Ventana Research Analyst Perspectives

At its March 2023 analyst conference, 8x8 described a significant pivot in its focus. Going forward the company will be emphasizing the Contact Center (CCaaS) side of its portfolio, which to this point has represented a small portion of its overall sales. It made several product announcements to bolster the argument that it can effectively meet the needs of complex contact center operations while continuing to provide business users with a UCaaS solution. The overall XCaaS platform is aimed at both markets, which have been converging for several years.  

Those two markets are not without their differences. In each case, the value of voice communications is diminishing into a commodity, forcing vendors to differentiate based on more advanced capabilities in digital communications and AI. 8x8's CEO, Sam Wilson, turned the conventional argument for a UCaaS/CCaaS combo around by saying that UCaaS should be seen as a way of extending the contact center into the rest of the organization. Competition between CCaaS vendors has tightened as the innovation cycle for new features quickens, especially around AI and analytic tools and as I have written about the shift from costs to capabilities. This suggests that vendors in the overall communications market will need to invest in building stronger ecosystems to spread out development costs for those new features, and will have to act more like Silicon Valley software companies than telcos in order to grow.  

And when 8x8 showed a diagram of its ecosystem, it focused more on the needs of complex contact center operations than on traditional business communications or collaboration. The five elements called out were: conversational AI, workforce engagement/workforce management, agent productivity, analytics and data visualization, and customer insights - far removed from the basics of moving calls from point A to point B. Instead, the company is creating what it calls an enterprise-wide customer engagement platform, with contact center as the "anchor tenant."  

The primary proof point of commitment to this shift is 8x8's announcement of Intelligent Customer Assistant, a self-service tool for multichannel AI chatbots that's relatively easy to use and to integrate with CRM systems and other enterprise applications or connect with generative engines like OpenAI. ICA is entering the 8x8 platform via an OEM agreement with Cognigy, developer of conversational AI systems.  

Contact center use cases for conversational AI go well beyond chatbots. The technology can (and should) be used to produce real-time agent guidance, to boost upselling and cross-selling, collect voice of the customer data, and numerous agent engagement options. Intelligence added to self-service provides an opportunity to use contact center technology to provide other CX teams (especially marketing) with more or better data on sentiment, loyalty and customer value.  

8x8 also recently rolled out a tool for improving supervisor performance, called Supervisor Workspace, which uses the same underlying composable technology as the firm's Agent Workspace tool. It functions as a single pane of glass for supervisors to oversee performance metrics, coaching and integrations from other applications. Supervisors are beginning to benefit from the same integrated, user-friendly desktop environments that have been developed for agents in recent years. Since the pandemic, it has become important to streamline the way supervisors manage dispersed agents so supervisors can have visibility into remote operations and be able to devote time and attention to agents that need oversight.  

The third key announcement was of a partnership with OpenAI Whisper to integrate AI transcription, translation, and summarization services into the XCaaS platform. This will impact both UCaaS and CCaaS buyers.  

The shift 8x8 is making towards contact centers is more than a swapping of one main market for another. Contact centers are in the midst of a transition of their own, from voice-centric to digital-first, and from siloed operations to being more connected to other parts of the business. As customer experience (CX) is more widely accepted by organizations as a strategic imperative, vendors are building technology and process connections that bring many business users into closer proximity to customers. Most of the technology used to engage with customers is purchased by and for those centers, with an emphasis on communication tools for managing the flow of interactions that I have written is essential for organizations. The likely outcome for 8x8 then is that gaining more contact center customers opens the door to putting (more expensive) contact center tools in the hands of more non-contact center users.  

By 2026, more than one-half of contact centers will capture real-time transcriptions of calls to help with coaching and training, and provide automated agent assistance. The role of automation in contact centers is critical for efficiency improvement and a renewed priority as I have written. CCaaS vendors have been slow to market their platforms as multi-departmental software environments for full-blown CX operations. Much of the technological innovation (AI, automation, self-service, etc.) has been available and implemented, but CCaaS vendors have had less to say about unifying contact centers with deeper CX teams than vendors from some other market segments. This has been a bit of a strategic miss for CCaaS vendors generally. 8x8 though has clearly been preparing the groundwork for some time to try for a bigger CX play. We saw this when the company first talked about the value of a combined communications platform through XCaaS. The acquisition of Fuze provided the company with R&D resources needed to build out that platform with more varied software applications. Now 8x8 seems ready to move past the tight confines of communications to approach a more complex market with a correspondingly advanced toolkit that melds its communications expertise with the analytics, agent engagement and knowledge resources necessary to run a sophisticated CX operation.  

Regards,

Keith Dawson