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Summary

In January 2016 Nice announced its forthcoming acquisition of the speech analytics vendor Nexidia for $135m. Although Nice already has its own speech analytics solution, the acquisition provides it with new cloud capabilities, the ability to reach a different set of customers, and a stronger market position.

Nice gains a powerful position in the customer interaction analytics space

The market for customer interaction analytics is growing rapidly; Ovum estimates that contact centers will spend $309m globally on these solutions in 2016. This growth is being fueled by enterprises’ desire to understand different stages of the customer lifecycle, including customer service. Although interactions via digital channels are increasing, the phone still plays an important role in support. What has changed is that businesses now need to link customers’ voice calls with digital interactions in order to understand journeys and predict customer needs. Enterprises need to know which channel is most relevant for their customers in order to tailor support options. This need to better comprehend customer behavior explains why Nice continues to invest in its analytics and voice of the customer portfolio. Following its previous acquisitions of Causata and Fizzback, Nice’s acquisition of Nexidia’s speech analytics technology will give it a number of competitive advantages.

Nice does not currently offer cloud deployment options for its analytics customers. It stands to gain cloud expertise from Nexidia, as well as technology that is designed to be deployed in this model. This will benefit organizations that are shifting their contact center tools to the cloud and want more flexible pricing options.

Few stand-alone customer interaction analytics players remain in the contact center space, CallMiner and Clarabridge notwithstanding. Acquiring Nexidia gives Nice an advantage over workforce optimization and contact center players that do not have strong analytics portfolios in-house. These players will have to partner with Nice to ensure that their customers have access to speech analytics tools.

A large majority of Nice’s existing customers are those using its recording, quality monitoring, and WFM tools to improve contact center efficiency. One of the main uses of its speech analytics application today is in improving quality monitoring insight. Nexidia will help it to reach new customers outside of this traditional contact center base and deliver packaged applications around customer satisfaction as well as efficiency.

Although it intends to maintain a vendor-agnostic approach for Nexidia’s speech analytics, Nice will gain new customers to which it can upsell its existing portfolio of workforce optimization tools.

Ovum expects Nice’s biggest challenge to be how to brand, market, and integrate its analytics products. Enterprises may question the duplication of analytics tools and Nice must clearly package its offerings for specific business needs or customer sets in order to avoid confusion. It should use Nexidia’s tools to offer competitively priced, quick-to-deploy analytics packages in the cloud that are differentiated from its existing solutions. It needs to quell market concerns around the complexity and cost of speech analytics.

Appendix

Further reading

Adaptive WFO represents a paradigm shift, melding analytics with agent personalization, IT0020-000169 (December 2015)

2016 Trends to Watch: Contact Centers, IT0020-000161 (October 2015)

Implementing Customer Interaction Analytics to Manage Customer Complaints, IT0012-000140 (October 2015)

Author

Aphrodite Brinsmead, Principal Analyst, Customer Engagement

aphrodite.brinsmead@ovum.com

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