Microsoft Move into CCaaS Market (Part 1)

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This summer, Microsoft announced they were entering the Global CCaaS market, and in doing so, are taking on established global cloud communication vendors and global business platforms.

In this the first of our new editorial series, we speak to Technology experts, Resellers, Vendors, and Users, and gather a range of views and opinions from across the Industry on the effect this move will have, both on the market, the competition, and possible or likely responses, where they may go with the technology, costs and pricing, and what this all means for the clients and their customers.

Why have they entered this market?

“The launch of the new Microsoft Digital Contact Centre is not unexpected, as Microsoft moves to leverage their large addressable market of Teams users; extending the conversation from collaboration and (mainly back-office) voice to the contact centre” says Ken Day, Chief Operating Officer at Technology partner specialist, Route 101.

“Utilising the advantage of an effectively ‘captive’ audience, the new CCaaS offering presents a significant opportunity for Microsoft to expand existing accounts – and a chance to challenge Amazon Connect in the arena of the ‘build your own solution.”

“On my bookshelf I have a copy of ‘Strategies and Solutions for Connecting to Customers – Growing your Business Online’, published by Microsoft twenty years ago in 2002! says William Carson, Director of Market Engagement at Ascensos

“The foreword begins: Business in the twenty-first century operates under new constraints. Today, business managers must find ways to empower employees, build closer relationships with customers, and interact seamlessly with partners and suppliers’. 

It concludes:‘Microsoft offers integrated solutions to solve real-world business problems using best-of-breed technology and providing enterprise-level services and support from Microsoft and its partners’

It could have been written as part of the PR for the MS CCaaS launch in July 2022!” “Unsurprisingly then, the emergence of Microsoft’s CCaaS platform is testimony to the continued evolution of the technology and, perhaps more importantly, the mindset of the customer management and engagement industry.

With AWS Amazon Connect now a well-established CCaaS solution since 2017, supporting brands of varying scales and sectors, the news from Microsoft is perhaps less surprising than the length of time it took to get its proposition together!”.

“More than a quarter of a million people use Microsoft Teams, making it the most popular business communication service in the world. With this in mind, it was only a matter of time before Microsoft expanded into another marketplace full of big players, competition, and innovation” says Damian Bowen, Chief Operating Officer at Business Systems.

“However, Microsoft will be unable to fully infiltrate the contact centre marketplace right away. Instead, it will focus on its long-term ambitions, building an ecosystem centred around digital services and applications to serve digital natives such as Millennials and Gen Z.”

How will the Platform sit in the Market?

“One suspects the Microsoft solution will be less feature rich than some of the more established platforms on the market. Whilst Microsoft have always been strong on desktop and with enterprise applications, this does not necessarily extend to essential contact centre services like WFM and Quality Management.” says Ken.

“It will certainly be interesting to see if Microsoft acquire any additional technologies to augment their offering – or if they look to implement a certified partner program to fill these capability gaps.

Our advice to those exploring this solution would be to press Microsoft hard on how this solution is actually being brought together and supported. As a comparative example: the Amazon Connect proposition requires an amount of build within AWS, and attachment of 3rd parties to provide a complete CC offering. With this in mind, those businesses with more complex requirements will undoubtedly be best served by those platforms inhabiting a space top right in the Gartner Magic Quadrant.

There has previously been some talk of voice-enabling Microsoft Dynamics, and offering digital channels and customer service/CRM through this. Again, our opinion would be that it is important to understand how loosely coupled the MS offering is – many organisations will already have a CS/CRM system in place and would look to integrate additional service channels into this. 

We have observed the SLA for Teams Voice recently increased from 99.9% to 99.99% – an area which has historically been a weak point for Microsoft. If we assume this SLA will be applied to the Contact Centre, it does make the new solution more competitive.”

“Features like AI, NLP and response prompts will certainly provide agents with enabling functionality. However, team management, and positive working environment initiatives that empower frontline staff will remain key.” says William.

“What isn’t so clear is where the employee technology dividend lies in the Microsoft CCaaS solution – or indeed similar solutions more broadly. Efficiency at the expense of employee wellbeing can go unacknowledged. There are some excellent tools in this space offered by businesses like Sabio, but their development appears to be necessary as such components seem absent from many CCaaS technology provider UX designs.

What would really impress is a component that exports real-time customer journey mapping, with visualisations for journey impediments as well as enhancements, along with possible solutions for reducing friction and increasing opportunities for profitable/meaningful engagement where needed – and all this automatically. That would provide advisors with super-charged knowledge base and on-the-job learning modules that would make a real difference to motivation, quality, and performance.”

“Driving digital transformation within the contact centre space will be at the heart of Microsoft’s strategy –something which giants of the CX world are grappling with right now. To facilitate this, they will look to make more acquisitions, partnering carefully with selected CX leaders. It’s anticipated that they will also look to build their all-in-one contact centre tech offering, designed to break integration and interoperability barriers. Offering free trials for their product sets, designed to entice their customer base, with a long-term view of rolling out its contact centre offering across the entire business application suite may also be a good tactic of theirs.” says Damian.

“Recognising a gap in the voice marketplace, it may be that Microsoft chooses to take advantage of the need for an Analytics capability within the contact centre space. Rather than focusing on providing the technology to serve inbound contacts, an Analytics capability goes one step further in understanding why customers are getting in touch in the first place – a requirement which contact centre leaders are screaming out for.

To drive further business scalability for clients, Microsoft may also consider integrating their CCaaS solution with Microsoft Dynamic, their own CRM application suite. It would definitely set Microsoft apart from the rest, establishing them as the only CCaaS player with their own contact centre technology stack and their own CRM. The possibility for industry influence, that would be derived from this, would be paramount.”

What will this mean for Customers?

In today’s digital world, an organisation’s reputation hinges on the quality of its customer experience. With the stakes so high, companies need assurance that their customer service platforms are robust, scalable and can offer the seamless experiences modern customers crave.  Those businesses looking to avoid an onerous build process will most likely continue to opt for the complete packages available in platforms like NICE CXone.” says Ken.

“Microsoft are in an incredibly privileged market position – near-doubling adoption to 270million users in 2022 from 145million in 2021 – and they already own the majority of the enterprise desktop. If they can offer a robust and inclusive CC offering that readily integrates with that existing landscape, they have the potential to be extremely disruptive among the more traditional players. 

If the new Digital Contact Centre functionality is included to an extent in existing subscriptions, the option for customers to ‘try before they buy’ and/or replace their legacy contact centre with reduced risk will undoubtedly be appealing. However, the downside of this is the likelihood that many MS customers will – as they do today – find themselves paying for elements in their subscriptions that they don’t necessarily use.”

“Today customer contact centres source their solutions from multiple providers – from point to enterprise-wide services, often delivered across multiple geographies, and increasingly (although still niche) using ‘crowd sourcing’ to support customers where appropriate. says William.

“The expertise and experience of internal IT teams today has also evolved. From the perspective of the CX BPO, client implementations now involve complex systems integration as standard. It is as likely to converse with client IT teams on the simplest of DDI solutions to full CRM and multi-channel deployments. Amazon Connect launched 5 years ago, and most in our industry will have been approached more and more by cloud contact centre solution providers. Indeed, it is such a growth market associated with our industry, it is certainly no surprise that Microsoft has entered the arena.

Perhaps an attraction for those not currently using CCaaS platforms will be the entrant of a familiar and credible global leader that has always appeared to have had the user at the heart of its propositions, making working life easier versus others that have offered tech for tech’s sake – anyone for Siebel?

Significantly, Microsoft CCaaS will also introduce a cost competitive element that businesses will welcome where they continue to seek efficiencies while maintaining and improving quality for customers.

Right now, customer contact, management and engagement remains for many at board level, a cost to be managed, and a little understood aspect of the customer relationship with the brand. For those so minded, the opportunity to ‘pay as you go’ presents a tempting opportunity to invite the Head of Customer Care for a ‘fire-side chat’!”.

“Microsoft’s move into the CCaaS space will be beneficial for its clients. Clients will benefit from easy deployment, flexible licensing agreements and the availability of cost-effective bolt-on’s to cater for business scalability.” says Damian.

“From a customer point of view, whether Microsoft will conform to the contact centre world requirements in adopting a clear feedback strategy focused on user journey and experience, remains unknown. We have yet to see whether Microsoft has an ongoing mechanism and strategy in place for truly understanding ever changing customer expectations.”

What does the future hold?

“As economic challenges mount and a recession seems imminent, price conscious organisations will likely find the necessity for licencing on top of Microsoft 365 to be quite prohibitive. At a time when many businesses will be looking for flexibility in their licencing numbers, the NCE model offered by Microsoft could pose a significant challenge. Prospective buyers should closely examining how the Digital Contact Centre is charged, and the TCO is essential.” concludes Ken.

“It will be a question of time to see if Microsoft will acquire a well-known voice provider to further satisfy its needs for voice and telecommunication functionality. As voice continues to become more of a commodity rather than an explicit need in an omnichannel world, Microsoft may well leave the voice space to current leaders such as NICE, Genesys and Verint, to do with as they please.” concludes Damian.

“Simply brain-dumping about the many evolutions the contact centre has already been through in the past decade alone, it’s self-evident that CCaaS will mature and will, in-of-itself drive further integration and innovations. The alignment of AI, automation, ID&V tech and the compliance and regulatory frameworks across industry sectors that require them when engaged in meeting customer needs are too obvious to ignore.” concludes William.

“With the switch to MS Teams during the great remote working adventure of the past 24 months, arguably the timing here is opportunistic. Reluctance to remote engagement at a management level has evaporated somewhat, while the productivity gains of the work from home models have been significant, and well documented – and surrounding it all, ‘as a service’ concepts in everything tech-enabled and/or on a per licence basis are ubiquitous.

I will leave it to those better placed than me to debate the merits of a Microsoft CCaaS at a more technical level, but with its brand familiarity stamped across a myriad of software solutions that both customers and employees will recognise, I think there will be a ‘comfortable slippers’ feel to engaging with MS CCaaS which will influence buyer behaviour as much as the features, functionality, and performance of the solution itself.”

Thank you to our editorial contributors:

Ken Day, Chief Operating Officer at Technology partner specialist at Route 101 

William Carson, Director of Market Engagement at Ascensos

Damian Bowen, Chief Operating Officer at Business Systems

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