2 24800 2012_north_american_cloud_contact_center_solutions_whitepaper

2011 South African Data Centre Green Excellence Award in Technology Innovation
Cybernest
© 2011 Frost & Sullivan 1 “We Accelerate Growth”
2012 North American Cloud Contact Center Solutions
Company of the Year Award
2012

BEST PRACTICES RESEARCH
Cloud Contact Center Solutions
North America, 2012
Frost & Sullivan’s Global Research Platform
Frost & Sullivan has over fifty years of experience as a global research organization.
Today, its 1,800 analysts and consultants monitor more than 300 industries and 250,000
companies. The company’s research philosophy originates with the CEO’s 360-Degree
Perspective™, which serves as the foundation of its TEAM Research™ methodology. This
unique approach enables us to determine how best-in-class companies worldwide manage
growth, innovation, and leadership. Based on the findings of this Best Practices research,
Frost & Sullivan is proud to present the 2012 North American Company of the Year Award
in Cloud Contact Center Solutions to inContact.
Key Industry Challenges
Frost & Sullivan recognizes that customer contact organizations are facing a set of vexing
dynamics in improving their quality, performance, productivity, and growth prospects:
• The Great Recession. A slow-growth and maturing North American
economy that adversely impacts companies and the consumer alike.
• Cost pressures. Cost-cutting pressures from the C-suite have been
renewed in light of challenging times.
• Product/services commoditization. When prices are roughly equal,
service is the key, if not the only, competitive differentiator.
• A shrinking middle class. As buying power shifts upward, product/service
offerings and marketing is based increasingly on income.
• Customers as influencers. Today’s consumers know their value to
companies, have greater expectations; with social media, they have more
influence over others’ buying decisions than they had in the past.
• High maintenance consumers. More than ever, customers are insisting
on doing business on their terms. These terms include multichannel
availability, minimal or no queues, and outbound contacts that accord with
their preferences.
• Changes in modes of communication. There is an ongoing shift from
landlines to wireless, and from live agent voice to text and video+ voice.

• The need for seamless channels. In many cases, consumers now seem
to prefer to begin interactions via the web, including mobile app self-service.
If their needs are not met, consumers will demand immediate, expert
service from live agents.
• Paying heed to core customers. Marketing and sales is shifting focus
from acquiring new customers to retaining and growing wallet share from
existing buyers, and looking to win over competitors’ clientele.
• An ever changing business landscape. Mergers and acquisitions seem
common, a means to grow market share and profits, acquire new
technology, and reduce product development costs.
• Regulations. Strengthened legislation, regulations, and standards covering
data security, fraud, privacy, and abusive collections and telemarketing
practices are commonplace.
Organizations also face a field of obstacles in the way of responding to these dynamics:
• Legacy systems. Aging and obsolete inbound and outbound contact
routing technology present considerable challenges.
• Rapidly changing organizations. Today’s common vendor mergers risk
product supportability and phase-outs.
• Technology’s evolution. The shift from time-division-multiplex (TDM)
voice technology to Voice over Internet Protocol (VoIP) continues. Some
existing solutions may not work on VoIP.
• Remote working. There is a need to cost-effectively support growing
ranks of home-based- and mobile agents and supervisors.
• Increased need for flexibility and scalability. Demand spikes, plus
business continuity/disaster response (BC/DR), mean that flexible, scalable
capabilities have become a necessity.
At the same time, there have been new tools that have been developed and refined that
improve customer satisfaction and retention, enhance productivity and performance.
Among them are proactive customer contact (PCC); customer chat; speech, screen and
text analytics; eLearning, workforce management (WFM); and enterprise feedback
management (EFM).
Cloud/hosted software delivery, also known as software-as-a-service (SaaS) has emerged
as a viable alternative to traditional premise-license software installations. It is growing
faster than premise solution sales. Frost & Sullivan estimates that cloud/hosting revenues

will surpass that for premise contact center solutions in 2013. It estimates too that the
hosted market will reach $2,981.2 billion by 2017, at an 11.8% compound annual growth
rate (CAGR).
Cloud/hosted delivery have several advantages:
• Lower total cost of ownership (TCO). Frost & Sullivan calculates the savings
as high as 58 percent for a large (500-seat) contact center over premise-
installed over a three year period.
• Little or no upfront capital costs.
• Rapid time to deployment.
• Flexibility, including the ability to affordably support agent and supervisors
at home, mobile, or in satellite offices.
• Ease of provisioning and managing multisite operations.
• More affordable access to the latest technology.
• Minimal technology changeover issues when companies merge.
• BC/DR functionality.
Most suppliers initially offered cloud/hosting for discrete purposes, such as IVR-based call
direction, directory assistance, and BC/DR. Its application has expanded to ACD, outbound
(including PCC), chat, and to analytics, call recording, and WFM (categorized as agent
performance optimization [APO] solutions). Hosted delivery is also used in many customer
relationship management (CRM) applications.
Vendors typically offered hosted versions as an option to premise-licensed products, often
as stripped-down versions. These were mainly aimed at small/midsized businesses (SMBs)
that could not afford or justify the licensing, installation, and server resources of premises
products.
This is now changing. More hosted solutions have the same capabilities as premises
offerings, and are equally scalable to enterprises. Moreover, most new market entrants
have eschewed premise licenses in favor of hosted. Many newer products like chat, EFM,
and eLearning are predominantly-hosted or hosted-only. Frost & Sullivan research
indicates that in the next three to seven years more and larger firms will become aware of
and adopt hosted solutions.
Nonetheless, cloud/hosted delivery faces several issues. The key ones are:
• Corporate resistance to change, particularly during difficult economic times.

Many IT departments are concerned about hosting reliability and security,
but they may also fear job losses.
• Belief that hosting is suitable only for SMBs.
• Instituting and maintaining hybrid environments that satisfy IT concerns.
Meanwhile, there are several waves of technology changes that are prompting companies
to look again at their customer solutions, among them:
• Growing demand for analytics to boost performance and to identify and
capture sales opportunities. Hosting makes these solutions more affordable.
• Support for the new mobile, social, and visual channels.
As a result, the hosted market has attracted interest from vendors. Consider:
• Customer preference is shifting from standalone best-of-breed applications
to all-in-one suites. There also is a preference for customer contact solutions
bundled in with CRM and voice/data services.
• More original equipment manufacturers (OEMs) are now offering hosted
versions of their applications.
• Communications service providers are flexing their muscle by expanding
their hosted solutions.
• CRM vendors are eyeing the hosted contact center market.
• Resellers and systems integrators are now offering cloud/hosted solutions.
Impact of Company of the Year Award on Key Stakeholders
The Company of the Year Award is a prestigious recognition of inContact’s
accomplishments in the Cloud Contact Center Solutions sector. An unbiased, third-party
recognition can enhance brand value and accelerate inContact’s growth. As captured in
Chart 1 below, by researching, ranking, and recognizing companies that deliver excellence
and best practices in their respective endeavors, Frost & Sullivan hopes to inspire,
influence, and impact three specific constituencies:
• Investors
Investors and shareholders always welcome unbiased and impartial third-party
recognition. Similarly, prospective investors and shareholders are drawn to companies
with a well-established reputation for excellence. Unbiased validation is the best and
most credible way to showcase an organization worthy of investment.

• Customers
Third-party industry recognition has proven to be the most effective way to assure
customers that they are partnering with an organization that is leading in its field.
• Employees
This Award represents the creativity and dedication of inContact’s executive team and
employees. Such public recognition can boost morale and inspire your team to
continue its best-in-class pursuit of a strong competitive position for inContact.
Chart 1: Best Practices Leverage for Growth Acceleration
Key Benchmarking Criteria for Company of the Year Award
For the Company of the Year Award, the following criteria were used to benchmark
inContact’s performance against key competitors:
• Growth Strategy Excellence
• Growth Implementation Excellence
• Degree of Innovation with Products and Technologies
• Leadership in Customer Value
• Leadership in Market Penetration

Decision Support Matrix and Measurement Criteria
To support its evaluation of best practices across multiple business performance
categories, Frost & Sullivan employs a customized Decision Support Matrix (DSM). The
DSM is an analytical tool that compares companies’ performance relative to each other
with an integration of quantitative and qualitative metrics. The DSM features criteria
unique to each Award category and ranks importance by assigning weights to each
criterion. The relative weighting reflects current market conditions and illustrates the
associated importance of each criterion according to Frost & Sullivan. Fundamentally, each
DSM is distinct for each market and Award category. The DSM allows our research and
consulting teams to objectively analyze each company's performance on each criterion
relative to its top competitors and assign performance ratings on that basis. The DSM
follows a 10-point scale that allows for nuances in performance evaluation; ratings
guidelines are shown in Chart 2.
Chart 2: Performance-Based Ratings for Decision Support Matrix
This exercise encompasses all criteria, leading to a weighted average ranking of each
company. Researchers can then easily identify the company with the highest ranking. As a
final step, the research team confirms the veracity of the model by ensuring that small
changes to the ratings for a specific criterion do not lead to a significant change in the
overall relative rankings of the companies.
Chart 3: Frost & Sullivan’s 10-Step Process for Identifying Award Recipients

Best Practice Award Analysis for inContact
The Decision Support Matrix, shown in Chart 4, illustrates the relative importance of each
criterion for the Company of the Year Award and the ratings for each company under
evaluation. To remain unbiased while also protecting the interests of the other
organizations reviewed, we have chosen to refer to the other key players as Competitor 1
and Competitor 2.
Chart 4: Decision Support Matrix for
Measurement of 1–10 (1 = lowest; 10 = highest) Award Criteria
GrowthStrategyExcellence
GrowthImplementation
Excellence
DegreeofInnovationwith
ProductsandTechnologies
LeadershipinCustomer
Value
LeadershipinMarket
Penetration
WeightedRating
Relative Weight (%) 20% 20% 20% 20% 20% 100%
inContact 10 10 9 10 8 9.4
Competitor 1 8 9 8 9 10 8.8
Competitor 2 8 8 9 9 9 8.6
Criterion 1: Growth Strategy Excellence
inContact’s goal is to become a principal participant in the global cloud contact center
services market. The company, which is publicly-traded (NASDAQ:SAAS), has won
shareholder support for its vision.
inContact, which began as a voice communications reseller in 1997, entered the hosted
market in 2005. The firm began supplying IVR and call routing, and then added outbound,
chat and APO, EFM, eLearning, training, and hiring solutions. It also has integrations with
several popular CRM applications. The firm uses OEM’ed and internally-developed
applications. Its offerings can be and are integrated with clients’ other applications and
channels, including social media.
inContact also recognized that flexibility, scalability, and reliability are key to gaining and
keeping cloud/hosted customers. Its applications have been installed on secure
multitenant-architected platforms. They reside on servers located in hardened geo-
redundant locations. inContact is certified with PCI, SOX, FCC, and CPNI, and as a Safe
Harbor Partner. The firm promotes its flexibility and scalability as being of interest to
companies looking to institute or expand home-based agent programs.

Frost & Sullivan’s independent research shows that this blend of all-in-one cloud/hosted
services coupled with communications services allows inContact to make a competitive,
compelling, seamless single-provider offer. The communications segment also provides it
with a strong revenue stream.
inContact has developed its strategy as market acceptance of hosting has grown. It first
focused on midsized companies and the North America market but has widened its focus
to enterprises and global and non U.S.-located businesses (it has servers in other
countries). It expanded from direct sales to partnerships to reach prospects in new
markets. It is also seeking BPO clients that could leverage its platform for their customers.
Frost & Sullivan’s competitive benchmarking confirms that this combination of unique and
diverse offerings and marketplace agility separates inContact from its competitors. One of
its chief rivals has a straight but narrow plan which has left it vulnerable should market
forces change. The other principal competing firm has achieved some success. Currently,
however, it is trying to figure out its future strategy.
Criterion 2: Growth Implementation Excellence
inContact has achieved success implementing its growth strategy. Its core Hosted ACD
market share grew to 7.2% in 2011, from 6.1% in 2010.
Total revenues grew to $89 million in 2011 from $82 million in 2010, benefitting mostly
from its hosted contact center solutions. This segment, which includes professional
services, reached $39.9 million from $33.7 million in 2010, an 18% increase. The
communications segment comprises a majority of sales; it reached $49 million in 2011
from $48.5 million.
inContact has found particular success in the finance, public sector, retail, insurance,
healthcare, and outsourcing industries. It now has over 800 contact center deployments,
used by over 60,000 agents globally. It handles over 1 billion calls annually.
inContact made several bold moves in 2011 to further implement its strategy:
• Partnership with Siemens Enterprise Communications. Siemens is the
exclusive master distributor for its portfolio in Europe, the Middle East, and Africa. It
is also nonexclusively reselling the inContact portfolio in the U.S. Asia Pacific, and
Latin America. Siemens invested nearly $24 million in inContact to install its servers
outside of the U.S.
• Partnership with Verizon. Verizon offers an advanced suite of cloud-based Virtual
Contact Center services. inContact supplied it with agent desktop tools to help
educate and prepare agents to field customer inquiries and resolve them quickly.

• Addition of new U.S. and offshore BPO contact centers as clients. A prominent
deal in the Philippines includes support for at-home agents (offshore contact centers
are gradually introducing the at-home strategy).
inContact is already seeing the benefits of its strategic moves. Hosted revenues hit a
record $12.3 million in the first quarter 2012, up 32% over the same period a year ago.
Criterion 3: Degree of Innovation with Products and Technologies
Ascertaining and anticipating market needs, and devising and successfully delivering
innovative products and services, is vital for technology company growth. It is even more
critical for cloud/hosted providers because today’s customers can more easily switch
suppliers.
Frost & Sullivan finds that inContact continues to select, develop, and execute a wider
array of hosted contact center solutions in 2011. It came out with inContact Reports 2.0,
which provides an intuitive and actionable dashboard view of contact center results. It also
developed and went live with Plugin Agent, which enables a seamless integration with
leading CRM systems. It partnered with Verint to deliver the OEM’s APO solutions.
This technology momentum continues into 2012. It released a set of platform
enhancements including:
• Enhanced Agent Scripting
• Click to call
• Unified Agent Desktop Tools
• Expanded Blended Dialer
• Branded chat
• Enhanced Reporting
More upgrades are in the works, including: inbound and outbound SMS/text support;
enabling agents to set aside text-based channels for voice calls; and enabling agents to
add key information such as confirmation numbers to texts.
inContact’s competitors also have innovated, but in somewhat different directions. This
reflects their longer time in the market and their having incorporated many of the
solutions that inContact is bringing on board. They have introduced other solutions, such
as social media, that inContact does not yet offer.
inContact is wise to be cautious. It has to balance between anticipating market needs and
in determining application usage to avoid paying for “shelfware”. To illustrate this point,

while there is high visibility for social media solutions, there has been, so far, low demand
for social media response from the contact center. inContact, therefore, is carefully
examining social media before launching its own solution.
Criterion 4: Leadership in Customer Value
Markets for new solutions like cloud/hosted delivery do not just appear and grow by
themselves. They require marketplace evangelism by the companies offering them. They
must educate and excite customers and prospects about the benefits and value these
offerings can provide. They have to supply answers to the asked and unasked questions.
Marketplace evangelism is critical for cloud/hosted providers. While the numbers of
companies accepting the message are growing, many more, particularly at the enterprise
level, need to be sold on it.
inContact is a customer contact cloud/hosting evangelist. It also has been open about
industry challenges and how its solutions can help resolve them. It has advertised
aggressively about the cloud and inContact’s contributions to that space. Frost & Sullivan’s
research confirms that these efforts mean that inContact is better known than many of its
competitors.
Criterion 5: Leadership in Market Penetration
inContact is rising in the cloud/hosted market in terms of both revenues and market
share. Frost & Sullivan firmly believes that it will continue to gain share in 2012. The
Siemens, Verint, and Verizon partnerships had minimal impact in 2011 but are now
bearing results. Hosted revenues hit a record $12.3 million in the first quarter 2012, up
32% over the same period a year ago.
Conclusion
Today, customer contact centers, often with limited resources, urgently need to replace
obsolete applications and incorporate new ones into their infrastructure. And they have to
do that while effectively attracting, serving, and retaining scarcer but more demanding
customers.
More contact centers are sourcing cloud/hosted delivery so as to provide a more cost-
effective and flexible alternative to premise-licensed installations. After all, hosting
provides affordable access to an excellent means of improving service, output, and
performance.
Frost & Sullivan’s independent research clearly shows that inContact has assembled and
refined a versatile and expanding all-in-one cloud/hosted global contact center platform
backed by a communications backbone. It has been a contact center cloud/hosting

evangelist, thereby expanding the market for all participants.
The company aims to become the pre-eminent hosted provider. According to Frost &
Sullivan’s research, rising sales and market share have validated the company’s approach.
Hence, inContact is awarded the 2012 Cloud Contact Center Solutions Company of the
Year.
The CEO 360-Degree PerspectiveTM
- Visionary Platform for Growth
Strategies
The CEO 360-Degree Perspective™ model provides a clear illustration of the complex
business universe in which CEOs and their management teams live today. It represents
the foundation of Frost & Sullivan's global research organization and provides the basis on
which companies can gain a visionary and strategic understanding of the market. The CEO
360-Degree Perspective™ is also a “must-have” requirement for the identification and
analysis of best-practice performance by industry leaders.
The CEO 360-Degree Perspective™ model enables our clients to gain a comprehensive,
action-oriented understanding of market evolution and its implications for their companies’
growth strategies. As illustrated in Chart 5 below, the following six-step process outlines
how our researchers and consultants embed the CEO 360-Degree Perspective™ into their
analyses and recommendations.
CEO's 360-Degree Perspective™ Model

Critical Importance of TEAM Research
Frost & Sullivan’s TEAM Research methodology represents the analytical rigor of our
research process. It offers a 360-degree view of industry challenges, trends, and issues by
integrating all seven of Frost & Sullivan's research methodologies. Our experience has
shown over the years that companies too often make important growth decisions based on
a narrow understanding of their environment, leading to errors of both omission and
commission. Frost & Sullivan contends that successful growth strategies are founded on a
thorough understanding of market, technical, economic, financial, customer, best
practices, and demographic analyses. In that vein, the letters T, E, A and M reflect our
core technical, economic, applied (financial and best practices) and market analyses. The
integration of these research disciplines into the TEAM Research methodology provides an
evaluation platform for benchmarking industry players and for creating high-potential
growth strategies for our clients.
Chart 6: Benchmarking Performance with TEAM Research
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth
and achieve best-in-class positions in growth, innovation and leadership. The company's
Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined
research and best-practice models to drive the generation, evaluation and implementation
of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in
partnering with Global 1000 companies, emerging businesses and the investment
community from more than 40 offices on six continents. To join our Growth Partnership,
please visit http://www.frost.com.

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