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			Business Research: Contact Center Technology Research: Operational Intelligence Imperative Research: Business Innovation, Performance Improvement, Process Improvement Vendor Research: AIM Technology, Aspect, CallTower, Cisco Systems, Enkata, Envision, Five9, Genesys Telecommunications Lab, HardMetrics, IBM, Informiam, Inova Solutions, Jacada, KnoahSoft, Latigent, Merced Systems, Microsoft, NICE Systems, Noetica, Nortel, Oracle, Portrait Software, RightNow, Salesforce.com, Saratoga Systems, Symmetrics, Syntellect, Verint, Witness Systems
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Summary
Building a contact center architecture has always been a major issue for companies because it requires integrating several often incompatible pieces of technology. One solution is to avoid as many integration issues as possible by buying not individual best-of-breed systems but rather a more broadly functional integrated system. As the market for contact center technology consolidates, more of these integrated packages are becoming available. Ventana Research notes that this approach will not suit all companies, as many contact centers wrestle with numbers of legacy systems; it often is easier to buy point solutions than to replace the old. Verint Systems’ acquisition of Witness Systems will increase its profile as a vendor of integrated enterprise-style suites. What is uncertain is whether the market is ready for it and how competitors will respond.

Assessment
Earlier this year, Verint Systems announced that, subject to final approvals, it has acquired Witness Systems, continuing the consolidation trend in the contact center market. Over the last few years, Oracle has taken over PeopleSoft, JD Edwards, Siebel and Telephony@Work (plus numerous smaller purchases); Nice Systems has taken over IEX, Performix and Mercom; M2M acquired Onyx; Witness acquired Blue Pumpkin and Amae Software; and Opus is now part of Verint. All in all, this seems to be a race to create an enterprise-wide suite of products that will allow the new, bigger company to consolidate its position in established accounts.

Now Verint has acquired Witness. Is this good news for customers? The answer to this lies in the responses to two key questions: How will it affect the support of current systems? And what does the future hold? The vendors themselves of course will claim that it can only benefit their customers, by offering more integrated solutions from a single supplier, making support available from one source and providing more funds for R&D as the two combine efforts. All this is of interest to customers, but likely none of these issues are top-of-mind. Customers have their own businesses to run and tactical issues to resolve; we believe they are more likely to question how distracted the companies will be as individuals compete for jobs and roles in the new entity. If the customer opts for the newly crafted, more thoroughly integrated system, it must wonder how problematic it will be to be locked into one vendor and how that choice will impact its overall architecture, which may well contain products that compete with those provided by the new combined vendor.

Culturally, Ventana Research believes Verint and Witness should gel well. Both prioritize helping their clients focus on their own customers, albeit from slightly different perspectives. By creating a wider portfolio of offerings, they will be better positioned to offer such help. We do not expect them to have many issues integrating their products because apart from an overlap in voice recognition, the product lines are largely unique. Verint has always focused on BI and analysis tools through its flagship product Actionable Insight; in contrast, along with quality monitoring, Witness has focused on agent workforce management. A crucial question, though, and one still not answered, is how far the integration will go. Nevertheless, once it is done, the combined company will have a portfolio that will enable it to compete on more equal terms with the likes of Aspect and NICE Systems.

Market Impact
Takeovers tend to cause uncertainty for customers, reduce choice and create internal disruption as companies wrestle with merging organizations and processes and deciding how thoroughly to integrate their product portfolios. We understand the case Verint and Witness have made for combining their product portfolios, but we question whether the market is ready for it. Most contact centers are saddled with arrays of legacy technology, and for many, replacing them with a fully integrated, enterprise-style suite would be too disruptive. It will be interesting to see how the combined company addresses this issue and how it fairs in what is sure to become a head-to-head competition with NICE. It also will be interesting to see what, if anything, the big switch manufacturers such as Avaya, Cisco and Nortel do in response. They have been quiet lately on the acquisition front, but that won’t last as they and other vendors race to gain advantage in what has recently become a much more active market.

Recommendation
Running a contact center requires using many different pieces of technology, and integrating these has always challenged companies that use them. This latest takeover creates another option, with several of the key technologies more closely coupled and supported from one organization. Ventana Research recommends that once things have settled down and the final regulatory processes are complete, companies looking for a combination of call recording, quality control, agent workforce management and contact center performance management should give serious consideration to what the new company offers.