Episode Transcript
[00:00:21] Speaker A: Hello listeners, and welcome to this latest episode of our Metricide podcast. Beth I'm Beth Schultz, the vice president of research at Metrogy, and I'd like to start out by saying that I hope the new year is off to a great start for everybody. We're certainly gearing up for a busy year, but as always, we want to take some time out at the beginning of the year to kick us off with a look at some of the trends and technologies and market developments that we'll be watching for in 2025 across both the world of customer experience and employee engagement. So with me here today to do that is the analyst team and I won't take any time to introduce them right now, but as each of you guys come in with your, with your thoughts, please do introduce yourself with that. Let's get started on the CX side. So Robin, what's on your mind regarding CX trends and technologies? And then, Diane, why don't you kick in with what you are looking at for the CX market in general?
[00:01:22] Speaker B: All right, well, thanks, Beth. And yes, I'm Robin Garris. I'm CEO here at Metrogy and I cover the CX area, the customer experience contact center, how AI is injected into all that which AI is injected, everything these days. But there's quite a few trends I'm seeing this year because this is obviously a really active area.
First of all, I know we've been hearing this term of agentix, kind of a newer term that emerged last year. I see, you know, it's basically the combination of two words. It's, it's, you know, agents and analytics. So how do we get, you know, the analytics and all the AI, all the information we have from AI into the agents world so that they can better serve customers.
And that agent could be, by the way, a live human agent and also just an AI virtual agent. So I think we're really going to start seeing a lot more sophisticated capabilities here. Generative AI will definitely be at the core there and it's going to really enable a lot of hyper personalization of interactions again, whether they're live or whether they're assisted by AI.
Live and assisted rather, or fully automated, either way. But I really see AI being able to make more decisions and take more actions and bringing more power to basically fully automate interactions, but also to help assist those agents to resolve issues not only more quickly but also even more creatively. You know, you're going to see things like agent agents or, I'm sorry, AI agents talking to other AI agents So, you know, if I'm an AI agent and I'm talking to somebody about a customer service issue and I need to go and check on that customer's credit history or order history, I might have another AI bot kind of helping me with that. So it's going to be kind of a team of just AI things all working together with and without live people. So I think that's going to be a really fascinating area to watch and it's really, really driven by generative AI. I think one of the big areas that's going to help that is voice of the customer. That's something that's been around forever. Everyone's had a voice of the customer program or most people have for a while, basically. Oh, we do post call or post interaction surveys, but that's becoming very, very sort of supercharged by AI as well.
So, you know, if you don't, if you have a bunch of customers, you know, typically about 70% or more that don't respond to those post interaction surveys, AI is going to make a really good guess, as you would say about that call. As a, as a, you know, customer, what would your CSAT or MPS score be based on things like sentiment? How long did the call take? What words did you use? Were you yelling? Were you typing in all capital letters? Were you swearing? Were you laughing? You know, all those things come into play and those models are running at about 85 to 95% accuracy right now. So that I think is really helping voice of the customer not only, you know, just operationally let the contact center team and others throughout the company know what customers think, but also, should we be using this technology? Should we not be using this technology? How can we take this information and train agents in near real time almost, you know, so I should say real time, but, but same day even. So I've had my morning calls, I've taken a lunch break, I come back to my desk and I have a quick five minute training tutorial based on what I did this morning because of these voice of the customer inferred sentiment we call it, you know, scores coming back. So, so I think that's going to be really important moving forward. I also think we'll use AI by the way, for unstructured data so when we get reviews from customers. You already see companies doing this already, but you know, being able, being able to actually look at every open ended comment that somebody writes. Like right now, humans can't do that in very large companies for sure. But in any company that gets a lot of reviews AI can and it can summarize it and classify it and put links to examples of reviews so that you get the best information and you can actually take action on those open ended comments as well as the, you know, five or ten star type comments.
Other things I think we'll see moving forward. A lot more proactive outreach again, also being driven by AI. 60% of companies right now are already doing proactive outreach. And when you ask them, you know, do you think that customer service is going to shift from mostly inbound to mostly proactive outreach?
Already we see 37% of companies saying that they expect that to happen by the end of this coming year. Another 34ish I think percent saying within one to three years. So companies by and large are thinking the volume of interactions that come out of this contact center are going to be more proactive than inbound because of AI. It's going to be able to tell us things like, oh, here's a list of customers that are at high risk for churn. Reach out to them. Maybe a human reaches out to them, maybe AI reaches out to them. Here's a list of customers that would probably be really good candidates for a new product or service that you're offering. Maybe AI reaches out and qualifies a lead and hands it to the sales department. Or maybe AI opens and closes the entire thing on its own. So you'll also see things pretty basic like order confirmation, shipping, you know, notifications, ability to reschedule appointments. I mean we've been doing that for a while, but just a lot more proactive outreach. And even just companies that want to maintain a closer relationship with their customers without being annoying. AI can kind of say, okay, here's, you know, the circumstances under which you should reach out to this customer using this type of channel over this time frame. You know, that type of thing. I think that's going to be pretty interesting.
Another thing I think that people overlook a lot is voice. Voice is becoming more popular, not less popular. And it's not only live voice, it's, it's voice bots, it's video bots.
Voice is just becoming more, more and more vital channel like as of last year, about 77% of all interactions went through voice either initially or as a point of escalation. But AI is making this channel even more and more powerful because it's helping those live agents become more efficient so they can, you know, basically handle more calls per day or solve a problem faster and then move on to an upsell or cross sell pitch to the customer. So you know, we're seeing that like if you have an AI triage bot, either in text or a voice bot, saying okay, what's your issue? And trying to route that call where it's going to get the best possible response, highest CSAT score, fastest resolution, happiest customers, all that kind of stuff. Voice is getting more and more of those calls routed to it because agents are being so effective and so efficient. So I think that's something to keep an eye on. Like, what do we need to be doing with voice?
Customers tend to lean on voice a lot depending upon what their issue is. And certainly those 4, 45 and older do.
And even some of the younger generation like that Gen Z is leaning a little bit more heavily toward voice than like the millennials, for example. So we are seeing that happen and we are seeing like also along those same lines, increases in the consumer demand for video and screen sharing. So they want to be, look, you're listening or perhaps watching right now we all use video at work, we use screen share and we talk to people personally. We're on our, you know, video calls and everything. Well, we don't make that easy for people to do with businesses, you know, companies they do business with and consumers want that especially for, you know, specific use cases like consultations or, you know, troubleshooting software, for sure, you know, on screen sharing or even troubleshooting an installation or, you know, something going on in your home. Um, so I think we're going to see companies doing a little bit better on that. I mean the, in Asia pac, I think they do a lot better than they do in North America. Europe is probably in between the two. But what we're starting to see coming out of Asia PAC are actual video bots that can be personalized to the company brand. So either like a real looking person or even a cartoon like person that goes along with a brand of that brand. Like, you know, think of brands that have cartoons. Think of like Disney or something, you know, where you have a cartoon character. What if that's your, your video bot that's walking somebody through something on a scre. We're starting to see that coming to pass and we'll see if that continues on globally or if it's just going to be more of a thing that's widely accepted in Asia pac. But anyway, those are some of the things that I'm seeing. There's a lot more I could probably do the whole session on this, Beth, but I've got a great team of colleagues here, great team of colleagues here who have certainly fantastic insights as well. So I would love to hear from them.
[00:09:53] Speaker A: Thank you, Robin. And Diane, why don't you go ahead and tell us now what you're looking, you know, looking at for the CCX market in 2025.
[00:10:01] Speaker C: Yeah, great. Thanks, Beth. So for everyone on this call, I'm Diane Myers and I lead our metrocast service where we do forecasts and market shares and benchmarks. And probably, you know, the big thing in the CX space in terms of when I look at forecasts and market shares and the likes is that we have continued a movement to contact center as a service. Right there is still the majority of agents are sitting on, on prem or dedicated, I should say platforms. But, but really the growth and the continued movement is to absolutely to see CAS. We expect 2024 to come in roughly around 18% growth in terms of global revenue and another, you know, double digit, probably 15 to 17% growth again in 2025. So, you know, this is a, you know, we expect 2024 to have ended around $7 billion for CCAs and growing to well over 8 billion by the time we, you know, there's just a lot of upside potential on the CCAAS side. And I would also, you know, say, and this will be a bridge into when we start talking about the collaboration market that, you know, a big driver of some buying decisions is really looking and this is our study data that proves this out that people want similar vendors. Right. They want the same vendor that's going to give them their, the contact center platform, but also their, you know, UC and phone for their enterprise employees. Right, for the employee side. And we know that's around 43 to 44% are kind of doing that today using the same vendor and that we expect that to continue to expand and to grow over the next couple years. And the two primary drivers in that space are cost savings and really allowing agents to interact with employees, subject matter experts to really help resolve customer issues. So that's kind of a bridge and I know we'll talk about some forecasts a little bit later. Two other areas I think are just worth highlighting in terms of what we look at, in terms of what the forecast looks like. The biggest area of growth in this space Is really around CPaaS and utilizing those APIs and driving that kind of level of integration in 2024. This market's going to approach when we get the numbers in, in the next couple months, it's going to approach close to a $16 billion market. And we expect it to grow, you know, continue to grow double digits into 2025 and you know, get close to an $18 billion market. So just lots of things going on globally. Right. This is, this is, you know, and we have players all over the market. We have companies obviously that are like, like a Twilio who you know, is global or Vonage slash Ericsson. But then we have companies that are very focused on India, are focused in China and focused in Europe. So this market is, you know, it's really dynamic, lots of things going on. And also the migration and towards network APIs, not just the core application APIs. And then I would just touch on the other area that is really eclipses all the others in terms of just pure size and that's CRM. And this is an area we hope to dive into and do a little bit more in 2025. But this is an $84 billion market. Right? So this is a market that is such a great example of having gone from on prem dedicated systems to fully cloud enabled solutions. Well above what we see on the, you know, in terms of CCAs or UCAs. And you know, obviously Salesforce is the large company and that's the one everyone looks towards, but there's so many other options out there and there's lots of things going on with smaller companies, but even large companies like an Oracle or an SAP that have solutions in this space. Also Microsoft being another one. So not as large a growth, single digit growth in CRM, but a big market. So one that we can't just ignore.
[00:13:59] Speaker A: Yep, absolutely not.
Okay, so Laney, you're going to be doing some research for us this year. Why don't you talk a little bit about your area and what you're expecting.
[00:14:13] Speaker D: Hi everyone, I'm Lainie Hoxma. I have not been on a podcast like this yet because I've been with metrogy since the beginning when we launched the company. But I was our senior account executive so I did that for about four and a half years and then mid last year I transitioned over into an analyst role here which I've been having a great time doing so far. I primarily been assisting Diane with the market shares and market forecast research, the Metrocast stuff that she just talked about. But this year I'm also going to be launching a research study on the workforce optimization and workforce engagement management. So WFO W E M we'll be doing this study from both agent and supervisor perspectives and of course with the highlight, expanded use of AI to automate manual functions like scheduling, training, real time performance Feedback, quality management.
And so from our customer experience optimization research study that we did last year, we already know the top worker focused CX transformation projects are AI powered, training or coaching, adding or improving WFO and then improving agent desktop applications.
Right now we see about 40% of companies already using WFO suites, with another 41% evaluating or planning to adopt the technology within the next couple of years. So we definitely think this is an important area to take a deeper look at this year and that's a high level overview the topics we'll cover for this study this year.
[00:16:08] Speaker A: Well, thank you Lanie. I know we're really excited about, you know, really being able to dig into the WFO WM space and I'm glad that you're going to be spearheading that for us. Okay, before I go over to Irwin and employee engagement, let me just wrap up the CX section with a little bit more on CPAs. As Diane mentioned, a huge market and one that I cover. So just a couple things that I'll be watching.
First is enriched communication services. RCS enhanced messaging certainly not a new technology. RCS has been touted as sort of the next, the next step beyond SMS for quite some time. Limited in adoption in North America and us in particular with the lack of support from Apple. But that has changed now that Apple is beginning, has begun to support RCS as of iOS 18. And so we've already seen in our research really strong interest from IT and CX leaders around some of the enhanced capabilities that RCS will enable able.
So looking to see what they're, you know, how messaging strategies are going to change with the adoption of rcs.
Robin mentioned proactive outreach. Certainly being able to create more interactive and you know, messages with rich, more rich media. You know you get that branding in there, you get your interactive buttons, you know, product carousels, all that good stuff that'll keep, you know, meant to keep consumers engaged within the messaging channel itself and kind of just do that whole complete journey within, within the channel including sales. So I think there will be a lot of good, good stuff coming down the pike with rcs and we've certainly seen a lot of interest from the CPAs providers themselves.
You know the, the most of the top providers that we profiled in our 2024 CPAs, Metrorank, the leading vendors in all made moves into RCS and you know that includes Cisco, Infobip, Cinch, Tata Communications, Twilio, Vonage and I know that we'll see more from them and from others as well. So that's One area, the other area. I'll piggyback on what Diane mentioned regarding network APIs. Certainly we've seen a huge push from the mobile network operators and their equipment vendors around network APIs, really trying to get more out of their 5G network investments.
CPaaS fits in nicely by enabling those developers to kind of marry what they're doing on the communications API side with the advanced 5G network capabilities to kind of reach out and create these CX applications that are able to take advantage of what carriers have been doing with security and fraud protection, location awareness, quality on demand capabilities. Kind of big areas that we're seeing around network APIs today. A lot of activity around from Vonage and of course its parent Ericsson Infobip through relationship with Nokia, very active in this area. And we know from our research that enterprises are interested in the potential here. Nearly 46% are already exploring potential use cases around network APIs. And then 40% are at least keeping their eye on what's going on here so they can, you know, be ready to move at the right time.
The last thing I'll point out is just again, how, how can I not mention AI, you know, AI infusion. Robin mentioned it's, it's, you know, part of CPAs as it is anywhere. So just kind of watching how else companies are embedding AI into those applications, I'm sorry, into those APIs rather. That could be for, you know, video, voice messaging, workflows, what have you. So keep an eye out there. Okay, so that wraps this up for cx.
Kind of tip of the iceberg. There's, there's a whole lot more that we will be watching out for for the year. But let's go over to the employee engagement side.
Go ahead and take us away.
[00:20:31] Speaker E: Okay. Hi everybody. I'm Erwin Lazar, president and principal analyst. I lead our research around unified communications collaboration under the umbrella of employee engagement. So really anything having to do with collaboration and loved hearing the trends that we saw from my colleagues. A lot of that continues on as we think about how our. How is the world of employee engagement and internal collaboration evolving over the next year? There are four core areas that we continue to look at and we'll focus our research on around the coming year.
I guess I have to mention AI everyone else did, and it's certainly the driving force in the IT world right now. There's a lot of areas we're looking at within the collaboration space. We published data in the last year looking at things like adoption, training, budgeting, how are companies Measuring the success and the value that they're getting for AI. How is AI impacting their overall platform decisions as they think about the potential of having multiple AIs and having to share data to create maybe a single source of truth? And how does AI capability, how do, how do AI capabilities available within my collaboration applications engage and interface with a broader enterprise wide AI strategy? So if I'm deploying OpenAI, but I also have AI from Zoom and Copilot and Microsoft and others, how do I share information across those? And what is the impact on my purchasing decisions? Do I look at a single vendor shop versus multi vendor? Can I continue to maintain multi vendor when there are so many different AIs? So I think that's a big area of focus for us as well. Secondly is around security and compliance and governance. We published our first dedicated study looking at workplace collaboration and contact center security and compliance last year and we'll refresh that coming up this year and really try and understand how are organizations protecting themselves against potential threats of their AI LLMs being poisoned or producing bad information or sharing information that they shouldn't be sharing with people who shouldn't have access to it. We found that across our studies, security, compliance and governance is really the biggest limiting factor right now for adoption of AI. As companies worry about not only delivering the wrong information, but getting that information into the wrong people's hands. We continue to look at the Microsoft space. We've certainly seen Microsoft take a large position in the enterprise unified communications and collaboration market, but there's still a lot of areas where competitors are playing around. Video devices, around pstn, connectivity management, managed services. And even now with the impact of Microsoft raising the prices on teams phone, as well as splitting off teams from their Office and Microsoft 365 licenses and offering that option, we continue to look at how that's impacting the market and are there now increasing opportunities for competitors to take a piece of that Microsoft puzzle? And I'd say lastly, we continue to look at the future of work. I think one of the surprising data points that I just published in our employee Engagement Optimization study that went up in November of last year and that was a global study of 400 organizations, is that return to Office mandates, while they're getting a lot of attention in the media, are still really in a state of flux. Roughly 40% of the companies that we gather data from expect that their policy, whether it's bringing people back or whether it's continuing to allow people to work from home, will undergo some sort of change. Next year. So companies are trying to figure out what the right strategy is for them. If they're bringing people back. Maybe they're trying to measure what the impact is on their workforce and on retention, employee happiness and so on. They're also looking at how they evolve their workspaces. So use of, of shared desks versus assigned desks, how much space is reserved for meeting rooms, what do those meeting spaces look like in terms of how you leverage AI, how you leverage multiple cameras, center room cameras, touchscreens and so on to tear down the barriers between the people who are meeting within an office and those who are still attending meetings remotely. So lots to look at there. And then really one of the questions one of our clients asked us that I'm still wrestling with is what does work look like over the next year? You know, we've spent decades now dealing with mail inboxes and phones and more recently meetings and team collaboration applications. Is there something else there? And Beth has done a lot of research for us around the Connected Workspace area around applications like Notion, Zoom, Docs, project and project management applications. And so we're going to continue to see how those evolve. Virtual whiteboard applications is something we continue to look at. And again, how do AI and AI agents interface and potentially alleviate some of the day to day work that we do, hopefully making it easier. I think all of that's really exciting areas to watch over the next year.
[00:25:22] Speaker A: Well, Erwin, I was going to toss in Connected Workspace, but you handled that already. So definitely an area that we'll be keeping our eye out for. Really an interesting, really interesting area, kind of because it crosses so many industry segments from the UCAAS side and team collaboration apps to productivity suites and project management vendors, content, collaboration, management. Everybody wants a piece of this, you know, to sort of capture where it is that employees are working and keep them there throughout the day and facilitate that work. But anyways, Diane, why don't you go ahead and wrap us up with kind of your thoughts around the market here?
[00:26:02] Speaker C: Yeah, yeah. You know, this is a little bit more challenging, right? Because Microsoft is so dominant, right? And when you have one vendor who is dominating the, you know, the installed base and new activity, it is challenging, right? It kind of mutes some of the competition and we see that, right, A lot of the competition.
Other vendors out there have absolutely looked to, you know, to other areas, right, for growth and for expansion, whether that be on the CX side or employee, other, other employee productivity tools. So, you know, growth. We are, we are much further along with the adoption of UCaaS. Right. So you see, you know, as in a true multi tenant cloud service than we, we are with ccaas, right. It's been around a little bit longer, it's a little bit more mature and obviously the pandemic back in 2020 really escalated people's you know, plans, right. In terms of the migration. So we're only for you cas, we're only in single digit growth, right? There is still growth. It is, we expect, you know, 2024 will probably just be shy of $24 billion market and you know, and it'll grow another, you know, maybe 7, 8% this year in 2025. But that's pretty, you know, it's more muted growth than we see the double digit growth that we, you know, that I talked about on the CX side.
And you know, I will say, you know, while Microsoft is dominant, like I mentioned, right. You know, there is still competition, right. You know, Zoom, Cisco, some more what I would consider pure play companies out there, right. Like RingCentral and 8 by 8 and even some really localized players in different regions or in different sub regions within given countries. So there's still revenue to be had, just maybe not the big growth that we would have seen four or five years ago.
[00:28:01] Speaker A: Okay, well, thank you Diane and Robin and Erwin and Lainey, of course.
Naturally we'll be using our research with enterprise IT&CX& business leaders to help us track all of what we've talked about here today, plus much more.
I just wanted to run down a few kind of heads up. Here's what's coming down down from us in terms of research from the next quarter or two and we actually just published. First, let me ask you, we just published our CX Optimization Consumer Views study. So if you haven't taken a look at that, you can find it on our website and other stuff that'll be coming out shortly. This quarter, next quarter we have our UCAS metrorank report that Diane is taking care. We've got CX and workplace collaboration forecast and market share reports coming out, Our annual CX Metrocast 2025 market study and then we have studies on Microsoft Teams and contact center AI for business success, WFO WEM data stores and knowledge management, Workplace collaboration and contact center security. And much more, much more to come second half of the year too.
Okay. So as always we're super happy to hear from listeners. So if you have any questions regarding anything we discussed today or our research in general, please don't hesitate to reach out to us. Easiest way to do that is use the contact button on the Metro g website at www.metro g.com. with that, on behalf of the Metro G team, Happy New Year and goodbye till next time and take care everybody.
[00:29:42] Speaker E: It.
