Microsoft quietly entered the contact center market in 2022, building on steady development of support tools and the acquisition of Nuance to offer a modern, digital-first, contact-center-in-the-cloud suite called the Microsoft Digital Contact Center Platform. This comes at a time when the market for contact center operational systems is in flux due to shifts in how consumers behave and the advancement of core technologies that disrupt traditional ways of doing business. Vendors in the space increasingly need to rely on broad platforms that support tools like artificial intelligence (AI), workflow automation and customer data management, in addition to traditional interaction handling. This has raised the stakes for legacy contact center vendors and opened the door to newer, larger entrants like Microsoft, Zoom and Amazon.
One of Microsoft's key strengths in contact centers and customer experience (CX) is its suite of Dynamics 365 applications, which includes modules for sales, customer service, marketing 
and field service. These applications are built on top of the company's Azure cloud platform and integrate with other key Microsoft products like Power BI and Teams. When coupled with Nuance’s natural language processing (NLP), the platform serves many of the extended functions needed by service teams using tools already in place for multiple purposes. Nuance also closely connects Microsoft with systems integrators and partners with deep direct experience in contact centers.
The ubiquity of Microsoft’s products in businesses of all sizes means that organizations can construct a reasonably full-featured customer support toolset with or without the help of a legacy contact center vendor. The company added voice as a channel to Teams and Dynamics 365 CRM in 2021, which allowed the company to offer advanced functionality (e.g., AI, intelligent self-service and deep analytics) directly supporting service use cases. Other contact center vendors have been keen on offering integrations with Teams for some time, aware that, in many organizations, Teams functions as a default voice channel that merges customer-facing employees with other workers who assist customers behind the scenes. In its initial rollout, Microsoft announced partnerships with NICE, Avaya and Genesys. This signaled a desire to work with the existing industry structures, rather than against them. (And this strategy has worked well for Amazon, another outsider that entered the contact-center-as-a-service (CCaaS) market based on the availability of relevant technology used in other contexts.)
Microsoft’s long enterprise experience also means that IT teams are thoroughly comfortable with the details of using and connecting its varied products in multiple use cases and across departments. For some organizations, this may mean that the contact center will become a less-siloed entity, better aligned with other CX-related teams and processes through common analytics, communications and employee management tools. For smaller organizations, the Digital Contact Center Platform can act as a launch point for building a more formal service center using existing parts, while having access to as much or as little of the advanced AI, automation, security and self-service applications as they feel comfortable with.
The company's AI platform, Azure Cognitive Services, provides a range of pre-built APIs and SDKs that can be used to add NLP, image and video analysis to their applications. The integration of AI and machine learning 
(ML) into Dynamics 365 provides insights into customer data and predictive analytics that can be used to improve customer engagement and sales. Ventana Research asserts that through 2026, most organizations will identify digital communications needs as a priority for their contact centers over voice technologies.
Microsoft has also developed collaboration and workforce engagement tools in a product called Context IQ, which was built for Dynamics 365 before it was part of a formal contact center package. Context IQ can be used to surface relevant information for agents, including rudimentary agent assistance in the form of AI-recommended knowledge articles.
The key gap in the Digital Contact Center Platform so far is in agent-management functions. It provides an integrated agent desktop but is lacking in advanced quality monitoring, coaching and performance-management features. It is likely that Microsoft will improve these capabilities in subsequent releases, as they are essential to effective modern contact center management. Developing or acquiring these functions should be relatively easy for a firm of Microsoft’s size and scale, especially given how mature the basic technologies in agent management have become.
Taken as a whole, the components within the Digital Contact Center Platform (whether previously existing or new) represent a robust competitor to established vendors. The offering is an interesting option for companies looking to build more formal service structures without disrupting (or duplicating) technology infrastructure that is already in place. The presence of Microsoft in this market suggests that large, enterprise-wide platforms are an attractive pathway to breaking down silos between the contact center and other CX teams in marketing, sales, commerce and back offices. And it suggests that the market for contact centers is shifting from a unique use case to a broader, less well-defined set of functions that are somewhat removed from traditional interaction routing and handling.
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