Hosted contact centers thrive amidst gloom

by CXOtoday News Desk    Nov 28, 2013

hosted model

Cost reduction is no longer the key growth driver for contact centers in Asia-Pacific. Today factors such as high level of flexibility and scalability, business agility offered by the hosted models is driving the growth of contact centers in this region, says Frost & Sullivan. The analyst firm predicts that hosted contact center market in Asia Pacific is inching towards a double digit growth in the coming years.

According to the report, at the end of 2012, hosted contact center market in Asia Pacific earned revenues of $220 million registering a near double digit growth. The market is expected to generate $597.2 million in 2019 at a compound annual growth rate of 15.9% during the period.

“While cost reduction continues to be a key objective, the predominant driver is no longer just the financial benefit of moving an expense from capex to opex,” mentions Krishna Baidya, ICT Research Manager at Frost & Sullivan. He explains that enterprises have now come to appreciate the host of other benefits for the cloud model, particularly; reduction and simplification of ongoing maintenance, faster deployment and realization of business value

The APAC advantage

According to experts, the global economic uncertainty has had a positive impact on the growth of this sector with some businesses exploring options beyond premise-based solutions and ones that are low on capital investment. Moreover, the increasing number of vendors and service providers that are actively expanding into the hosted contact center services segment in the region is also aiding market development.

The report found a greater thrust on customer services by SMBs are also boosts the demand for hosted contact centers in the region, as these players are particularly attracted to the pay-per-use model. While at the same time large enterprises are likely to require customized offerings to align with their existing infrastructure are also turning to these models.

The report notes that the region as a whole still has a very large installed base of legacy infrastructure and it is likely to delay the adoption of hosted technology. There are few total replacements of premise-based systems. As companies reach the end of the product life cycle with some of their existing premises’ infrastructure, it is expected that the potential growth curve for hosted systems will become steeper.

Challenges to deal with

Despite the growth, Baidya in his report sees a perceived lack of security, reliability and privacy amongst certain segments of customers, especially in the financial and healthcare segments, is likely to impact the adoption rate in the short term. To change this mindset, hosted solution providers must comply with government regulations and private standards.

On a positive note he believes that the market continues to shift to a wider range of pricing tools, with vendors also creating hybrid pricing models that provide greater flexibility to the end user.

“The emergence of these models is a clear indication of vendors’ interest in tapping the potential of the Asia-Pacific market,” he says.

On the whole, experts believe with benefits such as low upfront investment, instant access to cutting edge technology and rapid results, the hosted contact center services are set to thrive in the coming months.