Zoom has agreed to buy “Contact Center as a Service” (CCaaS) provider Five9 for $14.9 (£10.8) billion in an all-stock transaction that turbocharges Zoom’s bid to expand aggressively into the rapidly transforming contact centre market — an ambition emphasised by CEO Eric Yuan on the company’s last earnings call.
“The acquisition is expected to help enhance Zoom’s presence with enterprise customers and allow it to accelerate its long-term growth opportunity by adding the $24 billion contact center market,” Zoom said.
Five9, founded in 2001, names over 2,000 customers globally and reported quarterly growth of 45%, for record revenues of $137.9 million in Q1; although it remains loss-making. It has been partnering with Zoom for some years, with existing pre-sales and provisioning relationships between the companies’ teams.
What is Five9?
Five9 provides a microservices-based architecture built on modular components communicating via REST APIs that lets customers move expensive legacy contact centre setups to public or private cloud (it is cloud-agnostic) then layer in a range of software-based services on top, including AI-powered analytics.
Users get a single interface for all chat-based communication channels including social media, websites, and text/SMS, call, video. Five9 also boasts advanced Natural Language Processing (NLP) and AI capabilities, along with, pre-packaged CRM integrations with Microsoft, NetSuite, Oracle, Salesforce, and ZenDesk, along with predictive dialling, etc. for contact centre teams.
Recent Mitel agreement
Along with a partnership with Zoom, Five9 has also built relationships with more traditional Unified Communications-as-a-Service (UCaaS) and telephony hardware providers like Mitel — the latter agreement announced in a May 2021 deal that gave Five9 access to “Mitel’s global customer base and vast channel partner ecosystem”
Zoom described today’s Five9 acquisition as ” complementary to the growing popularity of its Zoom Phone offering. Zoom Phone is a modern, cloud phone system that offers a digital alternative to legacy phone offerings, enabling organizations to connect and interact in new and convenient ways to keep businesses moving.”
CEO Eric Yuan had suggested the contact centre would be a focus in June 1, 2021 earnings call, saying he wants Zoom to be an “Operating System [for a] people-centric interface… When it comes to contact center, stay tuned. You will see something. Hopefully, we can do something around the contact center. That’s also a big market.”
The transaction, which is expected to close in the first half of calendar year 2022, is subject to approval by Five9 stockholders, the receipt of required regulatory approvals, and other customary closing conditions. Following the close of the transaction, Five9 will be an operating unit of Zoom and Rowan Trollope will become a President of Zoom and continue as CEO of Five9, reporting to Eric Yuan.