Another quarter marked another series of CCaaS megadeals for NICE, as CEO Barak Eilam declared: “We are outpacing the growth of the market.”
Two eight-digit customer wins propelled this growth. The first was with a North East energy firm, which will replace several legacy systems and standardize its contact center operations with CXone.
Shedding more light on the deal during an earnings call, Eilam stated:
We won the deal for our domain expertise, our success with other utilities companies, the unmet scalability of CXone, and our ability to deliver conversational AI as an integral part of the platform.
The next deal is with a medical logistics company, again replacing a legacy contact center software.
Eilam credits the win to NICE’s “proven track record for large-scale innovation.”
Fuelling this innovation is $1.7BN of cash in the bank and $0.5 billion in annual cash flow from operations. According to the CEO, this allows NICE to think and operate more strategically and – ultimately – more dependably.
“[Businesses] want to partner with a vendor that doesn’t just speak about innovation, but can also deliver and have the means to deliver it,” Eilam says.
In doing so, he underlined NICE’s commitment to R&D and somewhat questioned that of its CCaaS competitors.
Eilam: “A Lot of Companies Around Us Are Struggling”
Much of the news in the CCaaS space has centered on Avaya’s Chapter 11 bankruptcy. Yet, when asked to comment on the news, Eilam took a much broader view. He said:
We see a lot of companies around us that are struggling, have never been profitable, and have poor unit economics.
“When you don’t have this muscle and all of a sudden, you decide to focus your efforts on the bottom line, and you start to cut. You start to cut on your R&D; you start to cut on your go-to-market. And that impacts customers.”
The CEO continued by suggesting that many of NICE’s market rivals carry significant debt, which is proving tricky to service.
“Because of that, they have to take tactical decisions instead of strategic decisions that hurt their customers… Eventually, customers see through that and decide to partner with us,” he stated.
Indeed, NICE has reported an uptick in customers returning to the business less than a year after selecting a competitor’s platform and “experiencing disappointment.”
Moreover, the CEO added:
After a disappointment of choosing a vendor that is not the leader or maybe was selected for the wrong reason, they don’t want to fail twice.
Such a reputation may pave the way for further growth, especially with Eilam suggesting that 80 percent of the industry has yet to shift to CCaaS.
Yet, the provider is not sitting around, waiting for CCaaS to become the norm. It’s also building stronger bonds with its existing customers and developing new AI innovations.
AI Is Enabling a Land & Expand Strategy
“We are already seeing many examples of existing customers expanding into our AI-driven CX solutions. And, as a result, our ARR (annual reoccurring revenue) from these customers is going between 3x to 5x,” stated Eilam.
High labor costs are playing their part in driving this new demand. As such, the appeal of conversational AI is rising alongside interest in automation tools.
Noting this, Eilam argued:
The winner of AI-driven CX must have a well-adopted platform with a full suite of solutions, massive amounts of historical and current fully labeled, high-quality data, and deep CX-focused domain expertise… Generic AI simply doesn’t work.
Indeed, across the CCaaS space, the focus has turned to creating practical AI applications that – above all – deliver ROI.
Generative AI will play a significant role here, which has helped drum up interest in AI and alert CX leaders to its potential for enhancing their operations.
CX Today readers can attest to that, with 81 percent highlighting how the advent of ChatGPT encouraged a surge in AI interest.
Eilam hopes to build upon this momentum with the recent launch of Enlighten Actions – a GPT-powered solution that auto-generates customer responses for agents to review.
The tool now becomes part of NICE’s Enlighten AI portfolio, which many new CXone customers chose to utilize last quarter.
One such customer in digital communications implemented Enlighten AI to streamline multi-channel customer journeys, enabling attended and unattended interactions.
Another is a transportation company, which will leverage the portfolio to improve its data-driven decisioning and, according to Eilam, “Take further market share from their competition.”
These deals showcase the Enlighten portfolio’s depth and are just two of the many seven-figure customer wins NICE secured last quarter.
Along with the eight-digital deals above, such wins enabled NICE to capture $368MN in cloud revenues last quarter, up 25 percent year-over-year.
Much of this stemmed from North America, which now accounts for 83 percent of total revenue.
Yet, the vendor also recorded double-digital cloud growth in EMEA and APAC.