Riding the anticipated wave of cloud computing adoption, the South African hosted contact centre market is set to expand from $3,2-million in 2012 to $47,8-million by 2018, according to new analysis from Frost & Sullivan.
In its latest report, Cloud Networking: A Growing Opportunity for CSPs in South Africa, the organisation says that the increasing prominence of cloud computing has given enterprises the option of buying IT infrastructure on a pay-as-you-go basis. Under this model, enterprises will be able to easily scale their infrastructure up or down based on business needs.
It will also allow them to change investment models from capital expenditure (CAPEX) to operational expenditure (OPEX). In the midst of this envisioned transformation, Frost & Sullivan says communication service providers (CSPs) are seeking to expand their roles
beyond mere connectivity, and offer non-traditional IT solutions as part of their portfolios. In the cloud value chain, CSPs are evolving from being cloud carriers to cloud providers.
“Of all market participants in the cloud services value chain, such as hosting providers, IT service and equipment suppliers, over-the-top service providers and application providers, CSPs are best positioned to successfully deliver on the cloud computing vision,” says Frost & Sullivan’s ICT industry analyst, Ishe Zingoni.
“Through their cloud services offerings, CSPs have the power to help their customers evolve and take advantage of the changing communications marketplace.”
The current move in South Africa towards hosted, cloud-based contact centres represents a unique opportunity for CSPs to grow and protect their revenue streams, where they are currently challenged by tremendous pricing and margin pressures. This can, however, be offset by offering higher margin products and value-added services beyond commoditised telephony.
Most contact centres in South Africa are, at present, using premises-based systems, with only 1,8% under the hosted model. However, given the high levels of interest and enabling market conditions (such as declining bandwidth costs), it is anticipated that the market will achieve high levels of customer cross over/conversion to the hosted environment in the next few years.
“Hosted contact centres represent a unique opportunity for CSPs with tremendous long-term growth potential,” says Zingoni.
“The main opportunity lies in the small- and mid-market segments, which will experience the greatest uptake due to the attractiveness of the OPEX model as opposed to the CAPEX model. For small contact centres, typically those that are budget constrained, there will be an additional benefit of gaining access to the latest, and more cost-effective, technologies and upgrades.”
As the market matures, there will be a steady increase in the average size of contact centres using the hosted systems, as larger enterprises seeking to reduce their total cost of ownership (TCO) migrate to the hosted environment. “CSPs can have a central role in serving the marketplace with cloud services,” adds Zingoni.
“Their success will require them to initiate change in their service strategies and marketing approach, as well as underlying service delivery (network and IT) architectures. While CSPs will eventually build their own IT capabilities, strategic partnerships will be crucial in the interim.”
It will also allow them to change investment models from capital expenditure (CAPEX) to operational expenditure (OPEX). In the midst of this envisioned transformation, Frost & Sullivan says communication service providers (CSPs) are seeking to expand their roles
beyond mere connectivity, and offer non-traditional IT solutions as part of their portfolios. In the cloud value chain, CSPs are evolving from being cloud carriers to cloud providers.
“Of all market participants in the cloud services value chain, such as hosting providers, IT service and equipment suppliers, over-the-top service providers and application providers, CSPs are best positioned to successfully deliver on the cloud computing vision,” says Frost & Sullivan’s ICT industry analyst, Ishe Zingoni.
“Through their cloud services offerings, CSPs have the power to help their customers evolve and take advantage of the changing communications marketplace.”
The current move in South Africa towards hosted, cloud-based contact centres represents a unique opportunity for CSPs to grow and protect their revenue streams, where they are currently challenged by tremendous pricing and margin pressures. This can, however, be offset by offering higher margin products and value-added services beyond commoditised telephony.
Most contact centres in South Africa are, at present, using premises-based systems, with only 1,8% under the hosted model. However, given the high levels of interest and enabling market conditions (such as declining bandwidth costs), it is anticipated that the market will achieve high levels of customer cross over/conversion to the hosted environment in the next few years.
“Hosted contact centres represent a unique opportunity for CSPs with tremendous long-term growth potential,” says Zingoni.
“The main opportunity lies in the small- and mid-market segments, which will experience the greatest uptake due to the attractiveness of the OPEX model as opposed to the CAPEX model. For small contact centres, typically those that are budget constrained, there will be an additional benefit of gaining access to the latest, and more cost-effective, technologies and upgrades.”
As the market matures, there will be a steady increase in the average size of contact centres using the hosted systems, as larger enterprises seeking to reduce their total cost of ownership (TCO) migrate to the hosted environment. “CSPs can have a central role in serving the marketplace with cloud services,” adds Zingoni.
“Their success will require them to initiate change in their service strategies and marketing approach, as well as underlying service delivery (network and IT) architectures. While CSPs will eventually build their own IT capabilities, strategic partnerships will be crucial in the interim.”