About a week ago Verint Systems acquired Vovici for $76 million. Verint is a supplier of Workforce optimization solutions for contact centers and has a Customer Analytics platform that it seems Vovici products are going to fit into.
How will this effect the market for EFM products?
My opinion, Verint's acquisition of Vovici will be very good for a lot of the other vendors and potentially quite bad for a few. Almost inevitably, Verint is going to be looking for ways to recapture its up-front cash investment of $56 million as well as it's downstream payments of nearly $20 million. Vovici has been by far the largest spender on marketing in the EFM space to date. So, over the next year or two, I would expect lower marketing spend by Vovici, meaning less mind share and ultimately less competition particularly at the middle of the EFM tools market.
Needless to say, I expect the middle market for EFM solutions to be where the largest changes will occur. Organizations where the annual fees charged by Vovici are between $5k to $45K per year will begin to find that Vovici is less and less inclined to work with them on pricing and support issues as resources are diverted to large account pursuit initiatives based on Verint account relationships. In addition, the reduced Vovici marketing spend targeted at these accounts means that more organizations will look at non-Vovici solutions. Companies that are likely to benefit include: Questback, ConFirmIt, Qualtrics, and KeySurveys among others.
The low-end (under $5K/year) of the market shouldn't really be effected at all by Verint's acquisition of Vovici. Vovici competes here at times largely as a result of old ex-perseus accounts. But I would expect that Vovici will not devote (and really hasn't devoted) any sales effort to competing with products at these price points any longer. Beneficiaries will be Zoomerang, SurveyMonkey, QuestionPro and others.
Competition at the high of the market (contracts above $50k/year+) will likely increase substantially. Satmetrix, Medallia and MarketTools (for its CustomerSat product) will find themselves needing to defend an increasing number of their accounts as the Verint sales organization introduces programs incorporating Vovici into existing Verint customer contracts.
Vovici also has a well developed partner program. Consulting groups like Walker and Omega may find that Verint wants a larger chunk of the consulting revenue pie as well as potentially having products that compete with add-ons that they too offer. This too may open up opportunities for other high end or middle tier competitors.
All in all, if I had to guess I'd say that all the high end EFM vendors are soon going to be looking for larger partners who operate in the contact center so that they can fight off Verint using their own consolidated contracts and solutions. But, it seems to me that the rest of the vendors at the middle and lower end of the market should find growth easier going forward.
Having said all that though, I've observed and participated in the EFM market for 4+ years and been wrong before. And, beyond observational acumen, I have no special insights into Verint's plans for Vovici going forward. So, as usual, caveat emptor.
How will this effect the market for EFM products?
My opinion, Verint's acquisition of Vovici will be very good for a lot of the other vendors and potentially quite bad for a few. Almost inevitably, Verint is going to be looking for ways to recapture its up-front cash investment of $56 million as well as it's downstream payments of nearly $20 million. Vovici has been by far the largest spender on marketing in the EFM space to date. So, over the next year or two, I would expect lower marketing spend by Vovici, meaning less mind share and ultimately less competition particularly at the middle of the EFM tools market.
Needless to say, I expect the middle market for EFM solutions to be where the largest changes will occur. Organizations where the annual fees charged by Vovici are between $5k to $45K per year will begin to find that Vovici is less and less inclined to work with them on pricing and support issues as resources are diverted to large account pursuit initiatives based on Verint account relationships. In addition, the reduced Vovici marketing spend targeted at these accounts means that more organizations will look at non-Vovici solutions. Companies that are likely to benefit include: Questback, ConFirmIt, Qualtrics, and KeySurveys among others.
The low-end (under $5K/year) of the market shouldn't really be effected at all by Verint's acquisition of Vovici. Vovici competes here at times largely as a result of old ex-perseus accounts. But I would expect that Vovici will not devote (and really hasn't devoted) any sales effort to competing with products at these price points any longer. Beneficiaries will be Zoomerang, SurveyMonkey, QuestionPro and others.
Competition at the high of the market (contracts above $50k/year+) will likely increase substantially. Satmetrix, Medallia and MarketTools (for its CustomerSat product) will find themselves needing to defend an increasing number of their accounts as the Verint sales organization introduces programs incorporating Vovici into existing Verint customer contracts.
Vovici also has a well developed partner program. Consulting groups like Walker and Omega may find that Verint wants a larger chunk of the consulting revenue pie as well as potentially having products that compete with add-ons that they too offer. This too may open up opportunities for other high end or middle tier competitors.
All in all, if I had to guess I'd say that all the high end EFM vendors are soon going to be looking for larger partners who operate in the contact center so that they can fight off Verint using their own consolidated contracts and solutions. But, it seems to me that the rest of the vendors at the middle and lower end of the market should find growth easier going forward.
Having said all that though, I've observed and participated in the EFM market for 4+ years and been wrong before. And, beyond observational acumen, I have no special insights into Verint's plans for Vovici going forward. So, as usual, caveat emptor.
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