2011 Quality Management/Liability Recording (Workforce Optimization) Market Share Report

DMG Consulting’s annual Quality Management/Liability Recording (Workforce Optimization – WFO) Market Share Report is essential for vendors and investors who want to understand the current status and expected future performance of the 45-plus WFO competitors. In its eighth year, the Quality Management/Liability Recording (WFO) Market Share Report provides a detailed analysis of the performance of WFO suite providers, applications and sectors for fiscal 2010.

While some vendors experienced a slowdown, and the contact center sector did not fare as well as the overall WFO market, contact center WFO has done well over the past five years. In fact, the contact center WFO sector outperformed many IT segments, with total revenue increasing by 9.0%, from $928.4 million in 2009 to $1,012.1 million in fiscal 2010. Additionally, the five-year CAGR for the contact center WFO sector was 4.2%, showing steady but not staggering growth. Overall, the contact center WFO market has grown both organically and through acquisitions every year since 2003, with the exception of 2009.

DMG expects 2011 to be another positive year for the WFO market – perhaps its best year yet – particularly with market leaders Verint and NICE reporting good first-quarter performance for their WFO businesses. While these top vendors strongly influence the market’s progress, several smaller vendors are also gaining ground, and the sector is ripe to see a third top contender emerge from the pack. DMG predicts that 2012 and 2013 will continue to be good years for the WFO sector, with strong sales of contact center and security-related offerings, as well as improved sales of the professional services needed to accompany increasingly complex products.

The most significant trend to emerge in fiscal 2010 in the WFO sector is cloud-based computing (also known as hosting). In the past year, both NICE and Verint became active with hosting offerings via partners, primarily to address the needs of small and mid-size organizations. In addition, some smaller WFO providers and best-of-breed solution providers who sell just one of the nine WFO applications have embraced hosting. Currently, eight of the 26 vendors covered in this report offer solutions on a hosted basis. In 2010, revenue from cloud-based WFO implementations was low – $19 million – but DMG predicts this will change significantly over the next two to three years, especially with Verint and NICE competing for this business.

The 2011 Quality Management/Liability Recording (WFO) Market Share Report covers 45 vendors in total, and analyzes the fiscal 2010 vendor and market share for the top 26 vendors.

Report Highlights:

• 2010 was a comeback year for the overall WFO market: 2010 saw almost every revenue category that showed a decline in 2009 exceed its prior-year (2008) high. Total company revenue increased by 10.2% to $3,208.9 million on a GAAP basis, up from $2,912.2 million in 2009.
• The contact center WFO sector outperformed many other IT sectors: While not performing as strongly as the overall WFO market, contact center WFO  beat out many other IT sectors, with total revenue in fiscal 2010 of $1,012.1 million, up by 9.0% from $928.4 million in 2009.
• The future is bright for WFO growth: DMG expects 2011 to be the WFO market’s best year yet, with 2012 and 2013 also likely to see strong performance due to increased sales of contact center and security-related products and associated professional services.
• WFO in the cloud will see more airtime in coming years: The cloud is hot and WFO is no exception. Eight of the 26 vendors covered in this Report offer their solutions on a hosted basis. While revenue from cloud-based WFO deals was low, $19 million in 2010, DMG predicts this figure will grow significantly over the next two to three years.

The report is available from DMG Consulting.

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