A New Chapter in WEM: Verint and Calabrio Merge
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Yesterday marked a sad but inevitable day for Workforce Engagement Management (WEM). Calabrio, the last notable independent solution provider in the WEM space, is now part of a larger story. For those following the industry, the writing was on the wall from the moment Tom Goodmanson departed as CEO in early 2023.
Thoma Bravo (TB) has a track record of acquiring strong, leading vendors in growing markets, and Calabrio fit that mold perfectly. I know this firsthand: as the lead analyst for WEM at Gartner, I provided Calabrio with the strategic guidance over several years that helped them move from a Niche to a Leadership position in my WEM Magic Quadrant. In fact, I valued them so highly that I joined Calabrio as CXO in 2022 for a period.
Given TB’s buy, improve and sell model, it’s reasonable to assume it acquired Calabrio in Q1 2021 to grow the company and then sell it to a CEC or CCaaS vendor. However, two major events disrupted that plan.
COVID-19 and The Rapid Rise of AI
The buying cycle impact of a pandemic and a sudden acceleration in AI innovation could not have been foreseen. As CEC and CCaaS vendors aggressively invested in AI, they sought “low-hanging fruit” use cases, such as automating the quality management (QM) and coaching functions, which were core pillars of WEM, (see our research Navigating the Disruption: Balancing AI Integration and Workforce Engagement Management). This adjacent market encroachment on Calabrio’s core value proposition forced them to renew focus on the other key pillar: Workforce Management (WFM). Arguably, the most difficult to build a solution for.
CEC and CCaaS vendors remain much weaker in WFM, which would have influenced Calabrio’s go-to-market strategy to focus heavily on selling WFM first, then attempting to cross-sell QM, in place of its customers incumbent CEC/CCaaS offerings. This is a difficult challenge and likely limited the company’s ability to grow in line with TB’s original ambition. More importantly, its original suitors may have been discouraged by the new overlap in functionality that wasn’t there only two years prior.
Not All Mergers are Equal — Experience Matters
With TB acquiring Verint, the obvious reimagined path forward would be to merge Calabrio with this established WEM leader. Verint already had a strong platform and thousands of customers. Verint entered the WFO space in 2007 when it acquired Witness Systems to strengthen its QM offering. Witness itself had acquired WFM vendor Blue Pumpkin in 2004 to become the first WFO vendor. Note: In 2017, I rebranded WFO to WEM to emphasize employee engagement alongside workforce optimization. Since then, Verint has expanded its WEM capabilities through acquisitions, including GMT and EG Solutions for back-office WFM, Verba for compliance recording, and Utopy for interaction analytics.
Verint isn’t shy of an acquisition or two. Their history is littered with purchases and my mind boggles at the level of technical debt that must exist in that company – off the top of my head KANA, OpinionLab, Next IT, ForeSee, Conversocial, Transversal, and Cogito are to name but a few. That said, this track record suggests that TB’s integration of Calabrio into Verint should be operationally smooth, with strong customer support expected. Naturally, some staff streamlining is likely, and the two overlapping WEM portfolios will probably undergo careful functional consolidation over time.
Perhaps WEM Isn’t Dead After All?
But beyond the typical merger challenges lies an exciting opportunity. There is a new story that needs to unfold that applies WEM principles to AI-agents. In the same way human agents are strategically planned for, recruited, onboarded, scheduled, adjusted in real time, evaluated, improved, and promoted – the same mindset will be needed for the increasing army of digital agents. What about supporting peak-season BPO digital agents? Temping agencies with digital agents for hire? Consumer’s hiring out their personal assistants rather than themselves? The mind boggles. Careful “agent” management will be needed.
Combining Verint’s AI-focused customer experience automation with Calabrio’s product team and WEM expertise could spark a truly innovative era in digital workforce management. In short, perhaps WEM isn’t dead. If anything, we may be on the cusp of a new era: digital employee WEM, enabled by an unparalleled CEC and WEM brain pool. Verint and Calabrio now hold the ball, how they play it could reshape the future of workforce engagement.
