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Summary

Contact centers have been making a steady transition from premise-based call routing platforms to more flexible cloud-based tools. Although we are still early in the replacement and upgrade cycle, many legacy vendors on the premise side have struggled to develop migration strategies for their customers and road maps for their own technology development. Aspect, which has wrestled with the problem of protecting its legacy investments, reached a turning point in 2015. Its investments in cloud solution providers, particularly Voxeo, have provided a clear path to growth in 2016 and beyond.

Cloud is rivaling premise in the sales pipeline

In a recent analyst briefing, Aspect indicated that its sales pipeline had grown significantly in the second half of 2015. According to the company, roughly 42% of its January 2016 pipeline represented potential bookings from its cloud products, compared to 33% the previous year.

A similar shift can be seen in the company’s revenue performance over the last year. For the first time, bookings from cloud were larger than bookings from core premise platforms in FY15. Although premise remains a significant chunk of Aspect’s business (and will likely continue to be for some time), the current trend lines suggest that the company has found a way to balance legacy upgrades with cloud migration, something that has been difficult for some of its competitors.

The company indicated that it had multiple deals worth in excess of $1m in 2015. Of those large contracts, half were based on the company’s extensive Unified IP platform for multichannel interaction management. Many of the large deals were based on (or included) Aspect’s workforce management software solutions, indicating continued market strength in advanced optimization tools.

The company’s executives signaled continued emphasis on transitioning into a high-end/large market cloud provider in 2016. They argue that the way buyers perceive the cloud is changing from “good enough” into a legitimate, mission-critical enterprise solution that can be safely adopted by even risk-averse businesses.

The company hinted that one of its strategic goals in the coming year will be to simplify the solution choices it makes available. This will be central to the argument that cloud makes sense at the highest levels; Aspect will aim to roll together frequently used applications into coherent suites that can be easily compared side-by-side with premise offerings. Ovum expects workforce management to be a key driver in moving applications to the cloud.

Overall, this seems to be a positive time for Aspect. In discussions over the last two to three years, the company has repeatedly indicated to analysts that it needed time – and industry patience – to come to grips with a shifting technology environment and reconfigure its offerings to meet new buyer criteria. It appears that the time and acquisition resources were well spent.

Appendix

Further reading

SWOT Assessment: Aspect Hosted and Zipwire, IT0020-000147 (August 2015)

Aspect revitalizes its services with workforce optimization and cloud enhancements,” IT0020-000090 (February 2015)

Author

Keith Dawson, Principal Analyst, Customer Engagement

keith.dawson@ovum.com

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