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12 December 2016

How Consolidation Helps Customers

Frank Mirecki

2016 has been one for the books. Setting aside the obvious headlines that may come to mind, it’s also been a curious year for those of us in the business technology and customer experience space.

If you scan the headlines you’ll notice a nearly constant stream of speculating on the future of almost every vendor in the industry. Take Avaya, for instance, a market leader with massive market share, who recently appeared in the media as a potential target for consolidation. Of course, there’s also the most recent news of Genesys finalizing their acquisition of Interactive Intelligence, while earlier this year we saw Mitel take a run at acquiring Polycom. These are big stories with big implications.

Maybe it’s time we faced the facts: consolidation is likely a trend that will not change. If anything it's more rapidly advancing in the UC and customer experience market. In our ever-shrinking world, it seems as though our options are shrinking too. So what does this mean for the businesses that depend on these shifting companies to keep going?

The truth is that those customers' needs are rapidly evolving. There is a steady stream of new opportunities for niche or upstart providers to solve a very particular need. But at the end of the day, those upstarts soon find themselves mired in operational frustration and a familiar position: these new offerings often provide incredible value, say, a capability for you have an automated web chat function on your website, but the very next week someone has to manage it. Suddenly, that solution has become an operational headache, a hammer too heavy for the toolbox.

So, it makes sense that in this ever-shifting marketplace, customers are looking for well-integrated solutions from a vendor where there's no finger pointing or one just back to pat in a more positive sense. They want their lives and business processes to be faster and easier and without the headaches of complex, and often risky, integrations. Customers appear to be preferring to utilize a service without worrying about plugging all these pieces together -- they’ve bought into the unified stack.

I think this has a lot to do with what we see happening around consolidation in the market, and why this trend will only continue.

Don’t get me wrong, up and comers and niche players play an important role. They're challengers. They make the big guys think differently! But at the end of the day if you're an organization, and you have to operate all these subsystems, you want things to work and you want to understand what's under the hood of your business. Otherwise, to quote Albert Einstein, “if you can’t explain it to a kindergartner, you don’t understand it yourself.”

 “if you can’t explain it to a kindergartner, you don’t understand it yourself.”
- Albert Einstein

We hear from many of our clients that they are too busy as it is to be adding more vendors to their environment just to simplify their operations model. They want to have confidence in the tools they use and how those tools fit together. So as new, smaller companies arise to solve new problems, it makes perfect sense that a larger company would choose to make that a part of their portfolio. The customer gets to see an added benefit without having to remember a new brand, and everybody - especially the customer - wins.

The truth is these expanded portfolios, in many cases, also bring about innovative combinations for their teams and customers to experience. We are continuing to see companies look to simplify and centralize the tools to streamline employee engagement. Take, for example, the ability to answer a call from within an application on a staff person's Desktop and have it fully integrated everywhere. This sort of feature is dependent on quite a number of moving parts, and the simpler those parts, the better it works.

So, where once a customer (or their Trusted Advisor) would put a lot of time into evaluating vendors, they are now able to put that same time into evaluating the organization’s actual needs and respond accordingly. In fact, a lot of recent consolidation has occurred to address this exact problem. Where we previously saw traditional vendors with a focus on “on-premise” solutions, and mostly new players focus on Cloud-based solutions, recent consolidation like Genesys' acquisition of Interactive Intelligence, offer customers a simpler path. With Public Cloud, Private Cloud or Onprem solutions all coming from one company, it greatly reduces the risk of buyer remorse in the future.

It seems to me that this sort of consolidation only benefits the customer, as the innovation takes place and then is integrated more organically into the offering of an experienced player and paving the way for a new upstart to solve tomorrow's new problems.

As a business trying to operate in these shifting sands, why make a change with all this taking place?

It’s simple. Business isn’t about technology. In our world, technology is about business, and business doesn't stand still. You probably have a lineup of people in your office. You probably have an email inbox full of requests from employees saying: "We need to change. We need to evolve. We can’t handle these new types of customers. We need to handle new kinds of consumer interactions. We need to outpace our competition."

You simply can't sit back and wait or you'll be Blockbuster before long. Your competitor could pivot and deliver a function that could cost you your entire business. We see this specifically in the outsourcer market, the BPO market, where their core differentiator is the customer experiences they provide. They win or lose large, multi-year contracts based on a function that they deliver or don't deliver today.

So, today, if there’s one thing tech industry can learn something from the consumer market, it’s to simplify our offerings and let the end user make purchasing decisions faster and with more clarity and confidence. Given that this means an on-the-ground win for customers, I say: bring it on.

Let’s get back to focusing on what matters most in business technology: the ideas and solutions that bring business together and make for a better, and better-informed, customer experience. Because when we do, we can win the game together, even if the players change.

Frank Mirecki
12 December 2016

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