How To Manage A Web Customer Experience

Transcription

1 Magic Quadrant for CRM Web Customer Service Applications Written by: Johan Jacobs via gartner.com Gartner's Magic Quadrant for CRM Web Customer Service Applications shows a market for mostly mature technologies with buyers increasingly focusing on mobile, video and social channels, while expanding content in the knowledgebase for self-service. Market Definition/Description The CRM Web Customer Service Applications Magic Quadrant is based on the Web customer service framework, and consists of eight primary building blocks (also see "CRM Web Customer Service Application Framework, 2012"): Knowledgebase for self-service Web-based self-service supported by a knowledge management engine and database through which to perform advanced content delivery. The key focus is to achieve at least an 85% relevance of response (see Note 1). response management management environment with natural language understanding, optical character recognition (OCR), routing, virtual agents, automated categorization and escalation, keyword spotting, and text emotion detection. Web chat Online Web text-based interaction with a live agent or speech-based interaction with a virtual assistant. The Web chat sessions are routed in a similar manner to voice calls, and a group of text chat agents will engage with the client when receiving an incoming Web chat request. Collaborative browsing Simultaneous browsing of a website to assist with shopping cart or forms completion. Often referred to as assisted forms completion, this activity will allow an agent to respond to a customer request for online assistance or click-for-help request. Virtual assistant Interaction with a virtual entity (humanoid) via a Web-based or mobile device interface. Interaction types are text-to-text, text-to-speech, speech-to-text and speechto-speech. Video services Single directional outbound video services from an agent to a customer, and video-based guided assistance using how-to videos stored in the knowledgebase or a social media channel. Mobile customer service with SMS Service notification and requests via mobile device or smartphone using data and an SMS channel, and the embedding of a URL into an SMS text. Also providing mobile customer service applications or engagement on channels such as mobile Web chat and mobile virtual assistants.

2 Social services Harvesting of content from social networks and updating the knowledgebase with the content to allow better resolution of recurring problems across all interaction channels. In addition to the primary components, there are three other components that are important for managing the Web customer experience: Multichannel analytics The use of business intelligence and analytical tools to obtain comprehensive insight into the usage of, and customer interaction across, all channels deployed Multichannel feedback management Using survey tools to obtain customer feedback across all the above channels following interaction within a Web customer service channel Multichannel interaction recording Recording of Web searches, chains, Web chat transcripts, collaborative browse sessions and/or SMS interactions for quality purposes The market size for Web customer service is currently estimated at $1 billion, up from $900 million in 2011 and up from $820 million in 2010.

3 Magic Quadrant Figure 1. Magic Quadrant for CRM Web Customer Service Applications Source: Gartner (February 2013)

4 Vendor Strengths and Cautions Anboto Anboto is a privately owned provider of Web customer service based in Bilbao, Spain. It is primarily focused on the European market. Gartner estimates the vendor's annual revenue at between $5 million to $10 million. Anboto has won a number of industry awards and is rapidly building an expanding customer base as a result of sales and infrastructure investments, as well as opening an office in Redwood City, California. This Niche Player provider of Web customer service uses a sophisticated algorithm to conceptualize the knowledge delivery based on a five different analytical processes (morphologic, syntactic, semantic, pragmatic and functional), averaging an above 90% relevance of response in its self-service responses. The Anboto solution is exclusively cloud-based, with a software as a service (SaaS) business model, and pricing includes a setup fee and monthly pay-per-use charge, with the cost of maintenance also based on use. Strengths All the Anboto channels are on the same integrated platform, with all the products integrating with the same knowledgebase that has a single administrative dashboard for knowledge maintenance. Under the same analytics tool, a client can check the interaction channel analytics, as well as the recorded surveys of all the different channels. The Social module allows the use of the Anboto Virtual Assistant for Customer Service and Sales from a Facebook page. This allows clients to interact with the virtual assistant without leaving the social network. The virtual assistant shares a knowledgebase with the Web version, so there's no need to maintain different knowledgebases for different channels. Cautions In addition to the vertical focus on finance, transportation and healthcare, Anboto needs to expand its focus to other growth verticals, such as retail and public sector. Due to its primary focus on Spain and Europe, Anboto has a limited capability to sell and provide support in other international venues. Recently established offices in the U.S. should help business expand into wider geographies. Anboto has a mobile customer service development platform in the native Web customer service suite, but further development is required for SMS delivery. The library of packaged mobile applications is also not as comprehensive as some of the other providers in the Magic Quadrant. Artificial Solutions Artificial Solutions is a Visionary provider of Web customer service focused primarily on the European market. Gartner estimates the vendor's annual revenue at $10 million to $14 million. The Teneo customer interaction suite has become well-established and mature in the past 12 months, and it forms the core of Artificial Solutions' offering. Artificial Solutions has a flexible licensing structure that is either based on SaaS or perpetual licensing. The licensing is not based on hardware infrastructure or the number of licenses, but on the traffic that is generated through the system, which is measured by the volume of interactions. Clients pay an initial fee for the software and then per interaction.

5 Strengths At the core of the Artificial Solutions' offering is a knowledgebase that is managed and accessed through the Teneo Interaction Engine. It is able to receive and send data from and to external systems, in addition to its own knowledgebase, thereby extending the capability of the overall solution. Artificial Solutions is able to stream how-to videos either within the Teneo platform or via social networks. The video content is accessed via the knowledgebase and can be played through a Web page in response to a service query placed through the virtual assistant, or the link can be ed or displayed in a Web chat. Teneo can search through aggregated social media content for keywords. Using natural language, it can understand the sentiment behind comments and respond appropriately, whether that means providing helpful information, a link to a website or a telephone number. Cautions Artificial Solutions does not have any Web chat nor collaborative browsing capabilities. For these functions, customers will have to engage with partners, such as NTRglobal or LivePerson. There are currently no plans to add these channels to the native platform. The response management solution can analyze the content of an incoming , but it cannot open attachments and process the content in the attachments. Due to the mainly European focus, Artificial Solutions is limited in its ability to support and sell its solution in other geographies. Avaya Avaya is a $5.547 billion company selling a comprehensive set of communications software and services. With approximately 400 employees dedicated to the development of Web customer service solutions, Avaya provides multichannel and Web self-service solutions for internal and external customer use. The Avaya Aura Contact Center Suite forms the platform for most of the Web-customer-service-related channels and is sold on a per-server basis, with licensing required for agents. Avaya also offers an enhanced software licensing program that provides pricing economies based on scalar user license fees, an increased level of flexibility for software license moves and software version investment protection. Avaya has moved to the Visionary quadrant following the release of Avaya Aura, but it still lacks the functionality of a deep, rich knowledge management solution, integrated with the other channels, and this will restrict further movement at this time. Strengths Avaya provides a variety of collaborative capabilities using automatic synchronization, where a customer and agent can have their browsing synchronized and customer page sharing is available through page push, which helps customers fill out forms and through which predefined or ad hoc pages can be pushed to customers. No customer download is required for enabling these activities. The Avaya Social Media Manager scans and processes events from external social and community sources. It gathers potential interactions from social channels, analyzes social work items, selects appropriate events for agent review and then assigns the social work items for action. The vendor provides real-time video sessions between agents and customers, supporting both one-way and two-way video chat. Video collaboration also includes the ability for agents to show customers how-to videos.

6 Cautions The knowledgebase self-service tool is provided in the form of an FAQ solution and has good search facilities, but it is only available in one of the Avaya Web customer service solutions. Avaya indicates that it can integrate with a number of virtual assistant solutions. The vendor has also revealed plans for growth and acquisition in this area. Avaya has no emotion detection built into its core routing platform, but does offer emotion detection in its Social Media Manager product. egain egain is a $44 million company based in San Francisco. The egain solution is available in onpremises, hosted and SaaS deployments. The vendor's biggest strength lies in its extensive knowledge management capabilities, which are tightly integrated with and support all the various Web customer service interaction channels. The egain solution is hosted in California and England, providing multicontinent opportunities. A variety of pricing options allows businesses to purchase what they need in terms of applications (one or more at a time) and deployment options (cloud or on-premises). The pricing options include user-based and session-based, with user-based pricing in the range of $80 to $120 per user per month for cloud deployments, and pricing in the range $1,000 to $1,500 per user for on-premises deployments, depending on the application, with additional purchase volume discounts. Other pricing options, such as session-based and offer-based pricing, are available, depending on the application. Annual maintenance costs for on-premises deployments are typically 12% to 15% of the license fee, and there are no maintenance costs for hosted deployments. Moreover, egain offers an investment model called SLaaS (for solution as a service), which is a month-to-month, cloud-based deployment option encouraging risk-free innovation. Strengths egain's SLaaS agreement requires no contract of any kind and customers only pay for what they want to use. The fast, cloud-based implementation provides an ideal platform for customers to pilot a wide variety of Web customer service channels before deciding on what to deploy. The egain knowledgebase is the best among all the providers evaluated and provides for all five of the following levels of search: keyword matching, natural language, semantic understanding, intent-based search and case-based reasoning. This federated search approach allows customers to obtain very high accuracy when performing searches of internal or external sources. The vendor is one of the few providers in the Magic Quadrant that not only has a highly functional solution for Web customer service, but also has an equally efficient multichannel solution to support Web commerce and sales-based activities. Cautions The egain platform is 100% pure Java Platform, Enterprise Edition (Java EE) and it implements service-oriented architecture (SOA). There is no Microsoft.NET solution available or planned for the future. The vendor has increased its investment in distribution, recently adding local teams in Germany, France, Singapore and South Africa. It will need to educate customers in these new markets and adapt its product strategy to effectively serve local needs.

7 egain APIs have been significantly enhanced with REST APIs for its knowledge platform. This presents a new opportunity for partners to develop value-added solutions, embedding knowledge in business processes. However, the vendor's partner network will need training and certification to take full advantage of this capability. Eptica Eptica is a $9 million Niche Player vendor of Web customer service solutions. The Eptica Web customer service suite provides a single platform for response management, Web, social, chat and mobile, supporting multiple brands, suppliers and languages. Eptica's central engine comprises a self-learning knowledgebase, semantic and natural language processing, an interaction workflow engine, and analytics. Interaction detection, routing and business rules enable the management of multitier customer interaction between the customer, the service provider and the enterprise. Both on-premises and SaaS options are available from the vendor, and licensing options are charged for on a concurrent user basis, based on the number of connected agents. There are also knowledgebase usage volume limits that are charged for based on the number of interactions. Maintenance is paid at 20% of the list price; however, with concurrent user pricing, this could be difficult to calculate. Strengths Eptica Self-service enables video customer service through the use of how-to video knowledgebase articles. Video can be stored in the knowledgebase content library, and a link is contained within the self-service text to a YouTube video. The Eptica Facebook Interaction Portal provides integration and management of inquiries from Facebook users. All Facebook interactions (and Twitter messages) are also recorded within the customer's individual contact history. Agents process Facebook questions through the Eptica Management interface in the same way they process inbound s. Drill-down reporting is provided as standard within the Eptica Web customer service solution, providing customer insights into all multichannel interactions, including social media channels. Cautions Eptica's primary focus is in Europe and Asia, and the vendor currently has no plans to extend its operations to the U.S. Eptica does not have a virtual assistant solution, and customers will have to engage a third party to fill this gap. The vendor also does not have any plans on its road map to develop a virtual assistant. Eptica's Web customer service solution is built entirely on the Java EE platform, and there is no.net option available. Customers with this architecture standard will have to invest in integration efforts to run the solution. Genesys Genesys is a $600 million company. It uses a three-tiered SOA approach to Web customer service. The various channels are managed by the following servers: Server, Chat Server, SMS/MMS and Social Messaging Server, Web API Server, Interaction Server, Universal Routing Server (URS), Stat Server and Classification Server, as well as Training Server, which is focused on providing a seamless customer experience. Genesys provides onpremises, CPU and subscription-based licensing and charges by the seat or named user, and has an application fee for social media. Maintenance is calculated as 16% to 20% of the net license price.

8 Strengths With Genesys Mobile Engagement, customers can use a mobile application to connect directly to an agent, who then receives session information, customer history, preferences, location and other contextual information for the mobile interaction. The vendor uses Conversation Manager to gather and execute on key customer information, and to manage cross-channel conversations. The Genesys social solution has the following key capabilities: Monitoring to automate the process of listening, and to analyze the action ability and sentiment of a social media message; prioritizing to determine the service level and priority of the social media interaction; and engaging, which aligns the social media interaction with the ideal available resource to service the interaction. Cautions Genesys has disclosed an ambitious road map to develop its own knowledge management capability, which, until last year, was primarily provided through an OEM arrangement. There is risk in any development road map, so enterprises are cautioned to understand how and when the Genesys suite meets their specific knowledge requirements. Genesys does not have a virtual assistant solution, but has partnered with Oddcast to provide functionality in this area. The private equity and venture capital firms that own Genesys have high expectations for growth, so the vendor will be aggressively pursuing new markets. As it pushes itself beyond its traditional market segments, it may stretch its go-to-market delivery capabilities. Enterprises should evaluate the level of support they will require from partners or from Genesys for the overall solution. Interactive Intelligence Interactive Intelligence is a $210 million company and currently has six data centers around the world. At the core of all Web customer service interactions is the Customer Interaction Center (CIC) server, which routes, monitors, records and reports on all interactions. The on-premisesbased licensing includes a server fee for every locally installed switchover pair, and a user- or workstation-based perpetual access license to handle and Web chat. Licenses can be upgraded from single to multichannel. Separate licenses are needed for the Interaction Recorder, Interaction Optimizer, Interaction Analyzer and e-faq. Communications as a service (CaaS) licensing provides a monthly agent fee, with an add-on monthly charge for multiple channels. Maintenance is 18% of list price for standard maintenance for premises-based software, and CaaS pricing includes all software maintenance. Strengths The 2011 launch of Interaction Analyzer provided the ability to perform real-time keyword and phrase spotting during interactions as it monitors the conversation stream between an agent and customer. Future releases will also include a contextual overview of each conversation. During a Web chat session, prewritten responses (such as greetings, closings and commonly asked questions, as well as responses from e-faq) can be dragged and dropped into the chat window to speed up chat times and standardize interactions. The Interaction Recorder solution provides the ability to record Web chats and s, and to score them for quality assurance purposes. Recording also includes the option to screen record the agent's activity while working on an or Web chat.

9 Cautions The e-faq solution is the vendor's answer to a knowledgebase solution; however, during the past 12 months, no new functionality has been released for this product. Currently, it lacks the advanced features one would find in a full self-service knowledge management deployment. Interactive Intelligence does not have a virtual assistant solution available nor does it have a collaborative browsing solution; it partners with LiveLOOK for the latter. Interactive Intelligence has some limited video services available and has developed integrations with Microsoft Lync, IBM Sametime and Polycom to provide video queuing. With regard to knowledge management, videos can be accessed via the e-faq solution, but no searchable scripts can be created from the video content. Kana (Enterprise) Kana is a $100 million company, following some strategic acquisitions. Kana Enterprise provides both an on-premises and a cloud-based context-aware SOA with three architectural tiers: service experience (focusing on the user interface and experience), orchestration (focusing on knowledge, , Web chat and other channel services) and integration (focusing on creating a unified integration layer between all the channels). Pricing for on-premises products is module- and agent-based, and pricing for the SaaS offerings is subscription-based by seat or usage. Standard maintenance is offered at 20% of the net license fee, and premium maintenance is offered at 25% of the net license fee. SaaS offerings include maintenance in the usage price. Strengths The Kana Enterprise knowledgebase supports the embedding of how-to video content and distributing it at the right point in the service experience posting a video to a social community, playing a video during a Web chat or co-browse session, or sending a URL link to the video in an . Using text analytics for natural language and accommodating "Internet speak" (such as misspellings and acronyms), Kana Enterprise's social listening capabilities allow enterprises to listen to discussions and content on social communities. There is also an ability to detect customer sentiment and highlight pervasive issues, and agents can respond directly to social media posts if needed. Kana Enterprise provides multichannel analytics to derive insights from customer interactions ( , chat, phone), feedback (Web forms, surveys) and social media (Facebook, Twitter, blogs). Business rules can take multiple actions, like escalating the case, or sending out an resolution or a knowledgebase article. Cautions Storing video by recording the voice into searchable text and the provision of an SMS gateway is still a gap in the Kana Enterprise edition. The recent acquisition of Ciboodle, focused on rounding out the vendor's social CRM footprint and providing a mobile platform, could create some challenges around integration of Ciboodle and its product lines in the short term. Complete availability of all the Kana Enterprise channels and functionality in the cloud remains a road map objective. Although some components are available as SaaS, others are not. The entire product can be hosted, but more development is needed to migrate the entire solution to support a SaaS model.

10 Kana (Express) Kana Express is a new solution from Kana, following the acquisition of Trinicom. Prior to the acquisition, Trinicom was an approximately $10 million company, but since its incorporation into the $100 million Kana organization, there have been a number of enhancements to the solution and an increase in the geographic availability of the product. Kana Express is available as an on-premises or a cloud-based solution and is ideally suited for the midsize to large tier organization looking for Web customer service interaction channels. Kana Express licenses are charged for the number of used modules (channels) and transaction bundles (unique visitors/contacts). For on-premises deployments, the maintenance fee is 20% of the license costs. For SaaS offerings, there is a subscription-based model based on user modules and transaction volumes. Strengths Kana Express has the ability to embed video in the knowledgebase either as URL links to YouTube-stored content or as video knowledge in the knowledgebase. The product currently has two social media monitoring platforms, and has the ability to add the results of listening activities as contacts/cases for agent attention. The knowledgebase has also been integrated with the front-end community, creating the possibility for knowledge content to be delivered directly to the social network or forum in which the questions are being asked. Kana Express' analytics module delivers drill-down and slicing-and-dicing functionality over all the primary information domains: customer, organization, interactions and the knowledgebase. Cross-domain analysis is also possible to gain insights into user behavior. Cautions Kana Express currently does not have a collaborative browsing capability, but this is planned for the next release. Kana Express has a very well-established market share in the Benelux region, but is not wellknown outside of it. Kana will have to invest in training and the development of the broader sales force to accelerate the go-to-market pace in the rest of the world, where Kana Enterprise is better-known. The product has no multichannel recording capability. Organizations that have a legal requirement to record Web-based customer interactions (such as financial services) will have to engage with third-party solutions for recording them. Moxie Software Moxie Software is a privately held company that provides a Web customer service solution built on a.net platform and employs approximately 200 people across the world. Customers can select from either an on-premises or cloud-based solution. The vendor provides a full, multichannel customer communications suite that is powered by a built-in knowledge management solution. Moxie Software's licensing and pricing model is per user for onpremises solutions and subscription-based per user for the cloud model solutions for both the enterprise and small business markets. Maintenance is calculated at 20% of list price.

11 Strengths Moxie Software's Web customer service solution is designed on a publish/subscribe framework. Customer Spaces from Moxie Software allows changes made to the user interface, agent roles/permissions or content layer to be immediately pushed out to the agents without requiring relogin. The social media response module offers the ability to listen to social media channels, filtering out unwanted content and returning only the discussions and comments that require a response, and doing sentiment analysis as part of the process. The Moxie Software suite provides detailed recordings of all incoming communications and all interactions across the Web self-service channels. Track-and-store communications chains give agents a complete view of the entire customer history across all channels, putting the current interactions in context, and provide the ability to view related messages and other interaction histories across a particular incident or group of incidents. Cautions Moxie Software does not serve the small or midsize business market; the solution is bettersuited for midsize and large enterprise sales and service centers. The vendor does not provide OEM virtual assistant capabilities, but can integrate with other providers' solutions. It has a partnership with VirtuOz, with integrations into its chat and knowledge solutions, but Moxie Software does not provide support or contracting and licensing for this third-party product. The Moxie Software solution has the capability to store videos as knowledge articles that can be delivered via a self-service search or referenced via a URL. However, there is still no capability to record the soundtrack into text to create a searchable knowledge article that can start the video replay at the point where the information is required. Oracle-RightNow Technologies The Oracle RightNow CX Cloud Service solution employs a three-tier architecture: database, application/web server and client, with communication from the client to the server taking place via SOAP services and HTTP. The solution supports a multitenant, hosted environment, enabling support of multiple clients on the same database, as well as multiple versions of the software to run within the hosting environment. Oracle RightNow CX Cloud Service is priced on a subscription model offering four desktop packages: Standard, Enterprise, Enterprise Contact Center or Stand-Alone Chat. The suites follow a seat-based pricing model and Oracle RightNow Web Experience follows transaction-based pricing based on sessions consumed. The Oracle RightNow Social Experience is offered through a fixed-fee annual price for a standalone community. Oracle RightNow Engage for social follows transaction-based pricing based on the number of s sent. Strengths Oracle RightNow's mobile Web customer service solution extends the Web self-service channels and knowledge for use with mobile devices and smartphones using either of the following mobile interaction points: Mobile browser interactions of a customer within a Web browser within the device; mobile applications with purpose-built applications specific to the operating system within the mobile device; and mobile Web relying on the processing of the server to deliver content.

12 Oracle RightNow has no video chat capabilities, but does support the use of how-to videos in the knowledgebase for delivery either as direct push interactions with customers during a Web chat or via the URL of the video embedded on a website or in an link. Oracle RightNow Social Monitor Cloud Service, Oracle RightNow Self Service for Facebook and the Oracle RightNow Community offerings for social listening, analytics and response provide social media capabilities for customers seeking custom social service solutions. Cautions Some of the objectives that Oracle RightNow is focusing on require collaboration with other Oracle businesses. Some of those collaborations will likely take time to bring to fruition/bring to market. Be prepared to discuss release targets/road map if you are looking to utilize capabilities that span Oracle RightNow and other Oracle products, like Siebel. The Virtual Assistant offering is new to the market and does not yet have references. Oracle RightNow lacks a productized offering for SMS, relying instead on partners to fill the gaps in that area. If outbound/inbound messaging is key to your customer interaction strategy, then you might want to consider other suitable vendors. The RightNow solution is only available in a SaaS model and no on-premises option exists. Customers looking for an on-premises solution will have to select another provider. Since the acquisition, fewer clients have called us with inquiries related to Oracle RightNow than was the case before the acquisition. We believe this reduction is because there is a slowdown in Oracle RightNow deals being considered, at least among Gartner clients. We acknowledge that Oracle RightNow has been specifically called out by Oracle management as a growing area in Oracle s last three quarterly investor calls, and it could also be that clients have fewer questions because they know Oracle. Presence Technology Presence Technology is a $9 million company based in Barcelona, Spain. It focuses on a value-added reseller (VAR) strategy as its primary means of growth and expansion for both its on-premises and SaaS offerings. Licensing is mostly focused on one license per concurrent agent interaction across the various channels. For recording, it is one license per port, with two different license levels, based on the recording activation. Rental, pay-per-use, hosted and SaaS pricing models are based on the same principles. Maintenance fees are calculated as a percentage of the license cost and range from 12% to 22%. Presence Technology has also embedded the Voxeo Prism unified communications application server into every channel, which will mean some additional expenses for every license. Strengths Presence Technology supports video chat and, to date, deployments have primarily been through a video kiosk enabled with client-side cameras and the ability to video chat with call center agents. All video interactions are recorded and stored as interaction history. The Presence Social Media Gateway (SMG) supports Twitter and Facebook (bidirectional) as the primary social media channels. The social media monitoring also includes multilevel filters for routing interactions to the necessary agents for action. Social media responses can be automated based on results of the integration with the partner knowledgebase, where appropriate. The Presence Messaging SMS module includes a set of monitors and reports to supervisors managing the SMS channels. It allows the embedding of URLs into outbound SMS communications, focused on reducing call backs to the contact center.

13 Cautions Presence Technology has a limited ability to provide Web customer service solutions for global deployments. The vendor does not have a knowledge management solution; it partners with KBpublisher to fill this gap. Presence Technology does not have a virtual assistant solution; it partners with Artificial Solutions to fill this gap. SAP SAP is a 12,500 million company providing an open application and integration platform. The Web customer service solution is based on the SAP Java EE platform, which is part of the SAP NetWeaver stack. SAP partners with egain for a number of channels that are not native to the SAP solution. The vendor prices its solutions on a CPU core basis for business-to-consumer (B2C) customers and on a named-user basis for B2B customers. Maintenance fees are calculated as a percentage of the license costs. SAP provides standard support packages and a customer-specific support agreement. Strengths SAP not only focuses on Web customer service, but also provides a wider multichannel customer service solution, including contact center (SAP Business Communications Management and SAP CRM Interaction Center), e-service (SAP Web Channel Experience Management), mobile (SAP Mobile Platform) and social (SAP Social Customer Engagement OnDemand). The SAP Web Channel Experience Management platform and the SAP Mobile Platform focus on providing business processes via the Web or consumer mobile devices. SAP continues to heavily invest in its solution portfolio, and multichannel customer service is an ongoing strategic investment for SAP. Cautions SAP does not offer a complete solution set for Web customer service as native functionality. A number of components are only available through a partnership with egain, requiring customers to sign separate vendor agreements. This could result in a higher total cost of ownership, compared with some of the other more specialized Web customer service vendors. SAP does not offer an on-demand option for Web customer service. However, in the next release of SAP Social Customer Engagement OnDemand, the addition of and chat capabilities is planned. SAP uses its broad partner ecosystem to extend the Web and mobile reach of business processes beyond what is offered out of the box. Enterprises should be cautious when choosing a knowledgeable implementation partner.

14 Vendors Added or Dropped We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor. Added Anboto was added to this Magic Quadrant. Dropped Oracle-Siebel has been dropped from this Magic Quadrant, following the acquisition of RightNow Technologies by Oracle and the positioning of RightNow as the primary Web customer service interaction solution for Oracle, in place of Siebel. Gartner no longer considers Siebel as a multichannel Web customer service solution. Inclusion and Exclusion Criteria Market Traction and Momentum The vendor can provide customer references that have at least three of the eight primary Web customer service channels in production for a minimum period of 12 months, to demonstrate a well-integrated and functional product. If the vendor reference has social as a Web customer service channel, then a total of four channels are required, at minimum. The vendor might have a regional focus, but can sell and support multiple industries across a wider customer base. The vendor has generated at least $5 million in business application customer revenue for Web customer service in the past four rolling quarters. The vendor must have a minimum of five of the eight components identified as the building blocks of the Web customer service framework in OEM products and as part of its integrated solution. The other components can be partnered for or tightly coupled. The vendor must have its own sales team or use a partner's sales team. Deal management, pricing and negotiation must be done centrally, and the vendor must provide presales support to system integrators (SIs) and partners. Short-Term Viability The vendor has at least enough cash to fund one year of operations, given current burn rates. The vendor has sufficient professional services to fulfill customer demand during the next 12 months. This Magic Quadrant focuses on the Web customer service suite framework and the vendors in that market. It does not focus on the stand-alone or best-of-breed solutions in any of the eight framework areas.

15 Evaluation Criteria Ability to Execute Product/Service: A robust Web customer service suite is a combination of several subsystems or channel functionalities. The implication is that a key evaluation criterion is the existence of a well-integrated architecture. The Web customer service application should have out-of-the-box, self-service functionality, which means a strong set of industry- and processspecific business logic and data. Through process design or functional breadth, the system must support end-to-end, Web-based customer service processes. Published APIs are critical to connect (or expose) an application's customer service functionality with that of another system or process. Vendors are assessed on the ability of their current product releases to support customer service, as well as their technical support of multichannel and cross-channel environments. The vendor rating is developed by weighing specific functionality: having its own integrated knowledgebase for self-service (25%), response management (10%), Web chat (10%), collaborative browsing (8%), virtual assistant (10%), multimodal and mobile services (10%), video services (5%), multichannel interaction recording (10%), multichannel analytics (7%), and social services (5%). The vendor must have a stable product development team for all the products it sells. Partnerships were not included in this evaluation; only OEM solutions were included. Where a partner solution is used in any of the above channels, a score of zero for that channel is applied. Overall Viability (Business Unit, Financial, Strategy, Organization): This refers to the ability of the vendor to ensure continued vitality of a product, including a strong product development team to support current and future releases, as well as a clear road map with delivery dates regarding the direction that the product will take until The vendor must have the cash on hand and consistent revenue growth during four quarters to fund current and future employee burn rates and to generate profits. The vendor is also measured on its ability to generate business results in the Web customer service market. Sales Execution/Pricing: This refers to the ability of the vendor to provide global sales and distribution coverage that aligns with marketing messages. It must also have specific experience selling its Web customer service offering to the appropriate buying center. The strength of the management team is also key. In addition, the ability of the vendor to offer consistent and comprehensible pricing models and structures, including contingencies (such as failure to perform as contracted, or mergers and acquisitions), is important. The vendor is measured on its flexibility to support multiple pricing scenarios, such as on-premises and ondemand licensing (50%), as well as applications offering SaaS (50%). Market Responsiveness and Track Record: This refers to the ability to perceive evolving customer requirements and articulate that insight back to the market, as well as to create products that are ready as demand comes online from customers. Marketing Execution: This involves the ability of the vendor to consistently generate market demand and awareness of its Web customer service solution through marketing programs and press visibility. In Web customer service, the marketing execution ought to be less critical than some other factors; however, the business reality is that marketing success can fuel future growth and improvements.

16 Customer Experience: The vendor must produce a sufficient number of quality clients and references with varying levels of sophistication to prove the viability of its product in the marketplace. References are used as part of the evaluation criteria for the vendor's ability to execute and create a vision for how customers can improve customer service. Included in this are implementations and support. The vendor must be able to provide internal professional services resources, or partner with SIs with vertical-industry expertise, Web customer service domain knowledge, global and localized country coverage, and a broad skill set (such as project management or system configuration) to support a complete project life cycle. The critical point on customer experience is to ascertain the degree of change management that accompanied the implementation. Often, the end user experiences discomfort not from the new software, but from the change processes that were introduced with the new system. A score of 10% per successfully engaged reference is allocated for each reference, up to a maximum of 10 references. Operations: This involves the vendor's ability to meet its goals and commitments. Factors include the quality of the organizational structure, such as skills, experiences, programs, systems and other vehicles, which enables the vendor to operate effectively and efficiently. This includes management experience and track record, and the depth of staff experience, specifically in the Web customer service market. The most important factor in this category is customer satisfaction throughout the sales and product life cycle. The vendor must have sufficient professional services (in-house or through third-party business consultants and SIs) to meet evolving customer requirements. Evaluation Criteria Product/Service Overall Viability (Business Unit, Financial, Strategy, Organization) Sales Execution/Pricing Market Responsiveness and Track Record Marketing Execution Customer Experience Operations Weighting High Standard High Standard High High Low Table 1. Ability to Execute Evaluation Criteria Source: Gartner (February 2013) Completeness of Vision Market Understanding: The market for customer service is highly diverse because of the multichannel nature of customer interactions and the wide range of processes that need to be supported. To succeed, a vendor must demonstrate a strategic understanding of current and future Web customer service opportunities unique to its target market. This may be new application functionality, evolving service models or in-line analytical capabilities for unique customer segments. There is also a requirement to demonstrate process integration across multiple channels (for example, where a customer starts in one channel and finishes in another). Vendors must also demonstrate a road map with planned delivery dates on how to fill in the gaps in functionality where it exists.

17 Marketing Strategy: The vendor can describe its go-to-market strategy as something other than "growing until it is acquired by a larger company." Even with this as the endgame, it must be clear how prospects will be protected, or even benefit, from such a strategy. We look for a well-articulated strategy for revenue growth and sustained profitability. Key elements of the strategy include a sales and distribution plan, internal investment priority and timing, and partner alliances. Sales Strategy: The vendor delivers products and services in line with the needs and capabilities of the buying centers. For this Magic Quadrant, the product must be appropriate for large and midsize businesses. This includes preproduct and postproduct support, value for pricing, and clear explanations of and recommendations for detection events. Building loyalty through credibility with full-time enterprise Web customer service staff demonstrates the ability to assess the next generation of requirements. Offering (Product) Strategy: Specific vision criteria include business process management (supporting a threaded service task across functional areas, regardless of channel) and providing for the creation of content about the most likely customer intentions and how to address them, based on continuously variable business scenarios. "Continuously variable" means that, depending on the business context of the interaction, the steps and decisions in a service procedure may vary. The vendor openly communicates to its customers and to Gartner a statement of direction for the next two product releases that keeps pace with or surpasses Gartner's vision and our clients' vision of the Web customer service market. The vendor has a sufficiently broad set of products to ensure the success of the product. Without an advanced SaaS product plan (realizable within 12 months), a vendor cannot be considered a Visionary. Vendors must also demonstrate a road map on how to fill in the gaps in functionality where they exist. Business Model: To be a Leader through 2014, the vendor will have a SaaS option and an on-premises application option. Application modules are tightly integrated and have business process modeling capabilities and advanced workflow. The vendor has a strategy to appeal to its key vertical industries that is, it integrates with systems that are unique to an industry, and delivers packaged functionality and workflow for an industry (such as for the telecommunications, automotive and consumer goods industries), and B2B and B2C interactions. Vertical/Industry Strategy: The vendor has solutions for specific vertical industries. Innovation: Innovative vendors will begin to incorporate concepts that extend to consumer technologies, virtual assistants and customer service functions embedded in mobile devices and solutions. The vendor understands major technology/architecture shifts in the market and communicates a plan to use them, including the migration issues it may cause for customers on current releases. The architecture is built to operate in a SaaS delivery model, and the application integrates or includes contact center functionality or application links. We examine how well the vendor articulates its vision to support service-oriented business applications. The applications must be designed to collect data to supply a feedback loop for corporate performance management. They will help optimize a predictive customer analytics system. These predictive analytics alert management when service patterns are detected that might signal the need to adjust a business strategy or direction, or indicate that the likelihood of a

18 particular business scenario occurring has changed (for example, customers responding to a notice on defective parts, an accident or financial news). The vendor will be measured on the ability of its architecture to support global rollouts and localized international installations. The vendor must have tools for IT and business users to extend and administer the Web customer service application and especially the knowledgebase, so that there is not a permanent reliance on the vendor for support. Geographic Strategy: The vendor understands the needs of the three largest markets the European Union, North America and the Asia/Pacific region and knows how to build a strategy to focus on aspects of the overall market, directly or through partners. The vendor delivers products and services in line with the needs and capabilities of the buying centers. For this Magic Quadrant, the product must be appropriate for large and midsize businesses, and for at least three vertical industries. Evaluation Criteria Market Understanding Marketing Strategy Sales Strategy Offering (Product) Strategy Business Model Vertical/Industry Strategy Innovation Geographic Strategy Weighting Standard Standard Standard High Standard High High Low Table 2. Completeness of Vision Evaluation Criteria Source: Gartner (February 2013)

19 Quadrant Descriptions Leaders Leaders demonstrate market-defining vision and the Ability to Execute against that vision through products, services, demonstrable sales figures and solid new references for multiple geographies and vertical industries. Clients report that these vendors deliver a high level of value and return on their commitment. The development team has a clear vision of the implications of business rules and the impact of Web customer service on customer service requirements. A characteristic of a Leader is that clients look to the vendor for clues as to how to innovate in customer service. When asked, their clients reply that this product has affected the organization's competitive position in their markets and helped lower costs. Leaders provide functionally diverse and rich Web customer service suites in which a knowledgebase solution is part of the integrated offering and can be deployed and supported globally, and have at least six of the eight Web customer service framework components supported as an OEM solution. Challengers The vendors in the Challengers quadrant demonstrate a high volume of sales in their chosen markets (that is, more than 30% of new business by percentage comes from more than one industry). They understand their clients' evolving needs, yet may not lead customers into new functional areas with their strong vision and technology leadership. They often have a strong market presence in other application areas, but have not demonstrated a clear understanding of the Web customer service market direction, or are not well-positioned to capitalize on emerging channels, and might lack depth of full functionality in all the areas of the Web customer service framework. Challengers typically will also not have all the Web customer service framework channels available in their own products, and will partner to enrich their offerings. Challengers often will also not have a knowledgebase product. They may not have a strong worldwide presence or deployment partners. Visionaries Visionaries are ahead of potential competitors in delivering innovative products and/or delivery models. They anticipate emerging/changing customer service needs and move into the new market space. They have a strong potential to influence the direction of the Web customer service market, but Visionaries struggle to meet the needs of all organizations because of geographic limitations, company size constraints or specific product channel omissions. Typically, their products and market presence are not yet complete or established enough to challenge the leading vendors. Niche Players Niche Players offer solid solutions for Web customer service, and support only some of the overall suite functionality and components. They may offer components of the complete portfolios, but demonstrate weaknesses in one or more important areas, or are starting out in the Web customer service industry. They could also be regional experts, with little ability to extend globally. Niche Players are usually not focused on, and cannot support, large enterprises globally, but extend their services and solutions to small or midsize businesses. They may offer complete portfolios, but focus only on one size of organization or primarily on one regional area.

20 Context There are many niche vendors that are providing solutions for Web customer service channels (see "The Gartner CRM Vendor Guide, 2012" for other Web customer service vendors not included in this Magic Quadrant). In analyzing Gartner customer discussions during the past 12 months, we have once again observed that more than 82% of multichannel product buyers prefer a more comprehensive Web customer service suite, as opposed to a stand-alone singlechannel or point-based product. The most often quoted technology reason is an attempt to avoid the problems, efforts and costs associated with trying to integrate multiple disparate channel solutions from a plethora of point-based product solution sets, as well as the challenges experienced to try to integrate different knowledge vendors' products into Web customer service channel solutions. The top business processes that customers need to focus on through 2014 include (also see "Top Business Processes for CRM Customer Service, 2011 to 2013"): Case management and problem resolution Collaborative answer Workforce optimization Voice of the customer Self-service problem resolution Customer interaction hub There is very a strong link between Web customer service and the contact center. Whenever a customer needs the assistance of a human customer service representative, there is a shift from strictly Web customer service to the CRM customer service contact center (see "Magic Quadrant for CRM Customer Service Contact Centers" and Note 2). The Gartner research focus and scope in 2012 was widened with the addition of a new channel social services to the Web customer service framework and this Magic Quadrant. This Magic Quadrant is based on the Web customer service framework (see "CRM Web Customer Service Application Framework, 2012"). The strategy and business case for Web customer service deployments are most often based on the following business drivers: The need for a consistent customer experience across all channels and a "one correct answer" scenario (2011 ranking: 4; 2012 ranking: 1) Deploying new and additional customer access channels to reach new audiences (2011 ranking: 1; 2012 ranking: 2) The avoidance of high costs associated with traditional channels (2011 ranking: 3; 2012 ranking: 3) Procuring a suite solution today that will also cater to future requirements, as opposed to procuring many point-based solutions (2011 ranking: 2; 2012 ranking: 4) Increasing governance associated with recording interactions across all the customer channels (2011 ranking: 5; 2012 ranking: 5) An interesting observation between the 2010 and 2011 Magic Quadrant research was that buying behavior today favored the deployment of new channels to reach new customers. In 2012, the key focus is around creating a consistent experience across all the Web customer