Specialist
Former VP at Amazon Web Services (AWS)
Agenda
- Amazon Connect’s (NASDAQ: AMZN) operating environment – TAM sizing for CCaaS and expected demand trends for next 12-18 months
- Main competitive differences by product and go-to-market vs Twilio Flex (NADSAQ: TWLO), Microsoft (NASDAQ: MSFT) and pureplays
- Evolving importance of CRM capabilities as seen via customer profiles and likelihood of competing more with Salesforce (NYSE: CRM) or Hubspot (NYSE: HUBS) over time
- 2022 outlook and beyond – assessing potential impact of Microsoft entering the CCaaS market and potential M&A dynamics
Questions
1.
What is the best way of breaking down or framing the CCaaS market’s TAM, which probably increasingly even includes customer-relationship-as-a-service? Third-party market research suggests a pure-play TAM of USD 24bn-25bn for CCaaS, but even players such as Five9 are starting to include additional functions in and around AI and automation, and that company now touts a USD 59bn market.
2.
You could break down the constituent parts of the TAM by considering it as a set of global agents that you can tack a price per month on to get to a revenue target. I’ve read market estimates that there’s around 15-17 million call centre agents. Do you resonate with that number? What are your thoughts on agent growth or detraction as more cloud-based services optimise the way they do business?
3.
What other existing product sets are similar to the CCaaS product suite, considering the more sales-exec-oriented seat base? Do you think there’s a brand-recognition issue when you move outside traditional call centre segment, where they might think more of a Salesforce CRM or even more tech-based solutions such as LivePerson?
4.
How do you expect the market opportunity to break down across SMB, mid-market and enterprise? Gartner might have stuck to the traditional contact centre opportunity in its estimates, so its numbers might differ from yours. It talks about a less-than-50-agent seat opportunity as one-quarter of the market, 500-plus agents as another quarter of the market and that middle sweet spot of 51-500 as half of the market size.
5.
What products resonate at the SMB level? Is it the simple call-routing dynamic, customer-facing chatbots on the website, or even just knowledge-based workloads that assist with customer engagement? What do you think has tapped into the call routing?
6.
Five9 CEO Rowan Trollope talks about USD 400-500 seat opportunities that bake in a lot of analytics. Do you find that those solution types aren’t really attractive at the SMB level, perhaps due to budget sizes?
7.
Increased digital and AI-oriented CCaaS and customer-engagement-as-a-service has introduced the notion that the human element is not as necessary. How true do you find that to be? Do you expect the human seat base to reduce due to the introductions of IVA [intelligent voice automation] and full-fledged virtual agents?
8.
Cisco and Avaya talk about nine million and six million seats that they represent from an agent base. This is purely to the traditional contact centre side of the market, but that’s a vast majority of the global seat base. They seem to be the players with the most to lose from cloud adoption. How slow do you expect companies’ churn rates to be from what’s been on-prem or hybrid cloud?
9.
The CCaaS market seems to have been born with per-seat pricing, where there are minimum commitments based on an expected consumption level, after which overage multipliers were placed on the customer if consumption limits were exceeded. Now there are companies such as Twilio and Amazon with much more pure-play consumption-based pricing. How do you expect customer preferences to evolve? Is consumption-based pricing accretive to exactly what can be gleaned from the customer? Consumption is increasing for many of the reasons you already mentioned.
10.
Is the increase of the pure consumption-based pricing-as-you-go model causing response from the pure plays who have been upfront plus and over into true-up? How much longevity is there to true-ups? Is that necessarily going away without any increase on upfront minimum commitments?
11.
Do you think flexible staffing elements allow Amazon Connect to be equally well-positioned across customer sizes? Alternatively, do you think it resonates better or worse with SMB vs mid-market vs large enterprise?
12.
The biggest comparable solution to Amazon Connect seems to be Twilio Flex. What technical nuances could you outline between the two? I’ve heard about factors such as spinning up global availability, the fact that Amazon is written on a Lambda function and Amazon’s ability to tap into its enterprise sales team, or at least its rolodex.
13.
Where do you think Amazon Connect is lacking or differentiated vs the broader market across telephony and routing, IVR, ACD [automatic call distribution] and WFO [workforce optimisation]?
14.
Do you expect many future generations of Amazon Connect’s products and solutions to be very AWS [Amazon Web Services]-focused vs multi-cloud in fashion, given that it’s connected into the broader AWS ecosystem?
15.
How do you place the CDP [customer data platform] efforts in the broader market? Twilio has the Segment acquisition, while Amazon is organic and its customer profiles add on to the broader Amazon Connect ecosystem. What about Salesforce CRM and HubSpot? Is this complementary or different vs potentially displacing customer profiling that already exist?
16.
In a direct competition, who would you expect to win out between Amazon Connect and Twilio Flex?
17.
I read an estimate of USD 230bn total contact centre spend, much of which is traditionally labour-oriented. Did you suggest that’s grown even higher, probably due to the more distributed workforce instigated by coronavirus recovering more dramatically?
18.
Is there a big tech lead for more best-of-breed AI solutions that have been focused there from the get-go? Even on a per-channel basis, there are AI tech solutions such as LivePerson and Brightcove. What makes you think the CCaaS vendors, or the companies that started with the traditional CCaaS side of things will be able to partake in the new tailwinds?
19.
Do you expect any further M&A? You mentioned Amazon Connect, Alexa and the WFO solution set, which I know is also hard to stand all the way up on your own. What other gaps might dictate product-based M&A over the next few years?
20.
What do you expect an increased Microsoft focus on this sector to do to the landscape? The company announced its intentions to roll out its own full-fledged CCaaS product at its Ignite conference.
21.
What’s happening with the telephony layer for Amazon?
22.
Is there anything you think we haven’t covered or do you have any closing comments?
