Having unified communications (UC) has become essential to business success. According to a Five9 customer service report
, 97% of business customers say that a positive customer service experience is at least somewhat likely to make them do business with a company. 87% of customers say that great customer service is important when deciding to do business with a company. Implementing high-quality unified communications is the foundation of a great customer experience. Zoom wanted to aquire Five9 to directly address these customer needs.
“We are continuously looking for ways to enhance our platform, and the addition of Five9 is a natural fit that will deliver even more happiness and value to our customers.” -- Eric S. Yuan, CEO and Founder of Zoom
Who is Zoom?
Unless you were on a trek through the wilderness for the last year, you have probably heard of Zoom
. In our rush to work and socialize remotely, Zoom has become a verb: “I will Zoom you this afternoon, and we can talk more.”
Zoom was founded by Eric Yuan, the driving force behind WebEx. Launching as an easy-to-use video conferencing tool in 2013, Zoom was in the right place at the right time when COVID-19 forced so many of us into remote work. Zoom immediately replaced the conference room as the place for meetings.
Anticipating the end of its pandemic boom, Zoom immediately began adding to its offerings to appeal to enterprise customers as a permanent communications solution. Since July 2020, Zoom has added Zoom Rooms, Zoom Phone, Zoom for Home, Zoom App Marketplace, and On Zoom, growing the company from a video conferencing tool to a full-blown UCaaS provider in a short time.
”Zoom is now the video communication platform of choice for federal governments, tech startups, religious communities, and of course regular people looking to chat — and even party — with their friends and family.” -- Business Insider
Who is Five9?
Founded in 2001, Five9
is one of the original cloud-based contact center providers. The allure of CCaaS is that once a business account is established, an agent simply connects to the internet, logs on, plugs in a headset, and is ready to go. Five9 allows agents and sales associates to engage with customers via voice, SMS, chat, email, social, video, and more.
”Five9 provides everything you need to run an effective inbound, outbound, or blended omnichannel contact center.” -- Software Connect
Five9 includes all the contact center features you would expect to find in high-end on-premise solutions—including skills-based routing, inbound and outbound calling, IVR, agent scripts, recordings, and post-call surveys—but giving that power to a remote agent. Five9 also includes workforce management, interaction analytics, quality assurance, and performance management for the back office.
A key differentiator that separates Five9 from its competitors is Five9’s AI integration. The learning AI can assist with various tasks, including skills-based call routing, smart IVR, and agent assistance.
Why Did These Companies Want to Merge?
Both Five9 and Zoom are successful companies. Each is a leader in its respective market.
So, why would these two companies consider a merger? What benefit is there that is worth the increase in complexity and loss of focus?
The simple answer is: customers are demanding it.
Enterprise customers are looking for more than a phone system or call center—they need unified communications solutions.
Companies want seamless communication between customers, service agents, and subject matter experts to quickly resolve a customer’s issue. They want agents to have easy access to customer information stored in a CRM to better understand the customer’s needs. They want all employees to transition from a call to video to screen sharing as needs change.
“The trend towards a hybrid workforce has accelerated over the last year, advancing contact centers’ shift to the cloud and increasing demand by customers for customized and personalized experiences. Today, enterprises not only need to enable customers to engage via their preferred channel, but they also need to empower their teams to accomplish more and do so with empathy, purpose, and connection. We truly believe that together, we will enable customers to reimagine the way they do business and deliver exceptional results.” -- Eric Yuan, Zoom CEO
The two companies have seen the demand for unified communications for quite some time. This merger was not the start of the collaboration. The failure of the merger to go through to completion is not the end of the partnership. Zoom and Five9 already offer their customers an integrated solution, including out-of-the-box Zoom Phone integration with the Five9 contact center. Combining the companies would have made things simpler for customers, requiring a single contract with a single vendor and lessening the potential for conflict between vendors down the road. A bonus for combining two successful companies is that each gets access to the other’s customer base and sales contacts. This access could be a boon for both companies, even if no one ever buys the integrated product. By rejecting the offer, the Five9 shareholders perhaps see even larger potential for such a merger in the future.
Competitors in the UCaaS Space
Zoom and Five9 are not the only companies recognizing their customers’ needs for unified communications. Other providers offer unified systems.
“In a world defined by a dizzying mix of platforms designed to suit organizations spread across vast spaces, UC simplifies the world of work. The right UC platform gathers everything your employees need to connect, share, and work together on ideas in the same streamlined interface.” -- UC Today
Cisco, the dominant manufacturer
of network routers, has long been a powerhouse in the enterprise VoIP phone system market. Its WebEx video conference product is Zoom’s closest competitor. Now, WebEx Call Center has entered the market. Cisco is a strong competitor in the UCaaS market.
Avaya has deep roots in communications, having spun off from AT&T and Lucent Technologies. Avaya provides unified communications services to its customers. They recently established a strategic partnership with RingCentral, bringing the latest video-conferencing technology to its suite of OneCloud communications products, including OneCloud CCaaS.
8X8 was founded in 1987 and began making coprocessors and graphics accelerators for the personal computer market. In 2000, 8X8 became a VoIP service provider and was an early provider of video phone service. Through a series of acquisitions beginning in 2010, 8X8 has become a unified communications company offering a full suite of integrated communications products.
8X8 introduced the concept of XCaaS (Experience Communications as a Service). XCaaS takes the idea of unified communications to the next level by focusing on improving employee and customer experience through better communications. There is an old sales adage that you don’t sell drills; you sell holes. XCaaS focuses on the hole rather than the drill.
“With XCaaS solutions, communications and interactions are in sync, eliminating the need for the client having to retell their story.” -- Calltower
What Can UCaaS and CCaaS Providers Learn From the Attempted Zoom + Five9 Merger?
When looking at the proposed Zoom + Five9 merger along with the direction of their competitors, it is clear that those companies see a need to offer a broader range of capabilities and better integration. It may not be enough in the future to do one thing unless you do that thing exceptionally well.
“As the largest networking company in the world dedicated to real-time applications, we have the opportunity to observe many companies offering real-time applications. One of the key elements of success is a focus on Quality of Experience. In today’s world, people expect a superior experience, but they are often disappointed. The companies that can meet those high expectations have a clear advantage.”
-- Mo Nezarati, President Voice for Subspace
Listen to Your Customers
Talk with your customers to identify gaps in your current offerings. It is essential that you understand their pain points and then act to relieve them. A key data point for you is whether your customers are looking at other vendors with features that may overlap your product. For example, Zoom saw that they could lose a video or voice customer to a competitor like Cisco that offers video conferencing plus a robust contact center product.
Five9 and ICMI released a research report, The Contact Center Workforce of the Future
. The results are based on a Q2 2021 survey of 313 contact center professionals. The report covers many topics that you should be discussing with your customers and provides insights into steps you may want to consider for your product.
In the survey, 92% of respondents believed their agent-facing applications could be more effective. The sizable margin indicates that there is an overwhelming opportunity for UCaaS and CCaaS vendors. Almost all customers are looking for something better than they currently have. Among the notable survey results, the following stands out:
Over the last 12 months, 55% of contact centers experienced a higher volume of customer interactions. 47% report an increase in contact complexity. At the same time, contact centers report a 58% agent turnover rate, with the workload being the number one reason for turnover.
With call centers being squeezed from all sides, they need something to increase productivity. Many companies are looking at AI to fill the gap.
Five9’s product includes Intelligent Virtual Agent (IVA). IVA is like IVR combined with higher-level AI functionality, such as speech recognition and natural language. IVA delivers answers to common questions without engaging a live agent. Another use of AI that is seeing increasing interest is Agent Assist. Agent assist performs repetitive or mundane tasks in the background, such as looking up customer information or recording notes in a CRM while the agent focuses on dealing with the customer. Both of these capabilities reduce agent workload and frees up live agents to deal with more complex issues. You should look at your product to see how you can address these pain points by adding capabilities that increase agent productivity.
Integration of communications and information is another specific problem contact centers face. 40% of agents don’t have a single view of the customer across channels. Most contact centers today are multi-channel, meaning that they support voice and other modes of communication such as webchat and social media. The desire is to be omnichannel.
Omnichannel means that agents can move smoothly and efficiently from social media to chat to video, and more, sometimes with the same caller. However, 64% of respondents indicated that they lacked the necessary tools even to support multiple channels.
Another area of integration is bringing data into the contact center system. In the ICMI report, 37% of agents report that they don’t have adequate integration of digital and voice channels. Agents often lack contexts such as previous contacts and the customer’s level of familiarity with a product. Context information, typically stored in a CRM system, needs to be readily available to customer service agents. There is a significant market opportunity here if your product can fill this need for integration.
The ICMI report identifies just a few of the gaps that exist in many contact centers. There are many more.
Once you identify the gaps, you can work with your customers to help solve their issues. This process enables you to create a better product with features that your customers want and helps build trust and loyalty with your customer.
“80% of customers now consider the experience a company provides to be as important as its products and services.” -- Salesforce
Watch Your Competitors
You should have your own vision for where you want to take your product, but you should also be aware of what your competitors are doing. If there is a shift in the market, as we see following the pandemic and the change in remote workforces, you might want to take steps to add missing capabilities.
You can add missing capabilities by building on your solutions through acquisition, merger, or partnership. Competitors can sometimes make good partners.
It would help if you also kept an eye on your competitors' gaps. Identify capabilities with a demand that your competitors are not offering. Can you fill a need for their customers?
Strategically targeting the needs of underserved customers can make you the market leader.
Focus On What Makes Your Product Unique
The most important thing you can do is to focus on the unique value of your product. Ask these essential questions:
- Is there a particular niche that your product satisfies better than any other?
- Does your product perform better than others?
- Why would someone pay for your product instead of your competitor’s product?
A key differentiator in communications is Quality of Experience
. To ensure you offer the best QoE for your customers, ask yourself these questions:
- Are voices distorted?
- Are connections quick and reliable?
- Is video pixelated or not available at all?
These problems are most often the result of poor internet performance. As such, all providers suffer the same limitations. But what if your application could reduce lag by 80%, jitter by 99%, and virtually eliminate lost packets? Reducing lag, jitter, and packet loss could set your solution apart from your competitors. That’s where Subspace comes in.
“Thanks to the partnership between Subspace and Orange, connections can see as much as an +80% reduction in ping [time].” -- Thierry Marigny, CEO, Orange Jordan
Subspace has built a new internet for real-time applications such as communication tools. With our SaaS platform available globally for the first time, you can operate, deploy, and scale your application with the lowest latency, most reliable, and secure real-time performance. Subspace makes our private network built for real-time applications available to the world through a single API call, giving you the power to deliver instant communications that your customers demand.
Even though it was not completed, the acquisition of Five9 by Zoom would have offered more integrated capabilities from a single communications vendor. This is not likely to be the last merger in the UCaaS space. Integration benefits the customer by providing one-stop shopping and seamless communication regardless of the mode or user role.
As a real-time communication provider, you must listen to your customers. Now, more than ever before, it is essential to deliver capabilities that meet your customers’ needs to stay competitive. It is imperative moving forward that your company focus on its unique value proposition and provide your customers with the real-time experiences they expect, demand, and deserve.
At Subspace, we're in the business of enabling better real-time experiences for all organizations, whether it be for internal use, or for better experiences for your customers. Join us on our mission: Reliable voice/video, an end to latency and packet loss, and a better real-time internet