Last month, contact center AI provider Afiniti filed for Chapter 15 bankruptcy.
Chapter 15 bankruptcy involves asking for help from a US court to protect the business while it works out how to repay the money it owes.
Afiniti’s plunge comes after the business endured much bad press over recent years, stemming from allegations of sexual misconduct against its founder.
That scandal likely impacted the business. However, bankruptcy also says something about the current state of the CCaaS industry.
That’s according to various leading CX analysts, who shared their thoughts on the bankruptcy during a recent episode of CX Today’s Big News Update.
For starters, Zeus Kerravala, Principal Analyst at ZK Research, explained how the supply of contact center vendors has reached a surplus:
When it comes to the broader CCaaS and CX space, we’re seeing an oversupply of vendors compared to demand.
“Historically, this industry evolved from traditional on-premise contact center vendors to a wave of cloud-native players like Five9 and Talkdesk.
“Then, unified communications (UC) vendors wanted a piece, adding contact center capabilities to their portfolios.
Kerravala continued: “Also, because of AI, companies like Cognigy, Uniphore, and Kore.ai are closing on the space.
“On top of that, there are vendors building digital tools—such as Verint, ServiceNow, and CRM players — all of which are encroaching on the contact center market.”
As a result, Kerravala – like many other analysts – foresees an increase in mergers and acquisitions over the coming years.
Alongside that, more bankruptcies are possible, too.
However, this pattern isn’t unique. Look at marketing automation and MarTech as similar examples. Over time, consolidation occurs, especially when cash is cheap.
Big players buy smaller companies to fill gaps in their portfolios, but this often results in fragmented solutions. Customers then need system integrators to stitch everything together.
After making this point, Liz Miller, VP & Principal Analyst at Constellation Research, said:
CCaaS, UCaaS, and others are colliding, creating casualties, especially among companies that relied on flashy demos that never materializes.
Afiniti could be accused of being one such company, offering a partial solution. Also, as routing has become absorbed into broader CCaaS offerings, their niche has become redundant. They struggled to stay relevant as budgets shifted toward generative AI and other innovations.
Yet, as Miller suggests, Afiniti is far from an outlier. Derek Top, Senior Analyst at Opus Research, agreed, stating:
It’s a black hole analogy—the companies with the most mass will survive while others on the periphery get sucked in.
Without cash reserves or significant R&D, they risk being left behind as the ecosystem consolidates. So, how can they survive?
Keeping the customers they have now, developing a differentiator in a market segment (i.e., industry), and getting into the ecosystems IT teams like to use, like ServiceNow, are possible answers.
Why the latter? Because the industry-wide significance of AI is shifting buying decisions back toward IT, who will likely prioritize integrating contact center tools with broader ecosystems.
Whatever the case, as the market consolidates, smaller vendors that excel at one specific feature – like scheduling social media posts – must evolve or get acquired.
