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Analyst Insight: Contact Center Market Consolidates as Verint Buys Witness

The Verint-Witness deal combines agent workforce management with call recording, quality control and contact center performance management, but not all enterprises are ready for all-encompassing suites.
Building a contact center architecture has always been a major issue for companies because it requires integrating several often incompatible pieces of technology. One approach is to avoid as many integration issues as possible by buying not individual, best-of-breed systems but rather a more broadly functional integrated system. As the market for contact center technology consolidates, more of these integrated packages are becoming available. Ventana Research notes that this approach will not suit all companies, as many contact centers wrestle with numbers of legacy systems; it often is easier to buy point solutions than to replace the old. Verint Systems’ soon-to-be-finalized acquisition of Witness Systems will increase its profile as a vendor of integrated, enterprise-style suites. What is uncertain is whether the market is ready for suites and how competitors will respond.

The Verint Systems-Witness Systems deal continues the consolidation trend in the contact center market. Over the last few years, Oracle has taken over PeopleSoft, JD Edwards, Siebel and [email protected] (plus numerous smaller purchases); Nice Systems has taken over IEX, Performix and Mercom; M2M acquired Onyx; Witness acquired Blue Pumpkin and Amae Software; and Opus is now part of Verint. All in all, this seems to be a race to create an enterprise-wide suite of products that will allow the new, bigger company to consolidate its position in established accounts.

Will Verint's acquisition of Witness be good news for customers? The answer lies in the responses to two key questions: How will it affect the support of current systems? And what does the future hold? The vendors themselves claim that it can only benefit their customers, by offering more integrated solutions from a single supplier, making support available from one source and providing more funds for R&D as two companies combine efforts. All this is of interest to customers, but likely none of these issues are top-of-mind. Customers have their own businesses to run and tactical issues to resolve; we believe they are more likely to question how distracted the companies will be as individuals compete for jobs and roles in the new entity. If the customer opts for the recrafted, integrated system, it must wonder how problematic it will be to be locked into one vendor and how that choice will impact its overall architecture, which may well contain products that compete with those provided by the new combined vendor.

Culturally, Ventana Research believes Verint and Witness should gel well. Both help their clients focus on their own customers, albeit from slightly different perspectives. By creating a wider portfolio of offerings, they will be better positioned to offer such help. We do not expect them to have many problems integrating their technology because apart from an overlap in voice recognition, the product lines are largely unique. Verint has always focused on BI and analysis tools through its flagship product Actionable Insight; in contrast, along with quality monitoring, Witness has focused on agent workforce management. A crucial question, though, and one still not answered, is how far the integration will go. Nevertheless, the combined company will have a portfolio that will enable it to compete on more equal terms with the likes of Aspect and NICE Systems.

Ventana Research understands the case Verint and Witness have made for combining their product portfolios, but we question whether the market is ready for it. Most contact centers are saddled with arrays of legacy technology. For many firms, replacing legacy technologies with an integrated, enterprise-style suite would be too disruptive. It will be interesting to see how the combined company addresses this issue and how it fairs in what is sure to become a head-to-head competition with NICE. It also will be interesting to see what, if anything, the big switch manufacturers such as Avaya, Cisco and Nortel do in response. They have been quiet lately on the acquisition front, but that won’t last as they and other vendors race to gain advantage in what has recently become a much more active market.

Running a contact center requires many different pieces of technology, and integrating these has always challenged companies that use them. This latest consolidation creates another option, with several of the key technologies more closely coupled and supported from one organization. Ventana Research recommends that once this deal is settled, companies looking for a combination of call recording, quality control, agent workforce management and contact center performance management should give serious consideration to what the new company offers.

Richard Snow is VP & Research Director – Contact Center Performance Management at Ventana Research, a practice dedicated to helping organizations improve the efficiency and effectiveness of multichannel contact centers. Write him at [email protected].