By the end of this article, you will see how much Microsoft has influenced the contact center space. This growth is mainly because the ongoing development of Microsoft Teams and the rise of AI integrations. Today, we’ll dig into the latest developments in Teams telephony, Microsoft’s role in the contact center landscape, and how AI is shaping the future of customer interactions.
1. The evolution of Microsoft Teams telephony and unified communications
Cloud growth and Teams’ expanding user base
Initially driven by the urgent need for remote meetings, the move to cloud platforms has accelerated, cementing the idea that UC is destined for the cloud. Microsoft Teams has exploded in popularity. Boasting over 320 million monthly active users and more than 20 million Teams Phone users. This growth underscores a broader trend: businesses are moving away from traditional phone systems and opting for cloud-based telephony, driven by the scalability and flexibility it offers—particularly for knowledge workers.
“Phone systems are just ticking along. While no one is doing new on-premises deployments, companies are simply waiting for their PBXs to reach end-of-life or end-of-support before transitioning to cloud-based solutions.” - Tom Arbuthnot, Empowering.Cloud
2. The evolving Microsoft contact center ecosystem
A market full of options and innovation
While cloud adoption has been a rapid up and to the right rise for UCaaS, the contact center market lags behind. The space remains split with a variety of on-prem and cloud. Microsoft’s approach to contact center often begins with encouraging small to medium size businesses to use Teams native capabilities, and as their needs for advanced routing grow, they consider stepping up to full-fledged contact center solutions.
This transition raises questions: is Teams’ built-in routing functionality sufficient, should I use the new Queues App, what about the 25+ Teams certified contact centers, should I keep UC and contact center separate?
Microsoft’s multi-tiered contact center strategy
Microsoft offers several levels of contact center functionality:
- Native Teams capabilities: Basic call queues and auto-attendants cater to simpler routing needs.
- Queues App: Recently added to Teams Premium, this app offers call queues, supervisor controls and reporting without being a full-fledged contact center.
- Certified Teams contact center integration: Over 20 Microsoft-certified contact center partners offer options from skilled-based routing and omnichannel queues to real-time reporting and conversational IVRs.
- Dynamics 365 Contact Center: Positioned for high-end, large-scale deployments, this solution targets enterprise-level needs with deep AI integrations. Dynamics 365 Contact Center represents Microsoft’s bid to compete with major players like Genesys, Five9 and NICE.
3. Easing into AI: The balancing act amid AI hype in contact centers
Gradual adoption over “AI-first” solutions
The push for "AI-first" in contact centers often overestimates the readiness of most businesses. While enterprise organisations (~1,000+ employees) may embrace AI rapidly, smaller and mid-sized companies face real challenges in scaling up their AI capabilities.
There needs to be a measured approach by introducing AI functions that complement customer service operations rather than overhauling them entirely.
Like the gradual adoption of Microsoft Teams Phone, implementing AI, especially conversational AI for customer-facing interaction, needs to be crawl, walk, run. AI is still crawling; it’s worth matching that pace right now.
Choosing the right level of complexity
In reality, most organisations are still exploring foundational AI use cases, like improving customer data collection or automating routine agent tasks, without diving into complex automation.
Deploying AI in customer-facing roles warrants caution, as mistakes can be costly. Even tech-forward organisations hesitate to rely on chatbots or voice AI for complex interactions, focusing instead on internal applications where mistakes are less public.
The journey parallels the shift to omnichannel, where despite demand, only a small percentage of contact centers have shifted to true omnichannel interactions.