Why Did Contact Center Provider Five9 Acquire Virtual Observer?

by Jim Lundy

In February 2020, Five9, Inc., a leader in the intelligent contact center (ICC) market, made a move to acquire Virtual Observer, a provider of workforce optimization (WFO) solutions. While the two companies have been partners for several years, this deal brings Virtual Observer fully under the wing of Five9, a move that gives them a complete product portfolio. In this blog, we explore the details of the sale and what it may suggest about the intelligent contact center market more generally.

Virtual Observer Completes the Product Portfolio

The deal will help Five9 round out its product offering. Previously, Five9 partnered for WFO. Now that it has its own, Five9 indicated it will still partner when necessary to give customers choice. Virtual Observer is a workforce management software provider that offers speech analytics, CRM management, omnichannel recording, and other tools designed to boost customer loyalty and empower employees.

When workforce optimization strategy is highly integrated with the intelligent contact center framework, data is streamlined, and administrative work is easier to get done. WFO strategy and WFM software are of high value for the modern contact center. While Five9 will continue to partner with other providers like Verint, this deal helps to make Five9 a more complete ICC offering.

Five9 CEO Rowan Trollope said that “The addition of Virtual Observer to the Five9 portfolio strengthens our ability to inspire agents and maximize the quality of customer interactions while reducing costs and maintaining regulatory compliance.”

Five9 and the Intelligent Contact Center Market

Five9 has been delivering record growth in the ICC category. It is capitalizing on the demand from enterprises that have been looking to migrate to a cloud-based contact center. Last year, Five9 won the Aragon Research Innovation Award for the Intelligent Contact Center market category for the second time in a row. We found that Five9 possessed novel contact center solutions that go beyond adapting to market shifts to actively disrupting and transforming the market landscape.

Artificial Intelligence in the ICC Market

The emphasis on people-centric collaboration is a theme Five9 shares with Virtual Observer. Describing the deal, Virtual Observer CTO Dan McGrail emphasized the importance of people-centric collaboration in intelligent contact center infrastructure. In Aragon’s 2019 Globe for Intelligent Contact Centers, we predicted the rise of people-centric collaboration as a critical trend in the ICC market.

As the focus turns to people, providers can expect to see a demand for faster call resolution, time and attendance systems, reduced customer churn, mobile workforce management software, lower functional costs, and less customer effort. Aragon has found that practical applications of AI can be an excellent way to address these emerging challenges. In fact, we forecasted that by 2022, advancements in artificial intelligence for contact centers will be able to identify the real issue a customer is facing 50% faster than traditional approaches.

It appears to us that both Five9 and Virtual Observer have the technology and the mindset required to excel in this market.

Bottom Line

At Aragon, we feel that this deal is the logical conclusion of a fruitful business partnership. With better workforce optimization solutions, Five9 will be able to leverage its already strong position to continue leading the intelligent contact center market. Virtual Observer’s technology and management team should be a natural fit at Five9. In light of the future of artificial intelligence, this deal underlines the importance of people-centric collaboration in the ICC market, a growing trend that other market players would be wise to keep an eye on.

Editor’s note: to learn more, check out the latest Aragon Research Globe for Intelligent Contact Centers.