerto takeover of Rockwell FirstPoint Contact back in September. Then, of course, there are rumors about that company that begins with an “S”, has six letters and ends with a sound like “uhl.”

Hand-in-hand with, or maybe as a result of, the mergers of companies offering complementary call center software is the debut of “workforce optimization,” a mélange of workforce management, e-learning, call recording and monitoring, performance management, quality management and customer feedback systems. Some of these mergers have organically caused the rise of workforce optimization.

Maybe this “merger fever” sounds familiar. It should. Here’s an article written by Rich Tehrani back in 1998 called “Merger Fever: For Better Or Worse” ( ). In that article, Rich wondered whether the circa 1998 mergers of smaller companies into larger companies were good for the marketplace. Product interoperability at that time was practically non-existent, so when companies combined products, this was either a good thing (if you were interested in using both products) or a bad thing (if you wanted only one of the products).

Nowadays, most call center software products seem to be touted as working well with all other call center products. (In reality, this seamless interoperability may be a tad more imperfect than the brochures lead us to believe.)

The lesson we can take from reading Rich’s 1998 article is that we’ve been in this position before. You don’t have to go very far backwards in time to remember when there were no complete call-center-in-a-box products. Everything was free-standing: your ACD, your IVR, your dialer, your e-mail management, your multiple databases. “Interoperability” meant that it took less than 18 months to integrate — sort of — any two of these products together.

At the same time as these more traditional companies are merging their functionalities together, we’re seeing the rise in much more flexible call center processes…hosted and even open-source solutions. These kinds of products have been a godsend to the SMB market…small call center organizations that could never hope to be able to purchase from Siebel, PeopleSoft or any of the other behemoths. Incidentally, the SMB market (which can be defined as anything under 100 seats, or even under 50 seats, depending on whom you talk to) is growing fast…at faster rates than the huge enterprise customer contact organizations.

So does it make sense to create more behemoths?

Let’s hope that today’s behemoths are a different breed of giant company. Product modularity seems to be the norm nowadays, allowing companies to pick and choose which component they want, delivered however they want: premise-based, hosted, or some combination in-between. As always new products and product categories will emerge, expanding the call center software market back outward again, only to have it contract again within another five to seven years.

‘Tis the way of the universe.


Tracey Schelmetic is editorial director for CUSTOMER INTER@CTION Solutions. For more articles by Tracey Schelmetic, please visit:

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