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Five9's Purchase of SoCoCare Part of the Recent M&A Craze in Customer Experience
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Five9's Purchase of SoCoCare Part of the Recent M&A Craze in Customer Experience

October 24, 2013

By Paula Bernier,
Executive Editor, TMC

It seems like a day doesn’t go by lately with at least one notable acquisition announced in the area of customer experience. Today that deal – or at least one of them – has Five9 buying SoCoCare, a social engagement and mobile customer care solution.

"Social media and mobile devices have fundamentally changed customer engagement; consumers are increasingly using social channels and mobile devices to connect with companies for their support needs. With SoCoCare, we've extended our product leadership position by adding best-in-class social and mobile care," Mike Burkland, president and CEO at Five9 (News - Alert).

This deal is just the tip of the M&A iceberg.

Genesys, earlier this month, announced plans to buy Echopass Corp. for an undisclosed sum. The deal expands the acquirer’s position in cloud-based contact centers, as Echopass is the market leader in this space and brings to the table 1,250 new customers, including some blue chip enterprises and federal and state governments. These customers are already on the Genesys multi-channel platform, which Echopass has been using since 2000.   

Aspect, Avaya (News - Alert), and Genesys have all made acquisitions this year to bolster their cloud contact center offers.

Genesys in February purchased Angel. Aspect followed suit a few months later buying IVR outfit Voxeo, And Avaya bought a collaborative cloud and content center outfit called ITNavigator, a privately held business out of Israel that offers cloud, social media, reporting, and management solutions.

Cloud-based customer experience solutions are where the industry is going, Blair Pleasant (News - Alert), an analyst with COMMfusion LLC &, told TMCnet in the wake of the Genesys-Echopass news.

“It's clear that customers are moving toward the cloud for communication services, including for contact center capabilities,” she said. “Cloud solutions make a lot of sense for contact centers – it's easier to add staff and resources for seasonal and cyclical needs, makes it easier to enable at-home or remote workers, etc. Genesys (News - Alert) knows that customers are looking for more cloud options, as do all of the other vendors. The question most vendors are dealing with now is how to increase and enhance their cloud offerings.”

Dave Rennyson, executive vice president of Genesys Cloud and former CEO of Angel, who is in charge of the company’s cloud initiative, told TMCnet magazine that Echopass will enable Genesys to better serve the mid and high-end markets. Prior to the Echopass deal, Genesys already played in the high-end cloud space. Genesys had less than 3 percent of the cloud contact center market in North America before the Echopass deal, and following its close will own more than 10 percent of that market, making it the leader in that space.

In addition to Echopass and Angel, Genesys in the past 12 months has acquired SoundBite, which is known for its outbound solutions. Angel, meanwhile, was a leading inbound provider targeting medium and large enterprise customers with inbound IVR solutions and offering mid-market contact center solutions. Genesys is the inbound leader with the pending acquisition of Echopass and No. 2 in outbound with the acquisition of SoundBite.

“We’ve built a rich fabric of industry leaders in these areas,” says Rennyson.

Yet another cloud-based customer service acquisition announced this monh was Nuance’s (News - Alert) move to buy Varolli. This union also marries an outbound solutions provider, in this case Varolli, with an inbound one.

Nuance also boasts impressive reach, delivering customer service solutions (including inbound hosted IVR, and virtual assistant solutions for mobile and web applications) to more than 6,500 organizations, including major brands AT&T, Barclay’s Wealth & Investment Management, FedEx, Geico, Telstra (News - Alert), T-Mobile, and USAA.

The Varolii platform is used by many of the world's largest companies to manage outbound customer service communications via automated phone, e-mail and text messages. The companies said an estimated one out of every five American adults each year is touched by the Varolii platform.

“The combination of Nuance and Varolii not only represents the best of inbound customer service with the best in outbound customer communications, but the opportunity to deliver automated yet natural conversations with customers that are more compelling and effective,” said Robert Weideman, executive vice president and general manager of the enterprise division at Nuance.

Forrester (News - Alert) Research surveys indicate that 25 percent of enterprises are considering proactive outbound as a key contact center investment in the next year and that proactive outbound will enjoy excellent growth rates as more and more enterprises adopt it.

The third quarter also saw Oracle (News - Alert) buy both BigMachines and Compendium. BigMachines offers cloud-based solutions that enable sales people to more easily generate quotes and pricing for their customers. Compendium offers cloud-based capabilities that enable companies to more easily create, monitor and promote their mobile and other online content. The tools and individuals from Compendium will be combined with the assets Oracle got through its recent acquisition of Eloqua (News - Alert), another cloud-based marketing automation outfit.

The 103,000 mid and large sized businesses in the U.S. spend $1.3 million annually collectively on content creation, according to Toby Murdock, CEO of Kapost, which sells a content marketing software and content platform. That means if just 3 percent of that goes to content marketing software, the market opportunity exceeds $4 billion annually.

Edited by Stefania Viscusi
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