Contact Center Infrastructure Magic Quadrant for EMEA, 2003

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1 Markets, T. Wright, S. Blood Research Note 16 July 2003 Contact Center Infrastructure Magic Quadrant for EMEA, 2003 Users demand contact center solutions that reflect business needs and technology strategies. The strain of meeting technology upgrade and service support demands affects vendor ratings on Gartner's Magic Quadrant. Core Topic Enterprise Networking: Voice Applications Key Issue How do enterprises select and implement communications solutions, and how must vendors position themselves to be successful? The 2003 Magic Quadrant for contact center infrastructure in Europe Middle East and Africa (EMEA) reflects the growing complexity and diversity of contact center infrastructure solutions (see Figure 1). Traditionally, call centers were purchased as telephony-centric resources, centralizing call response. Now, they are distributed, multichannel operations, integrated with customer relationship management (CRM) applications and increasingly outsourced. Gartner Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 Figure 1 Magic Quadrant for Contact Center Infrastructure: EMEA, 2003 Challengers Leaders Ability to Execute Philips Ericsson Enterprise Nortel Networks Cisco Systems Siemens Tenovis Apropos Concerto EADS Telecom InIn Avaya Alcatel Genesys Aspect Communications CosmoCom Altitude Software Rockwell FirstPoint Contact Wicom Communications As of July 2003 Niche Players Visionaries Completeness of Vision Philips: Philips Business Communications Concerto: Concerto Software Source: Gartner Research (July 2003) Vendors on the Magic Quadrant were evaluated against a common set of criteria. They were only included in the Magic Quadrant if they could support universal queue management, with sales and service operations in multiple geographic markets within EMEA. Vendors were rated highly for vision if they have a business migration strategy that includes support for managed service solutions (see "Contact Center Infrastructure Magic Quadrant Criteria, 2003," M ). Contact center investment priorities are affected by network upgrade and CRM business applications strategies. The best solutions are those that meet both requirements. Companies need to adjust their resources to meet transient business needs. Buyers are looking for contracts that offer flexible costing. The variety of product types and diversity of solutions available from vendors is increasing. Most vendors have introduced contact centers based on new IP infrastructure. These compete with traditional time division multiplexing (TDM) architectures. 16 July

3 The introduction of IP technology has forced many vendors to focus on installed base preservation in the short term. Vendors such as Avaya, Alcatel and Cisco Systems gain regular income from their large voice and data infrastructure businesses, and are stealing customers from retrenching competitors that lack their commercial clout, degree of ongoing investment in portfolio, channel development and marketing expenditure. Most vendors continue to introduce lower entry-price solutions, some with integrated entry-level gateways into lead CRM software products. Vendors are increasing the capacity of their solutions and adding new functions to support a new range of hosted service solutions provided by network service providers (NSPs). Most competitors are joining vendors such as Genesys and Aspect Communications in offering adjunct server and software suite products that can be used to expand or replace existing implementations. These offerings do not automatically include IP or TDM infrastructure, but can reuse TDM or IP infrastructure (see "Software Suites Will Dominate Europe's Call Center Market," TELC-WW-DP-0264) Some suppliers are responding to the need for more complex solutions, others are struggling. Too many vendors are competing to sell companies call routing infrastructure, so there will be further consolidation among vendors. Leaders Avaya continues to dominate the EMEA contact center market, through its MultiVantage and Interaction Center products. Interaction Center extends call center functionality to TDM or IP infrastructure supplied by other vendors. Avaya has strong channel support and professional services programs. It has developed relationships with systems integrators, service providers and CRM software companies. It is enhancing its brand as a preferred "business partner," not just a technology supplier. Avaya's alliance with Microsoft may help it develop a low-end product for small-to-midsize businesses and hosted services for NSPs. Alcatel strengthened its position by integrating Genesys with OmniPCX Enterprise to create a high-end, multichannel contact center solution. It still supplies and supports its products across Europe through its former services organization, NextiraOne. Alcatel now has a wide enough portfolio to compete with Avaya, but has not sold into as many multinational corporate accounts. To improve its position in the Leaders segment, Alcatel needs to develop its reputation as a "business partner" in key markets like 16 July

4 the United Kingdom, Germany, Italy and the Nordic region. It also needs to enhance its operational relationships with external service providers (ESPs) such as Accenture. Aspect Communications originally specialized in high-end call centers. It has repositioned itself as a switch-independent, contact center "middleware vendor. Its Contact Server product adds independent server and software capabilities to the infrastructure products of other vendors. It needs to develop indirect channels to secure revenue growth. Recent investment by Vista Equities gives Aspect more financial stability, but, to grow, the company must gain the respect of the NSPs, ESPs and system integrators (SIs) that support contact center solutions and related services. Genesys, as the lead adjunct server and software vendor, has developed strong computer-telephony integration capabilities. Its position on the "ability to execute" axis is curtailed by an inability to track the number and nature of user licenses. It has tightened its integration with Alcatel's OmniPCX Enterprise, but Genesys is not tied to Alcatel, which helps when working with solution providers. After it acquired Telera, Genesys extended its G6 suite to include scalable interactive voice response and voice portal capabilities. This lets NSPs offer a managed service solution comprising a bundle of intelligent network and networkbased contact center infrastructure services. Challengers Cisco Systems is the leading data networking vendor. It improved its IP contact center portfolio and reputation, despite residual concerns over platform resiliency and scalability. The company won contracts with early adopters of IP-based solutions, giving it large reference sites. Intelligent Contact Management v.5 tackled several areas that had been holding Cisco back. For example, universal queuing capabilities were strengthened. Cisco must prove it can integrate with leading CRM applications software. Its sales channels for high-end contact center solutions are weak. It needs to make better use of indirect channels to sell IP Contact Center services to large single sites and within networked solutions. Nortel Networks returned to profitability in 1Q03, but its rating has slipped because of the poor publicity. Competitors have penetrated key customer accounts and key channels to market. Nortel continues to advance its Symposium Call Center Server (SCCS) and lower-end Business Communications Manager products, but must demonstrate that it offers resilient, scalable and distributed solutions. Its CRM integration capabilities are limited to adapters for Siebel Systems products. Nortel must 16 July

5 incorporate support for third-party switches in SCCS. It cannot yet sell adjunct software into accounts that do not have Meridian infrastructure, nor can it address NSP platform requirements. Siemens struggles to compete against the lead contact center infrastructure vendors. Although its HiPath ProCenter is a strong contact center product, Siemens' reputation in this area is poor. It suffered from inadequate marketing, weak products under the Siemens name and delays in releasing products. The delays were so bad that the company had to resell its competitors' products. Its new strategy is based on the OpenScape suite. This extends contact management services to desktops throughout an enterprise. Siemens needs to deliver its vision and market its "own brand" portfolio to its target customers. Visionaries Altitude Software has continued to strengthen its position through indirect channel development. In the United Kingdom by far the largest single market in EMEA Altitude now has significant supply relationships with BT and leading independent value-added reseller Crane Telecommunications for its adjunct server and software product line. The product capability is strong, but if Altitude is to challenge the market leaders, large-scale references in more geographies are required. CosmoCom has strengthened its position as a visionary and is improving on its execution. BT Retail uses CosmoCom technology within its Contact Central product. CosmoCom is also building a reputation as a provider of large-scale infrastructure to NSPs notably BT, France Telecom and TeliaSonera that are beginning to promote network-based, hosted services. The company is also building brand credibility at the higher end of the corporate infrastructure market through new original equipment manufacturer (OEM) relationships with companies like Rockwell FirstPoint Contact (RFC). Overall, it is shipping more products and increasing its market share. Development of additional indirect channels to the enterprise market across the region will assist CosmoCom and bring longer-term brand stability and financial security. Rockwell FirstPoint Contact has many of the portfolio and vision ingredients to become a leader, but its business execution is weak. It lacks geographic focus and has not developed its sales channels. It relies on preserving its installed base, selling upgrades and expansion rather than new systems. The nonexclusive partnership with Damovo for sales outside the United Kingdom has had limited success and may now act to inhibit RFC's ability to sell its products to its target customers. It has an OEM relationship with CosmoCom that extends its 16 July

6 portfolio, but may risk conflict between their portfolios and brands. To sustain and increase its business in the long term, RFC must generate publicity for its new offerings for companies and service providers. It is critical to develop channels to deliver enterprise solutions. Wicom Communications is a relatively new entrant to EMEA. It offers IP-based, virtual contact center solutions. The company has an innovative approach for enterprise solutions. Its usagebased pricing models will appeal to ESPs, SIs and NSPs wanting to offer network-hosted or on-site managed service solutions. Wicom's ability to execute is limited by a lack of brand recognition and reference customers outside Scandinavia. It needs to establish a larger and more diverse business base that includes larger supply contracts with service providers. Niche Players Generally, vendors in the Niche Players quadrant focus on a particular functional, vertical or geographic segment of the market. Their strengths in these segments should not be overlooked in vendor selection. Apropos Technology, Concerto Software and Interactive Intelligence have all slipped from the Visionaries quadrant into the Niche Players quadrant, mainly because of inadequate marketing, limited brand presence and poor attention to channel development in prime EMEA markets. Acronym Key CRM EMEA ESP NSP OEM SCCS SI TDM customer relationship management Europe Middle East and Africa external service provider network service provider original equipment manufacturer Symposium Call Center Server system integrator time division multiplexing Most niche vendors have focused mainly on enterprise-level solutions, and cannot provide scalable solutions to NSPs and specialist outsourcers that offer hosted services. Traditional voice infrastructure vendors like Tenovis and Philips Business Communications should continue to diversify into managed service provision, rather than relying on their core business of equipment supply. Ericsson Enterprise struggles as a minority business unit within LM Ericsson. LM Ericsson focuses strongly on delivering mobility solutions. EADS Telecom maintains its presence in the struggling French market. All niche vendors need to improve their marketing and channel development if they are to advance their competitive position. Bottom Line: Companies need contact center technologies to remain competitive. The range of solutions, financing options, design and contract complexities, continues to diversify, while the technology competitors continues to consolidate. It is imperative to review and amend your contact center acquisition strategy. 16 July