Europe Contact Center as a Service (CCaaS) Market Size, Share & Industry Analysis, By Function (Interactive Voice Response (IVR), Multichannel Automatic Call Distribution, Computer Telephony Integration (CTI), Reporting and Analytics, Workforce Optimization, Customer Collaboration, and Others), By Enterprise Type (Small and Medium Enterprises (SMEs) and Large Enterprises), By Industry (Banking, Financial Services, and Insurance (BFSI), IT and Telecommunications, and Others), and Regional Forecast, 2024-2032

The Europe contact center as a service (CCaaS) market size was valued at USD 1.49 billion in 2023. The market is projected to grow from USD 1.79 billion in 2024 to USD 8.03 billion by 2032, exhibiting a CAGR of 20.7% during the forecast period.

The contact center as a service (CCaaS) is a software model that lets businesses use a provider's contact center solution. It routes customer interactions to call center agents and is usually cloud-based. This helps businesses to save on IT support costs by only buying the necessary technology. The increasing popularity of cloud-based contact center solutions, replacing traditional on-premise or hosted infrastructure, is contributing toward the Europe contact center as a service market growth. Many European organizations focus on creating comprehensive, smart, and unified cloud contact center solutions that provide seamless omni-channel customer experiences. For instance,

• In May 2023, Genesys launched the Genesys Cloud EX solution, which engages, motivates, and empowers employees within the contact center space. With this launch, companies may increase engagement, performance, and trust with today’s digital workforce.

The COVID-19 pandemic caused a quick change in how contact centers operate, establishing a positive impact on the market. The fast implementation of the cloud contact center as a service solution allowed for adaptable and smooth contact center environments. For instance, in May 2020, a U.K.-based healthcare service provider allowed about 2,000 contact center agents to work remotely from their homes using the inContact CXone platform patented by NICE Ltd. in response to increased call volume due to the pandemic.

IMPACT OF GENERATIVE AI

Generative AI to Aid Contact Center as a Service with Automated Customer Service, Resulting in Improved Customer Satisfaction and Contact Center Productivity

Generative AI-powered chatbots have been making waves since the launch of ChatGPT. The ChatGPT is an AI chatbot representing a major advancement in generative AI systems and potentially transforming several industries. The growing use of generative AI applications is anticipated to increase the demand for IT infrastructure.

Large language models (LLMs) and generative artificial intelligence (gen AI) are increasingly used in contact centers to enhance customer service, streamline operations and increase efficiency. These advanced generative AI technologies enable natural language understanding, generation and context-aware interactions, leading to more effective customer communication. Google Cloud Contact Center AI (CCAI) is an example of a platform that extensively uses this technology. By harnessing the power of LLMs and machine learning (ML), CCAI enables contact centers to enhance customer interactions, automate tasks, and deliver superior service.

• Furthermore, Europe is increasing its investments in generative AI (GenAI) by 115% next year to USD 2.8 billion, less than North America's investments, according to the Infosys Knowledge Institute (IKI) study. The pace of European investment is slower than North America, where investments are projected to reach nearly USD 6 billion next year, as stated in the Generative AI Radar 2023 – Europe report.

Europe Contact Center as a Service Market Trends

Incorporation of Artificial Intelligence (AI) and Machine Learning (ML) Technologies in Contact Center Solutions to Propel Market Growth

The incorporation of artificial intelligence (AI) and machine learning (ML) technologies in contact center solutions is a significant driver propelling the Europe contact center as a service market share. These advanced technologies are revolutionizing the way contact centers operate and are opening up new possibilities for enhancing customer experiences and optimizing operational efficiency. AI and ML technology is used in the contact center as a service solution to automate tasks. AI analyzes customer inquiries and directs them to the best agent or department based on skills, language, and history. This helps customers quickly connect with the right resource, boosting resolution rates and satisfaction.

Additionally, companies are integrating AI and ML technologies with their product offerings to enhance the customer experience in contact centers. For instance,

• In February 2023, Salesforce introduced advanced analytics, AI, and automation solutions tailored for communication providers, aiming to enhance agent productivity, optimize contact center management, and elevate the overall customer experience. These advancements bring new capabilities that empower communication providers to make data-driven decisions, leverage AI technologies for improved agent performance, and automate manual processes.

Europe Contact Center as a Service Market Growth Factors

Adoption of Cloud-based Contact Centers across Industries to Fuel Market Growth

In Europe, cloud-based solution adoption has become progressively important due to the need to comply with data protection regulations, such as the General Data Protection Regulation (GDPR). Cloud adoption has been helping organizations optimize IT infrastructure for improved data management, cost reduction, scalability, security, and compliance.

Adopting cloud-based contact centers across various industries is a major driver for the market’s growth. Companies from different sectors increasingly recognize the benefits of moving their contact center operations to the cloud. Organizations easily scale their contact center resources up or down based on fluctuating customer demands. This flexibility allows businesses to efficiently manage peak call volumes, seasonal variations, and even expected surges in customer inquiries. With cloud-based solutions, companies can quickly add or remove agent seats and adjust their capacity to align with changing business needs.

The European Commission is working toward offering European public authorities and businesses sustainable, secure, and interoperable cloud services and infrastructures. By 2030, 75% of businesses in Europe will likely utilize cloud-edge technologies for their operations.

• In August 2023, Content Guru, a cloud contact center and (CX) provider, announced that it is opening a new development hub in Porto, Portugal, with the aim to continue its expansion in Europe.

RESTRAINING FACTORS

Increasing Risk of Fraudulent Activities and Data Security Challenges to Impede Market Growth

As a service platform, the contact centre handles a huge amount of data related to its customers, which is often subjected to a high risk of data security. This is primarily due to the contact centers process and storage of Personally Identifiable Information (PII), such as payment card data, personal information, Social Security Numbers (SSNs), and others. This information is the prime target for fraudulent activity for attackers.

Also, potential insider threats can be imposed from Customer Service Representatives (CSRs), contact center agents, and those subjected to copying down verbalized customer card payment data. Even contact centers might be subjected to accidental data leaks by human error or phishing attacks. Survey findings emphasize the urgency for contact centers to secure all sensitive data and reduce the risk of brand-damaging data breaches.

• The 2022 Annual Report on the Protection of the EU’s Financial Interests shows a slight increase in the number of fraud and irregularity cases reported by EU and national authorities compared to 2021, totaling 12,455 cases. This rise aligns with the advancements in implementing the EU’s spending programs.

Europe Contact Center as a Service Market Segmentation Analysis

By Function Analysis

Rapid Adoption of Speech-enabled Self-service Applications to Drive Growth for Interactive Voice Response Function

Based on function, the market is segmented into interactive voice response (IVR), multichannel automatic call distribution, computer telephony integration (CTI), reporting and analytics, workforce optimization, customer collaboration, and others.

In 2023, the interactive voice response (IVR) segment dominated the market in terms of share due to the growing need for automated telephony systems in Europe. IVR benefits businesses as it helps reduce costs and enhance efficiency, making it a popular trend in the CCaaS market. The rise of automated and people-assisted services is fueling the adoption of interactive voice response-based contact center services. The popularity of contact center interaction services is further boosted by the availability of voice portals that provide speech-enabled self-service applications.

The customer collaboration segment is expected to grow with the highest CAGR during the forecast period. Enterprises focus on enhancing customer experience and offering quick issue-resolving policies to propel the segment's growth.

By Enterprise Type Analysis

Gowing Adoption of CCaaS solutions to Drive SMEs Segment Expansion

Based on enterprise type, the market is segmented into small and medium enterprises (SMEs) and large enterprises.

The large enterprises segment held the major market share in 2023, as they started using cloud services early. They need to manage customer data in different locations, which is why they adopted CCaaS. Also, the ability to serve a broader customer base and reduce operational and capital expenditures is another factor supporting segmental growth.

The small and medium enterprises (SMEs) segment is estimated to grow with the highest CAGR during the forecast period. According to the European Investment Bank, Europe's 23 million smaller businesses represent 99% of all businesses. The adoption of CCaaS solutions is increasing among SMEs as they come up with attractive offers, which help the SMEs in the marketing activity of the product and delegate contact center agents to pitch the offers to their prospects and existing customers.

By Industry Analysis

Rising Demand for Flexible Customer Relationship Management Solutions to Drive IT & Telecommunication Segment Growth

Based on industry, the market is divided into banking, financial services, and insurance (BFSI), IT and telecommunications, government, healthcare, consumer goods and retail, travel and hospitality, media and entertainment, and others.

The IT and telecommunications segment generated maximum revenue in 2023 and is estimated to grow with the highest CAGR throughout the forecast period. This growth is attributable to increasing demand for flexible and cost-effective customer relationship management solutions. The trend of multichannel communications through a single cloud-based solution is escalating the adoption of unified communication and contact center software platforms.

Moreover, the sector's dedication to providing excellent customer service led to the implementation of CCaaS, which offers advanced features and capabilities. Contact center as a service model that can typically support intelligent call routing, streamline workflows, and handle large call volumes, is critical for efficiently managing telecom customer interactions. 

The BFSI industry holds the second largest market share, after IT and telecommunication, in 2023. The sector had undergone a remarkable evolution over the past few years, propelled by technological advancements and an ever-growing array of financial products. Contact center as a service plays a vital role in this industry by acting as a linguistic intermediaries, addressing the challenges of diverse customer bases across the globe.

COUNTRY INSIGHTS

By country, the market is studied across five countries, namely the U.K., Germany, France, Italy, Spain, and the rest of Europe.

In 2023, the U.K. market held the highest share. Contact center operators in the U.K. are progressively migrating toward cloud-based contact center solutions with improved security requirements. The U.K. has become a hot spot for BPO outsourcing and virtual call center, especially for the U.S. companies looking for locations with English-speaking and lower-cost workforce.

• According to the ContactBabel study, most U.K. contact centers plan to adopt remote or hybrid working by 2024. Additionally, in the next two years, AI is the top technology investment priority for contact centers, and chatbots are now responsible for handling a significant portion of web chats.

In developed countries, such as the U.K., enterprises are outsourcing the contact center operation in other European countries as the salary of contact center agents is low, and the companies in IT & telecom and BFSI sectors require a high volume of agents, diversity and scalability of service and multilingual capabilities. Therefore, the demand for CCaaS is increasing in the U.K.

The German market is anticipated to have the highest CAGR growth. Germany's contact center industry is flourishing, and it is helping companies across the globe with their CRM needs in Europe and abroad. In Germany, a large proportion of customer service work is outsourced to external or third-party service providers, including contact center service operators and providers. These providers are updating their portfolios to the changes brought about by automation and digitalization.

Moreover, a German contact center study found that, in 2020, bots handled 70% – 80% of communications for enquiry-intense companies and industries such as banking & insurance and energy. The rapid growth rate is owing to the rising demand for tools to support customer services that can boost sales. The growing competition in the country across markets fuels the need for customer acquisition by enhancing the customer experience. Thus, Germany witnessed a significantly growing demand for contact center as a service tool across industries.

KEY INDUSTRY PLAYERS

Growing Key Players’ Focus on Partnerships Adoption Propel Market Expansion

Key players operating in the market, such as Genesys, Five9, Inc., NICE, Amazon Web Services, Inc., Talkdesk, and others, seek relevant partnerships and acquisitions to help deliver its clients with advanced and enhanced services. Players adopt these strategies to combine the best of their own concepts and capabilities with the expertise of acquired partners and technologies available in the market. For instance,

• In February 2023, Amazon Web Services, Inc. announced a strategic collaboration with RingCentral Inc. to offer customer communication tools. The partnership aims to connect AWS CCaaS solution Connect and RingCentral UCaaS to boost customer experience.

List of Top Contact Center as a Service Companies in Europe/ List of Top Contact Center as a Service Companies:

• Genesys (U.S.)


• 8x8, Inc. (U.S.)


• Five9, Inc. (U.S.)


• CONTENT GURU (U.K.)


• Talkdesk (U.S.)


• NICE (Israel)


• Amazon Web Services, Inc. (U.S.)


• Vonage (U.S.)


• Avaya LLC (U.S.)


• Odigo (France)


• Orange Business (France)


• NFON AG (Germany)

KEY INDUSTRY DEVELOPMENTS

• January 2024 – NICE acquired LiveVox, a CCaaS provider, to launch a more interaction-focused platform by integrating NICE CXone with LiveVox's proactive outreach AI. This partnership comes when businesses seek to streamline their customer experience operations and incorporate CX AI for improved automation.


• September 2023 – Bandwidth Inc., a company specializing in cloud communications, collaborated with Cognigy and Google to introduce AIBridge. This innovative solution allows businesses to implement voice-based artificial intelligence tools in their contact centers effortlessly. Doing so enhances the speed and efficiency of call resolutions within the communications cloud.


• November 2023 – Five9 joined forces with TELUS International, a leader in digital customer experience, to introduce an upgraded version of its Contact Center as a Service (CCaaS) application platform. This advanced solution is a cloud platform that offers brands AI-powered customer insights, enabling them to provide exceptional customer experiences with a personalized touch.


• August 2023 – RingLogix, a provider of UCaaS solutions for Managed Service Providers (MSPs), announced its integration with Mondago, a distinguished pioneer in Computer Telephony Integration (CTI) solutions. This strategic partnership would enable contact center and voice integration with leading CRM providers.


• March 2023 – 8x8, Inc. introduced new upgrades that use artificial intelligence to improve business and contact center performance, resulting in better customer experiences. These enhancements include the 8x8 Intelligent Customer Assistant and the 8x8 Supervisor Workspace for the 8x8 Contact Center. Additionally, there is now a seamless integration with OpenAI across the entire platform.

REPORT COVERAGE

The research report includes prominent countries across Europe to gain a better understanding of the industry. Furthermore, it provides insights into the most recent industry trends and an analysis of technologies that are being adopted quickly on a European scale. It also emphasizes the market’s drivers and restrictions, allowing the reader to understand the industry thoroughly.

REPORT SCOPE & SEGMENTATION

ATTRIBUTE	DETAILS
Study Period	2019–2032
Base Year	2023
Estimated Year	2024
Forecast Period	2024–2032
Historical Period	2019–2022
Growth Rate	CAGR of 20.7% from 2024 to 2032
Unit	Value (USD billion)
Segmentation	By Function Interactive Voice Response (IVR) Multichannel Automatic Call Distribution Computer Telephony Integration (CTI) Reporting and Analytics Workforce Optimization Customer Collaboration Others (Recording, Dialer) By Enterprise Type Small and Medium Enterprises (SMEs) Less than 50 50 to 250 Large Enterprises 251 to 500 501 to 1000 More than 1000 By Industry Banking, Financial Services, and Insurance (BFSI) IT and Telecommunications Government Healthcare Consumer Goods and Retail Travel and Hospitality Media and Entertainment Others (Automotive) By Country U.K. By Function By Enterprise Type By Industry Germany By Function By Enterprise Type By Industry France By Function By Enterprise Type By Industry Italy By Function By Enterprise Type By Industry Spain By Function By Enterprise Type By Industry Rest of Europe