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Study Shows Increase in Hosted Contact Center Market
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Study Shows Increase in Hosted Contact Center Market

February 14, 2008

By Susan J. Campbell,
TMCnet Contributing Editor

Companies of all sizes can benefit from the implementation of contact center operations, either on-site or as a hosted platform. As companies operating in the small- and medium-sized business (SMB) sector continue to increase, the demand for hosted contact centers also continues to increase.

Now, the hosted contact center market is set to outgrow its early adopter tag as companies of all sizes are warming up to the idea of hosting these operations instead of managing them in-house.

This shift to an operational expenditure model, reduced maintenance costs and ease of provisioning multi-sourced contact centers make hosted solutions an attractive value propositions to companies in Europe, Middle East and Africa (EMEA), ensuring substantial market potential. 
New analysis from Frost & Sullivan (News - Alert), EMEA Hosted Contact Center Markets, finds that the market earned revenues of €277.9 million in 2007 and estimates this to reach €1.45 billion in 2014.

Enterprises across the region are increasingly recognizing the benefits of hosted solutions, especially considering vendors that offer a wide array of excellent solutions and a number of service providers operating in the market.

The biggest factor driving the growth in the hosted contact center space is the shift from capital to operational expenditure.  
“Leasing contact centre technology allows organizations to deflect high upfront capital expenditure,” says Frost & Sullivan Research Analyst Kunal Kakodkar, in a company statement.
“This is an attractive business proposition for small and mid-sized businesses (SMBs) that seek contact centre technology, but do not have access to the capital expenditure (CAPEX) required for expensive premise equipment.”

In a premise-based contact center, a significant percentage of the total cost of ownership (TCO) is tied to ongoing maintenance, support and upgrades. Such unnecessary costs can be reduced in a hosted environment as service providers can pass on cost savings from the economies of scale of shared resources to the enterprise.
SMBs have already gotten on board with the hosted solutions concept. Now, larger enterprises are only gradually realizing the cost benefits that can be achieved by hosting their contact center operations.
“Many large businesses will slowly make the move to multi-tenant solutions once they become aware of the enhanced flexibility and scalability of multi-tenancy,” noted Kakodkar.
“A multi-tenant offering that includes high-end applications is also an appealing proposition for smaller enterprises, since the CAPEX required setting up an on-premise operation is often prohibitive.”

The hosted market however, will have to work against the widespread perception that companies tend to lose control over operations and compromise the security of critical customer data once they adopt the hosted model. Legacy deployments in premise-based technology also present growth challenges to the market.
“Hosted contact centre suites have matured to a point where several technology vendors offer robust, secure multi-tenant solutions with tenant self-administration and enhanced data security,” observed Kakodkar.

Hosted contact centers are likely to increase is use and adoption throughout the global economy as the benefits are too great to ignore. The interesting element to watch is how quickly companies will move in this direction and if they will be large or smaller businesses that are seeking the benefits.
Susan J. Campbell is a contributing editor for TMC (News - Alert) and has also written for To see more of her articles, please visit Susan J. Campbell’s columnist page.
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