A lot of factors drive the move from on-premises to multi-tenant, cloud-based contact centers, from aging infrastructure to smaller, nimbler business operations.
Generative AI has dominated the headlines in 2023, but at the core of all contact experience operations remains the contact center platform. The contact center platform market has been undergoing a transition from dedicated platforms that are owned and operated by businesses themselves to multi-tenant (also known as contact center as a service (CCaaS)), or dedicated cloud-based services.
CCaaS holds the promise for revenue growth as organizations migrate to the cloud. However, a measurable number of companies will stay with their on-premises platforms for the foreseeable future. Both cloud and on-premises platforms have their advantages, depending on the customer’s goals and existing infrastructure. Some companies simply use a hybrid approach and have adopted a secondary architecture (i.e., on-premises at the headquarters, and cloud for remote or home workers).
In Metrigy’s Customer Experience MetriCast 2023 market forecast study of roughly 1,700 business worldwide, 32% of businesses utilizing a contact center platform are doing so with CCaaS, 42% with platforms owned and managed by business residing either on-premises or in the cloud, and another 21% using custom built platforms that are hosted and managed by third parties. This matches up with the counts from vendors on installed base of agent seats between CCaaS and company-owned platforms.
Pricing models have evolved over time, with vendors offering subscription-based models versus the traditional capex, one-time payment. However, one-time payment with annual maintenance contracts is still the most commonly used option. Forty-seven percent of businesses using contact center platforms use a capex model, purchasing systems and perpetual licenses and then paying annual maintenance contracts. This is in-line with 42% of businesses that utilize dedicated third-party platforms on-premises or in a cloud environment. Maintenance and support cost is typically 15-20% of the original purchase price, paid annually. Maintenance costs for older platforms have gone up as parts become harder to obtain.
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