Despite its promise of greater ease of integration, flexibility, and scalability, just a fifth of enterprise contact centers have stepped into the cloud.
That’s according to estimates shared by Mike Burkland, Chairman & CEO of Five9.
During an earnings call, he stated:
In terms of cloud replacing on-premise, we believe that the [enterprise] penetration is still less than 20 percent.
Sometimes, CCaaS vendors understate this figure to inflate their total addressable market (TAM).
Yet, industry analyst Gartner also suggests low market adoption, predicting that only 33 percent have migrated – while including the midmarket in its calculations.
Meanwhile, CCaaS growth has slowed after it peaked during the COVID-19 pandemic.
Such slow growth has led to talk of financial instability across the CCaaS market – with Five9 one of the notable outliers, consistently achieving double-digit revenue growth.
Indeed, in the earnings call, Burkland revealed that Five9’s revenue had grown by 16 percent year-over-year (YoY) last quarter.
Convinced that CCaaS growth will accelerate again and bolster these numbers further, the CEO points to three critical market trends.
First, Burkland noted: “Companies are enthusiastically pursuing digital transformation initiatives to enhance customer experience, cut costs, and increase revenue.
Supporting this notion, Grand View Research suggests that the global digital transformation market will grow at a compound rate of 26.7 percent from 2023 to 2030.
Next, the CEO highlighted how prominent legacy contact center providers are encouraging customers to make the shift. Indeed, Burkland stated:
Enterprises are developing plans in a greater sense of urgency to replace their on-premise contact center solutions as legacy vendors have retrenched and slowed or even stopped development in some cases.
Genesys is the obvious example here, with the provider publicly stopping its legacy innovation last year and pumping all R&D resources into its Cloud CX offering.
Yet, Burkland also notes how Avaya – which works with 90 of the Fortune 100 – is trimming its on-premise portfolio.
Indeed, he shared a $2.3MN – in annual recurring revenue (ARR) – customer win with a healthcare insurance organization that shifted from an “Avaya on-premise version that was being end-of-lifed.”
Such actions may well inspire further shifts to CCaaS. Yet, perhaps the primary driver will be AI.
“AI is becoming an even more important catalyst for enterprises to shift to the cloud,” said Burkland while noting how it’s allowing Five9 to broaden its business with existing customers.
“A good portion of our innovation continues to be centered around our AI and automation portfolio, and we are seeing significant traction as a result of this innovation,” continued the CEO.
For example, our professional services team worked on more than 250 AI deployments during the last quarter.
These deployments will cross Five9’s deep portfolio of AI tools, which includes virtual agents, workflow automation, and conversational intelligence solutions.
Yet, agent-assist tech proved a primary driver of those 250 deployments – a trend sweeping the industry and one that will likely give CCaaS players a timely boost in 2024 and beyond.
Five9 Agent-Assist Bookings Increase By 150 Percent YoY
Celebrating a 150 percent YoY growth in agent-assist bookings, Mike Burkland praised the success of customer trials for its new AI Summaries solution – which comes part and parcel.
Sharing how this works, Dan Burkland, President & CRO of Five9, said:
I can take the transcription, I can summarize it in about three seconds, I can deliver that summary back, and I can pump it straight into the CRM.
“The agent tomorrow can look at that summary of what happened in today’s call and make a better judgment, getting right to the point much quicker. So, it cuts back on wrap-up time for the agent.”
While this is only one example of how Five9 is leveraging generative AI, it’s a low-hanging fruit use case that lowers handling time safely and improves agent experiences.
In doing the former, it offers another example of how agent-assist suites bolster contact center efficiency, with service operations harnessing such suites 20 percent more likely to be fully staffed – according to recent Metrigy research.
These low-hanging fruit use cases are helping Five9 to expand its business with existing customers.
“[We’re] starting to really see an appetite for doing more than just dipping their toe in the water,” the CRO concluded.
For more from Five9 into the contact center of the future – and the role of voice within it – check out our recent webinar: Voice 2.0 and the Rise of Intelligent Voice In CX