July 29, 2021

Last week, Zoom completed the largest acquisition deal in the contact center industry when it announced its intention to acquire Five9 for $14.7 billion. Zoom may have evaluated several smaller and less expensive contact-center-as-a-service (CCaaS) providers, but it ultimately decided to use its stock value to “go big” with Five9.

Zoom’s intention to acquire Five9 comes at an opportune time for the company. Last year, the company more than tripled its revenue. As the company continues to grow in 2021, its main video conferencing market is showing signs of commercialization, with increasing competition from Cisco, Google and Microsoft.

Moving into another promising market like contact center’s adds value to Zoom’s portfolio and builds on its momentum within the company:

• Cloud migration will continue to be a growth area. Although the pandemic has accelerated the migration of contact center systems from old, complex on-premise software to CCaaS, an estimated 60% of the market still needs to be shifted to cloud.
• Unified communications as a service (UCaaS) and CCaaS are complementary solutions. Zoom has expanded from video conferencing to other markets, including UCaaS with Zoom Phone and virtual events with Zoom Events. Since CCaaS is frequently purchased with UCaaS, this is a natural category that Zoom should also explore, as double-digit percentage growth rates have been observed with other providers that offer both services.
• With the CCaaS market now tapping more than 5,000 seats for higher-value customers, Five9 has cultivated leading partners such as AT&T and Deloitte to increase its ability to capitalize on these promising opportunities.

Five9 customers will benefit from increased investment and access to consumers who already use Zoom, but Five9 customers will need to closely monitor the progress of integration and its impact on support teams, customer success programs, and product plans.

Zoom customers may be able to bundle advantages when viewing CCaaS, but this will not happen until the merger is completed and the two companies agree on joint licensing plans.

For more information, read the original story in ZDNet.