The State Of The WFO Market

Dick Bucci, Pelorus Associates
Dick Bucci, Pelorus Associates

Dick Bucci has a long history researching and reporting on contact center applications. As the founder and sole employee of Pelorus Associates, he has authored 17 comprehensive reports on contact center applications, principally interaction recording and workforce management. Each year, Pelorus Associates releases a new report based on exhaustive secondary research and interviews with leading industry executives.

Bucci’s latest report, Understanding the Global Market for Workforce Optimization Solutions, is a comprehensive analysis of the size, structure, and underlying market forces that drive demand for workforce optimization systems. The report consists of 129 pages and 60 tables organized by chapters which address trends, drivers and constraints, market characteristics, market share and forecasts, and detailed profiles of eight leading vendors.

In this Q&A, Bucci offers a few highlights from his research.

Q – How do you define workforce optimization?

To quantify demand for WFO solutions we need to use a very precise definition of a market participant. Pelorus Associates has always defined a complete WFO solution as consisting of interaction recording, quality management, workforce management, performance management, e-learning or coaching, speech analytics, and voice of the customer software. The WFO applications must be closely integrated with each other and share common databases and user interfaces. Each qualified market participant in our research offered at least five of the above seven applications. Eleven vendors met these criteria.

Q – What is the overall health of the WFO market?

Demand is very strong and will continue to grow. The value of vendor level revenue in 2016 was $1.5 billion. We believe this grew to $1.7 billion in 2017 and will continue to grow to $2.3 billion in 2021 or an average growth of approximately 8% per year. The Big Three—Aspect, NICE and Verint—account for 90% of the market. The fastest growing vendors are Calabrio and ZOOM International.

Q – What are some of the most important forces driving the growth of the WFO market?

Our research identified 10 key factors that are driving growing demand for WFO solutions. Three of the most important are: (1) the continuation of the long-term trend toward differentiating based on the quality of customer care, innovative applications and improved technology; (2) the desire to save money and improve efficiency within contact centers; and (3) broader availability of the cloud acquisition option.

Also very important, and a core driver of all contact center solutions, is growth in the agent population. During the recessionary years of 2008–2011, agent population declined. For the past five years, we have seen consistent growth in agent employment. We estimate that the global agent population is approximately 9.6 million with North America accounting for 39% of the total. (SEE THE TABLE BELOW.)




% CHG.

North America (US and Canada)




Europe, Middle East, Africa




Rest of World








Source: U.S. Bureau of Labor Statistics,2014 European Contact Center Benchmark Platform, Pelorus estimates

Q – How has the growing maturity of the cloud model impacted the market for WFO products?

It’s a two-sided sword. The cloud model spurs market growth by attracting new customers, particularly smaller contact centers which otherwise would not be able to finance a comprehensive WFO solution, and businesses with sharp seasonal variations. It also produces a short-term sales boost by accelerating the replacement cycle. We estimate that about 8% of 2016 WFO revenues were from cloud subscriptions. This more than doubled in 2017, largely because of the acquisition of InContact by NICE Systems.

However, there are downsides. Building out a private cloud infrastructure is extremely costly. The expenses are front-ended while the cash flow is prorated over time. Vendor insiders tell us that it takes about three years to break even on a new cloud account. Hosting WFO applications over public cloud services mitigate much of the front-end costs but comes with its own limitations such as the requirement to rewrite software to meet the specifications of Infrastructure as a Service (IaaS) providers. Largely because of the challenging business case, several WFO vendors have elected to partner with CCaaS providers.

Q – What are some of the innovative actions vendors are taking to expand their market share?

Vendors are expanding the applications that traditionally define the WFO suite. Leading vendors have added many applications beyond these basics. Examples include virtual assistants, gamification, automated agent scoring software, decision guidance, robotic process automation, voice authentication, knowledge management, advanced analytics, and a host of software upgrades, cloud conversions and new services.

Another effective tactic is “bundling” related applications. Examples include:

  • Recording platforms sold with embedded quality management and speech analytics
  • Workforce management combined with performance management and gamification
  • Speech analytics combined with voice of the customer.
  • Speech analytic s bundled with desktop analytics

Q – Where do you see the future of WFO?

One of the key questions we sought to resolve in our research was how to differentiate the traditional workforce optimization market from the emerging market for customer engagement solutions (CES). Those that choose to compete in the CES arena are re-examining their product roadmaps, distribution strategy and messaging to encompass the CES framework. In the case of the largest players, this involves acquisitions of companies that have strength in digital channels, consumer journey mapping and deep analytics. NICE and Verint have changed the names of their business reporting segments. In 2017 NICE changed its largest reporting segment from “Customer Interactions Solutions” to “Customer Engagement Solutions.” In August 2016, Verint changed the name of its “Enterprise Intelligence” reporting segment to “Customer Engagement.” While OpenText does not report results by segment, the WFO business resides within the Customer Experience Management and Analytics business unit.

Dick Bucci is the Founder and Chief Analyst at Pelorus Associates, which provides market research and consulting services to the contact center industry.

– Reprinted with permission from Contact Center Pipeline,

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