Frost & Sullivan predicts that Asia Pacific contact center applications market will be saved by domestic demand. It finds that the market earned revenues of over 675.0 million dollars in 2009 and estimates this to reach 1.25 billion dollars in 2016.
Contact center spending took a hit across the region in 2009. Some markets maintained investments in customer facing applications, while others suffered cutbacks and freezes on technology spending. The expanding customer base for banking and telecom sectors in China and India has spurred demand for
self-service applications.
Hosted contact center and self-service applications have gained traction as they help contain costs. A demand upswing from small and medium enterprises (SMEs) in verticals such as government, retail, travel, and hospitality has spurred growth in the region.
Domestic demand from some markets in the region helped to offset the decline at an Asia Pacific level. Domestic demand in smaller markets such as Vietnam and Indonesia remains largely untapped. These markets will contribute significantly in the future as competition intensifies and the focus on customer service increases, according to the analysts.
"Domestic demand has been particularly important in underpinning the market’s performance this year," said Frost & Sullivan Senior Research Analyst, Kunal Kakodkar, in a statement. "The tide of IP migrations and the strong growth potential of the unsaturated markets in the region have been responsible for mitigating some of the losses suffered due to the global financial crisis."
The economic downturn affected spending in the banking and financial services and insurance (BFSI) sector as well as in many enterprises in Asia Pacific. The slump in outsourcing demand from the United States and Europe affected hubs such as India and the Philippines. Cutback in technology spending due to the economic climate in 2009 was the major cause for the contact center applications market’s poor performance. As the effects of the slowdown trickled down from BFSI to other verticals, outsourcing from the west and domestic spending were reined in.
Low migration levels to full IP environments invariably due to budget cuts and security concerns had restrained market momentum. Mature markets such as Japan, South Korea, and Australia offer limited scope for organic growth. With the world economy entering a protracted phase of recovery, spending will resume and the markets will return to growth.
However, intensifying focus on cost-saving and boosting productivity will persist. This means that segments such as agent performance optimization, self-service, analytics, and hosted applications will see increased growth in the future.
"Hosted contact center solutions see strong traction in some markets in Asia Pacific, and a snowball effect is expected in other markets in the region as enterprises opt for the pay-per-use model over the high cost of purchase of advanced applications," said Kakodkar. "Hosted solutions have already made inroads into ANZ, India, Japan, and the Philippines."
In related news, Frost & Sullivan honors Aryaka Networks for "Product Innovation of the Year" in WAN optimization. As part of its award criteria, Frost & Sullivan ranked providers on five metrics -- product innovation, leading-edge technology, value-added features, customer ROI, and potential for customer acquisition and penetration -- and Aryaka outranked all competitors across these categories.