8x8's (Nasdaq: EGHT) latest acquisition of Contactual, a cloud-based call center and customer interaction management solution provider, illustrates the ongoing moves service providers are taking to capitalize on the hosted contact center trend.
According to Frost & Sullivan, hosted contact center revenues will grow at a compound annual growth rate (CAGR) of 34.1 percent from 2009 through 2013.
Coming on the heels of its previous purchase of Zerigo, 8x8 expects to close the acquisition of Contactual before the end of September 2011 in an all-stock transaction that it says will not exceed 6.7 million shares of common stock of 8x8.
By purchasing Contactual, 8x8 will add call center services to its cloud service portfolio that consists of 20 cloud services including VoIP, conferencing, video and cloud computing. When the deal is complete, 8x8 will extend Contactual's Call Center solutions on a resale basis to all of its channel partners through its recently launched go-to-market channel program that's focused on cloud services.
While the acquisition is new, 8x8 and Contactual are hardly strangers as 8x8 has been reselling Contactual's call center technologies as part of its business services suit since 2007.
Prior to the acquisition agreement, Contactual had already made a name for itself with a diverse set of customers that range from Fortune 500 companies to small and medium businesses, and distribution partners serving the U.S., Canada, Europe, Japan and Australia. In 2010, Contactual reported $8.3 million in revenue, which included a 10 percent contribution from its reseller relationship with 8x8.
What's resonated with Contactual's customers is its OnDemand Contact Center. By allowing companies to deploy call center agents in any location that has an Internet connection, they can reduce voice telephony hardware (PBX, telephone stations) costs.
Led initially by large service providers, including CenturyLink (NYSE: CTL) and Verizon (NYSE: VZ) purchasing Savvis and Terremark, respectively, 8x8's purchase of Contactual tops off a flurry of merger and acquisition activity that it's been emerging in the service provider space.
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