 Hello, and welcome to this episode of the Analyst Angle. I'm Shelly Kramer, Managing Director and Principal Analyst here at the Cube Research, and today I'm joined by my dear friend and frequent collaborator, Zia's Karavala, member of our Cube Collective Community of Analysts and Independent Analyst all around smart guy. Hello, Zia. Hey, Shelly, how are you? I'm great. Happy Monday. So today we are going to talk about WebEx Contact Center and some of the new announcements coming out of WebEx about AI, Powering Contact Center, and some of the challenges that we see ahead for WebEx as well. So with that, I'm going to dive in a little bit. We had a briefing with the WebEx team late last week, and they shared updates across their suite of offerings. The updates focused on benefits for customers and that sort of thing. I'm going to start by saying, I think the WebEx Contact Center solution is impressive. They have a lot of features that I'm guessing a lot of people really don't know about, and I think that technically they've built an incredibly competitive stack, but it's not a market-leading one. And so I see that the challenge here is communicating to customers and prospects about this differentiated experience that they've created, and they continue to fine-tune. How do we better communicate that to the market? And Zia, I know you and I've talked a little bit about this. What do you think? Yeah, well, I think it's first important to understand why Cisco is in this position where they have, from a technical perspective, what some people think is a market-leading stack, but they don't have to share. Right? If you think a decade ago, Cisco was one of the leaders in the context in the center industry, albeit on-prem. And I remember talking to previous management about how their cloud strategy was nowhere, and previous management thought that the private cloud offering, that HCS or BroadSoft brought them, was indeed cloud. Now, that's one of the challenges vendors have with analyst firms is some count things some way and some count things other ways. And some of the analyst firms had Cisco be number one in cloud because they had the most private cloud seats, right? Now, while Cisco is relishing their position of private cloud and on-prem, along came, you know, 5.9 talk desk and contact all those companies that sort of snuck up behind them and started taking a lot of CCAS share. And then I think it's, you know, there's what's that expression in business? You have to, some people make things happen and some people watch things happen and some people never happen. And at the end of the day, when I think Cisco wondered what happened and along came the new leadership team, which included JavaCon and G2 and people like that. And they set out to actually build their WebEx contact center. And to Cisco's credit, they've actually built, like you said, a contact center stack that's as good as anyone's. Yeah, absolutely. Yeah, now the challenge they have, though, is that the CCAS industry is so crowded today, right? We have all the peer plays. Yeah, as I mentioned, talk desk and NICE and, you know, Genesis and Google Connect. Yeah, 5.9, yeah, and, you know, AWS, AWS crack. And then there's all the UCAS vendors that have also decided to get into contact center. And then you have to ask yourself, how does one insert itself into such a crowded landscape and gain some share? So there's the obvious, we can flip our base, right? Cisco's building us to flip the base. That's not when in the end game. And I think this is where a lot of the work they've done in the area of AI, you believe that cloud was the last big transition and contact center, then AI will be the next big transition and contact center. But the challenge I see there, Shelley, is every, when you go to all the competitive pages, it's not like they're not doing AI. And so in front of- Absolutely. Everybody's focused on this. Trying to prove your AI is different and better than the other AI is tough. And I've used the analogy, it's like, if you drive a car and it's got lane change alert in it, like can you really tell the Ford's or GM's is better? They both are better than what you had, they're not having it. And so in a lot of cases, having AI in my context, I'm just better than not having it, but it's tough to tell whether this AI is better than that AI. Yeah, absolutely. And that differentiation is, I think the biggest challenge here. And while WebEx is a strong brand, I don't think it's a very well-known brand in contact center, right? And that's the other issue that they're running into, I think, is just that the WebEx brand is well-known collab for being secure, being resilient, when you need it for work, all the big governments use it, but it does not have the same kind of, the brand identity in contact center. Right. You know, one thing I think that is a really important part of WebEx's value prop is that Cisco is so well-known for security and building on a foundation of security. And I think when you extrapolate that across any of their offerings, whether it's contact center or anything else, I think that remains something that's kind of important and something that other competitors have occasionally taken a knock about. But I think that, you know, I wanted to touch a little bit about something that I think is really cool that Cisco is doing in some of these AI integrations, designed, you know, of course, to up-level the overall customer experience to make the agent experience better, all of that sort of thing, you know, and some of these things that we'll be talking about were announced at last October, in late October at WebEx One. And I think now we're starting to see some of these roll out. And some cool things, you know, they've got noise block. Well, doesn't everybody kind of have noise block? And, you know, I think that being able to prove that our noise block is better than somebody else's is a matter of experience, right? You know, they've got a large language model and they also have what is called a real-time media model. And these things together are, you know, powering what they hope are better customer experiences, clean audio, clear transcription, summarization, you know, all of this helping to lead to better informed decisions. And I think that, you know, when G2 was talking about WebEx's RMM, you know, and the fact that a large language model alone isn't enough. And of course, this is a video first company and we're talking about all things visual. And so, you know, this RMM using AI for audio and video in new and powerful ways. I think that's a differentiator. And personally, you know, how many times have you, first of all, like I avoid having to call a contact center like the plague, but how many times have you had to call customer service and heard so much noise in the background that it's sometimes kind of hard to get your thoughts collected? Has that happened to you? Yeah, and I think that the noise block is interesting because everybody has it, but theirs actually is better. Because they have three types of noise block, they have the traditional one everybody has, then they have one that's optimized for voices only. So if you're in a loud space and there's four people talking, people can hear, then there's one called optimized for my voice. So you could be in Starbucks with a bunch of people talking behind you and they'd only hear your voice. Now, from a contact center perspective, that's important because if you have an at-home agent, you can have your kids screaming in the background. People, that might be distracting for the agent, but you wouldn't know. And so that's a great example of a technology where they have the benefit but because everybody markets noise block, their noise block doesn't really bubble to the surface. And the RMMs are interesting too, because you're right. LLMs have been looked at as a way to enhance text and speech, but I think RMMs do a good job of video, but also I think it helps with emotion detection if we're gonna build smarter bots that are able to do empathy and things like that or even alert an agent when to imply empathy. But again, Cisco's the only one talking about RMM. So making that a marketable differentiator when you're a company of one, right, a market of one is a challenge. Yeah, absolutely. And really the end game here is of course better customer experiences, right? So I think all those things played nicely together. I think that one of the things that I know Cisco is doing is trying to help drive proactive comms as it relates to contact center things. So being able to get out in front of problems, anticipate situations, and so being proactive is one thing and then offering up self-service options is another thing. And as you know, we are a community of do-it-yourselfers, right? I really don't wanna talk to a person. I really, I just wanna be able to solve my problem. So being able to have functionality that allows me to self-serve, identify what the problem is I'm having and how to fix it. I think that's really cool. And then being able to pair that with human engagement that's added in when it's determined it's necessary. I think those are all good things. Those again, are those unique to WebEx? Not necessarily, but I think it's all good functionality and strategic makes sense. Yeah, and I'll be curious to see when the box gets so good that we prefer them over people, right? I've used the analogy that if you think of the rise of Oakland Table and Resi and things like that, it was a day where people thought, oh, there's no way I'm gonna talk to book online when I can call the restaurant. Now it's like- So it's easier. Yeah, right. Now you don't have online reservation. You might not use it. So, but I think this is where- I think what you're saying, you might not like, it's like, I can't make a reservation online. I've got to call. I'm gonna go somewhere else. I mean that, I think that happens. I do that. But this is where I think, it's not just Cisco, all the vendors, if they're gonna try and step above the noise of everyone else, I think this is where customer case studies, being able to tell the stories becomes important. And while they've got a pretty large base of customers and it'd be good to see those become actualized in a public facing way so people can understand that this noise block is different than this noise block. There are RMMs do this that those can't. And I suppose they're, in fairness, this is called, they're relatively new with WebEx Contact Center, right? So I'm supposed to be building those, but that's really gonna be what is gonna, I think we'll determine whether they become a market leader or they remain kind of this nichey vendor. Well, and I will say this, you're in the same briefings that I am. And when you have the opportunity, I know that they are in the midst of customer betas right now with some of this functionality. And when you see some of the brands that are involved in these beta tests, I think that's, so we approach this and we know more than the average consumer, right? And we can see, wow, this is like a cadre of some really big companies across multiple industries and different use cases and things like that. So it'll be interesting when those customers come out of beta and when they're able to share customer stories. I think that, as you said, is gonna be really impactful because, I mean, it's human nature to go, oh, wait a minute, I hadn't really thought about WebEx Contact Center, but they're using it and they're using it and they're using it. The other reason for them is like, does the UCCC integration, like where does it matter and where it doesn't? Because I've talked to some of their channel partners and as they've engaged up market, like big enterprises, it is different buyers. And so just because you're using WebEx for CC or UC doesn't mean you want to use it for CC. In fact, if you look at all the vendors that offer both, they tend to have success down market, right? When you do have a single buyer, a smaller IT team, but as soon as you get up to where you have separate buyers that UCCC integration doesn't matter as much. And should it matter? Probably. I think there is a certain level of efficiency by it, but it's interesting that when you just look at the data around the number of UC people, tools people use, they're still using Teams for this and Zoom for this and WebEx for this, makes sense for this, right? So it's not like even on the UC side, we've consolidated down to one. It's unlikely that a large enterprise we're going to consolidate down to a single UCCC platform. And so from that degree, the tie into the WebEx suite doesn't provide as much of an advantage as a wind down market. Right. No, absolutely. One final thing I want to mention here before we go on and just cover a few of the other things mentioned in last week's briefing was, and I spent a lot of time in demos at WebEx one in October on this. And Cisco is really focused on agent wellbeing and they're really focused on up leveling supervisor effectiveness. So, I cannot imagine, I can imagine worse jobs and being a contact center agent. Okay, let's get real, but that's a hard job. You are talking with people who are not having their best days. They're not calling because they're happy, right? And so agent burnout is a real thing. And so the platform is built in such a way that it has agent wellbeing, sort of detection built into it. So you can see what kind of responses are happening and that sort of thing. And I think that helps supervisors be more proactive. Part of this solution functionality also includes automatic conversation summaries, recommended next to actions, which makes a contact center agent's job much more, much less of a heavy lift, I guess. And then it provides agent answers and suggested responses, I think, which are helpful. And then it also provides coaching highlights for supervisors. So, keeping the agent in a good place, but also providing the information and the tools to supervisors that you need to do a little teaching, to do a little mentoring and hand-holding or to tell you that perhaps this person is in the wrong role. Yeah, I think, in fact, in this era of hybrid work, I think it's technology that's gonna allow managers to manage better and agents to work better. If you think of the old way of managing the contact center, you would actually, the manager would physically walk around a bullpen listening for calls that have gone awry or frustrated, right? Yeah, now the technology is gonna have to do it for you because everyone's at home. And so that is an interesting set of features that I don't think the industry at large talks enough about is the way you can change the management of the contact center. In fact, I think that's one of the interesting things to look at from a differentiator standpoint is can your product help me reduce agent churn? Because agent churn, like let's face it, we can talk about all the things going on in the contact center, but agent churn is the real killer, right? You lose your workforce every year, that's a lot of money and a lot of training. Yeah, absolutely. You know, another thing that I think is pretty cool, those surveys that customers get, right? That asking to rate an experience, well, no surprise, 80% of those, this data comes from Cisco by the way from Webex, 80% of surveys go unanswered. So they have some functionality here that they're calling automated CSAT scores. And so this is AI powered functionality that automatically kind of fills that data gap by assessing agent interactions to get a more complete picture and then again, that helps drive rescaling decisions or other kind of decisions as it relates to that. These sentiment insights also help show when it's monitoring when a customer starts to get more upset and sees that escalation happening. And so then you know, this is where we need to bring in a supervisor or something like that. So I think that's kind of some cool functionality. It's everything. I talked to one company that was using that feature from one of the competitors and their CSAT actually went down because in general, people just answer one or five and their agents do a pretty good job of alerting the audience. Like it's like, when you take an Uber, do you ever give anything less than five? No, I don't. So what if- I only have extreme, extreme circumstances. What if Uber had an AI enhanced score where they used how fast the person drove, brake pressure, whether they were driving too slow, whether the music was too loud, rarely would people get five, right? And so I think for the most part, companies have no idea what their CSAT is. Yeah. I think that- I think you make a really good point. This is a double-edged sword here because I will tell you this, when I do fill out a survey, I always remember that it was another human being that I was dealing with. And I always also, and I think you're saying, yes, I think we may be the exceptions here rather than the rule part of it is, because we're kind of immersed in this space, but I just know that I'm not going to, and for the most part, I will say this, for the most part, sometimes I'm frustrated by customer service interactions, but it's not usually the agent's fault. It's an answer that I don't like or a resolution that I don't love or so that makes me frustrated. But when I'm filling out those scores, those surveys, I never forget that that's another human being that I'm dealing with. And so I try not to throw them under the bus. So you make a really good point about how this could actually not be the best thing ever. Well, maybe not for the agent, but certainly for the company to actually have a good understanding of what their CSAT is, I think is very important. Because it doesn't know where to fix and what not to fix. Absolutely, yeah. Yeah, very interesting. So let's talk a little bit, shift a little bit and talk a little bit about some of the broader WebEx announcements. Obviously investing in audio and video intelligence are super important and we've got a focus on delivering immersive experiences using AI, which is language intelligence, audio intelligence, video intelligence. I love the, they took us through a demo, a quick demo of the Audio Intelligence AI codec, which reduces bandwidth with outer reduction in meeting quality. And this is embedded in the WebEx app. And that may sound like a super nerdy thing, but the reality of it is when you can get great results with less bandwidth, everybody wins. So what stood out to you with regard to these other announcements? Yeah, I really liked that one, in fact. And I wasn't keen on the way they demoed it in that they showed the same call and the quality of them was the same, but they said this used 60K and this used 60K, right? And what they should have done was run it over a 10K line and then one call would have been clear and the other one wouldn't have been. That's great. That would have demonstrated a little bit better the difference, but I do think that's a very interesting feature that allows you to use WebEx in places. Do you think at third world countries, when you've only got satellite connectivity, things like that, even though we toured the Johnson Space Center, right? When they did WebEx in space. Yeah. Now being able to do WebEx in places you can never do it before. I think that's their whole thing is around power and inclusive future. This actually does, it brings WebEx to people that couldn't use it before. Yeah, I agree. That was typical, right? You need a lot of bandwidth, absolutely. The other thing that we walked through a little bit was the WebEx AI Assistant. And so this is designed to pull together all of AI tooling for users in a coherent way. And some of this is, it can be used to detect when you step away from a meeting and giving you a placeholder there so that you can walk back. I have that happen sometimes, you know? I mean, I office from home, the doorbell rings in the middle of a briefing or a meeting. I've got to step away or something like that. So I like that, you know, I like that kind of placeholder that I can pick back up. I like summaries and action items or a replay of meeting highlights. But again, you know, those things are not really all that unique. But I think they're important. I think they're important. I think the catch up. I think the secret though is trying to make it as invisible as possible. If the user actually has to go, what did I miss? They're not going to do it. If it says, here's what you missed, right? That's better. And I do like, I think how Cisco's built the same gen AI agent across all their products. It's the same one they use with the security team and things. So they're bringing a little consistency to it, which is good where historically that hasn't really been there beforehand. Yeah. Well, what else? I kind of try to hit on the things that caught my attention the most. Is there anything that you're thinking about that we haven't talked about? No, I think you hit all the highlights there. And I think, you know, the big thing for them is now can they, they've done a great job of building these AI capabilities. Can they turn them into things that are a little more actionable so customers can understand and you know, they can use it to kind of reinvigorate that group. Yeah. And I think it really goes back to where we started this conversation that they have what could well be, you know, a best in class stack here, but it is, you know, it's all about communicating that, right? Some of it's marketing, some of it's working with your channel partners and enabling them and that sort of thing. So it'll be interesting to watch this rollout. You know, I am and have been a long time fan of Cisco and the WebEx platform. And I use it on a day to day basis for collab and video and all that sort of thing. And I think they're making great strides in contact center, really looking forward to playing with the AI assistant. I think that, you know, I also should mention, there are a couple of things like the agent wellbeing with agent burnout detection is Q1 2024. The automatic conversation summaries and recommended next actions are Q3 2024. The proprietary agent answers and suggested responses are coming in Q4, coaching highlights for supervisors coming in Q4. So some of this stuff isn't, you know, in market right now, but it'll be interesting to see this rollout and people using it and getting feedback. And also- On the landing ground where they're going, enterprise connects coming up, right? A couple months from now, I'm sure we're gonna see more there. So it's a matter of continuing the momentum. Yeah, absolutely. Well, see us as always. It's a pleasure spending time with you. Thanks for hopping on today. And to our viewing and listening audience, we'll see you next time and have a great rest of the day. Thank you.