The Frost Radar for the European CCaaS Market 2023: Top Takeaways

Genesys, NICE, and Five9 perform well in this continent-specific CCaaS study

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Contact CentreInsights

Published: July 5, 2023

Charlie Mitchell

The Frost Radar for the European CCaaS Market 2023 is a study by industry analyst Frost & Sullivan that aims to identify leading vendors across the space and continent.

In doing so, it compiles a list of twenty prominent CCaaS providers operating in Europe, showing leadership in growth and innovation.

From there, the analyst weighs them up and places them on the following matrix.

The Frost Radar for the European CCaaS Market 2023
The Frost Radar for the European CCaaS Market 2023

While it may miss a few notable vendors – including AWS, Talkdesk, and Twilio – Frost & Sullivan has uncovered many insights into individual vendors and the industry as a whole.

Here is a set of the most thought-provoking takes that the analyst divulges.

The European CCaaS Market Is Extremely Fragmented

More than 100 CCaaS vendors operate throughout the continent, according to Frost & Sullivan. That highlights just how crowded the market is and underlines the intensity of competition.

That competition pits global giants against European leaders and their smaller, nimble counterparts.

These more niche players often perform well in Europe, as success boils down to more than innovation. Instead, vendors must understand and meet country-specific and regional requirements, which vary considerably.

Such requirements include understanding specific business practices, languages, cultures, and tech adoption rates.

As a result, flexible vendors that can adapt accordingly are more likely to succeed in the market – which – as of 2022 – is worth $1.4BN.

Genesys, NICE, and Five9 Lead the Way

Genesys performs best along the Growth Axis on the Frost Radar, which reflects its leading revenue generation capacity and business presence across the continent.

The vendor may also leverage its legacy customer base and strategic partner ecosystem – which is gaining momentum, as per Frost – to cement this status.

Meanwhile, Five9 and NICE seemingly score best in the innovation index.

As Five9 continues its international expansion, this perhaps highlights the impact of its new research and development (R&D) center in Porto, Portugal.

Indeed, in the Iberian region, Five9 is having particular success in landing customers – according to Frost – alongside the UK. The latter is a market in which NICE also thrives.

It perhaps does so – in part – due to its expertise and portfolio in WFO and RPA. That allows NICE to bring new native capabilities to its CCaaS platform that offer critical differentiators.

Odigo and Puzzel Excel In Europe

While Odigo and Puzzel are not names that appear in the Frost Radar across other regions, this European edition places them among the market leaders.

In Odigo’s case, this is primarily due to its large customer base in France, one of Europe’s two biggest CCaaS markets (the UK is the other).

Yet, it’s also expanding into other realms of Europe. Indeed, Frost notes that Odigo is an excellent example of a vendor that harnesses its expertise of unique European requirements to lead its market rivals.

The vendor’s close relationship with prominent European consultant Capgemini and numerous deployment modes are other likely drivers of its robust continental presence.

Meanwhile, Puzzel benefitted from the rapid penetration of CCaaS in Nordic countries – where it is headquartered. Yet, it is also making gains in countries such as Belgium and The Netherlands.

However, the report also pays homage to its innovation, with Puzzel recognized as the most innovative European-founded CCaaS provider – as per Frost’s Innovation Index.

The European and North American Markets Clash

Like the European CCaaS space, the North American market has many competitors. Yet, the same three vendors lead the way across the respective Frost Radar reports.

Indeed, here is a comparison of the latest studies across both continents.

Frost Radar CCaaS comparisons

In each edition, Genesys, NICE, and Five9 seem closest to the outer circle, seemingly underlining their leadership status.

Nonetheless, those behind them have different names. Instead of Odigo, Puzzel, and Content Guru in Europe, they are Alvaria, LiveVox, and Thrio in North America.

Interestingly, while Dialpad and Cisco feature in both reports, the vendors seemingly have a much more significant market presence in North America than in Europe.

Alternatively, Vonage is more widely utilized in Europe – likely because the vendor’s CCaaS solution stems from its 2018 acquisition of NewVoiceMedia, a UK-based business.

The Rise of CPaaS Has Impacted the CCaaS Market

CPaaS is a market that has almost become commoditized. As such, many providers are delving deeper into CCaaS, keeping CPaaS on the backend to develop a more flexible cloud contact center platform. In doing so, they squeeze the market further.

Frost somewhat notes this trend, suggesting that 8×8, Dialpad, and Vonage have taken this approach – which is influencing the direction of the market.

Moreover, CPaaS is an attractive tool for CCaaS vendors in its own right, as it allows legacy businesses to move their digital channels to the cloud without touching the telephony platform and sensitive workloads.

Mergers & Acquisitions Are Likely

As CPaaS vendors shift closer to CCaaS, so do CRM and UCaaS providers. Frost anticipates that such convergence may lead to an uptick in merger and acquisition (M&A) activity across the space.

That prediction is not new. Yet, so far, the market has witnessed little of this – minus Enghouse Interactive sweeping up Lifesize’s assets as it files for bankruptcy.

However, more merger murmurs are starting to bubble to the surface – with the rumored RingCentral-8×8 roll-up perhaps the most prominent.

Another often-debated candidate for M&A is Avaya, with some analysts highlighting the vendor as a possible acquisition target thanks to its significant legacy base and post-bankruptcy debt reductions.

Nevertheless, these are just rumors, and with speculation of financial troubles at some CCaaS vendors, mergers may only come after brands experience turmoil, like Avaya and Lifesize have.

Many Vendors Wish to Expand CCaaS Deployment Options

Interestingly, the three leading vendors – Genesys, NICE, and Five9 – only innovate and deploy in public cloud environments.

Yet, Frost notes that vendors – no matter their size – more CCaaS players are attempting to expand their deployment options across public, private, and hybrid clouds.

While this may slow innovation, some larger enterprises may choose a private or hybrid cloud to meet regulatory requirements and keep control over particular workloads.

Odigo is one such vendor that offers CCaaS across each cloud – which is perhaps another reason why the vendor has enjoyed success in Europe.

In noting this trend, Frost also highlighted how more providers are adopting micro-service architectures to quickly drop innovations into their CCaaS platforms.

The Appetite for CCaaS Is Growing

Despite the heavy competition in the CCaaS space, lots of European business is up for grabs – suggests Frost & Sullivan.

Indeed, the analyst notes that the market will reach a $1.6BN valuation in 2023 across the continent, up from $1.4BN in the previous year.

Increased innovation – perhaps utilizing generative AI – may help providers secure a more significant piece of that pie.

Nonetheless, vendors shouldn’t discount the value of a local presence – both direct and through a channel partner network – as an essential factor to their future success.

 

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Brands mentioned in this article.

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