Analyst(s): Keith Kirkpatrick
Publication Date: February 27, 2025
Zendesk has signed a definitive agreement to acquire Local Measure, a provider of CCaaS and AI-powered voice solutions. The acquisition enhances Zendesk’s AI voice capabilities, strengthens its integration with AWS’s Amazon Connect, and supports its expansion into complex enterprise service environments.
What is Covered in this Article:
- Zendesk to acquire Local Measure to enhance AI-powered voice capabilities and enterprise reach.
- The integration with Amazon Connect strengthens Zendesk’s AWS partnership and cloud contact center offerings.
- AI-driven automation expands Zendesk’s ability to unify customer service and sales functions.
- The acquisition positions Zendesk to compete with cloud-based contact center providers.
The News: Zendesk has reached a definitive agreement to acquire Local Measure, an Australian provider of Contact Center as a Service (CCaaS) and AI-driven voice solutions. This move is designed to bolster Zendesk’s AI-powered voice capabilities, strengthen its presence in large-scale enterprise service environments, and deepen its integration with Amazon Connect—AWS’s cloud-based contact center solution. Local Measure’s technology enhances call routing, AI-driven automation, and real-time service insights, allowing Zendesk to better support high-volume customer interactions. The acquisition, structured as a scheme of arrangement under Australian law, is pending shareholder and regulatory approvals and is expected to close by May 2025.
Zendesk to Acquire Local Measure to Strengthen Its AI-Driven Contact Center Solutions
Analyst Take: Zendesk’s acquisition of Local Measure is a strategic move to enhance its AI-driven voice capabilities and deepen its collaboration with Amazon Web Services (AWS). Set to close in May 2025, pending regulatory approval, the deal will integrate Local Measure’s Contact Center as a Service (CCaaS) platform with Amazon Connect. This expansion comes at a time when enterprises are ramping up investments in AI-powered customer service solutions, positioning Zendesk to meet the growing demand for advanced voice technologies.
Expanding AI Voice Capabilities to Meet Enterprise Demand
Zendesk has long been a key player in customer service solutions, but its existing voice platform, Zendesk Talk, has primarily catered to smaller businesses. As enterprise customers demand more advanced AI-powered voice solutions, Zendesk needed to fill that gap. Local Measure’s platform, designed for high-volume, complex service environments, delivers advanced call routing, AI-driven automation, and real-time service analytics—capabilities that align with Zendesk’s enterprise growth strategy.
Zendesk CEO Tom Eggemeier emphasized that voice remains a crucial communication channel, with research indicating it still accounts for 50% to 60% of all customer service interactions worldwide. Acquiring Local Measure would allow Zendesk to better serve enterprise needs by integrating AI-driven voice capabilities that streamline customer service and sales processes while boosting automation and efficiency.
Strategic Strengthening of AWS Partnership
Local Measure has a long-standing relationship with AWS, having built its CCaaS solutions on Amazon Connect’s infrastructure. This acquisition further solidifies Zendesk’s alignment with AWS, enabling deeper integration with Amazon Connect’s AI-powered automation, agent assist tools, and cloud-based contact center infrastructure.
Zendesk CEO Tom Eggemeier likened the Zendesk-AWS partnership to a three-legged stool: AWS provides cloud infrastructure, Amazon Connect delivers AI-driven contact center technology, and Amazon Bedrock offers access to advanced language models. By leveraging this tech stack, Zendesk is better positioned to enhance real-time automation, smarter agent assist tools, and a fully integrated AI-powered voice solution.
A Competitive Response to the Growing AI Contact Center Market
The AI-powered contact center industry is evolving rapidly, with projections indicating that up to 80% of customer interactions could be automated within five years. This shift makes AI-driven automation a crucial competitive differentiator. With Local Measure’s technology, Zendesk enhances its automation capabilities across both voice and digital channels, strengthening its position in a market dominated by players such as Twilio, Google, and Replicant.
Local Measure has been experiencing strong growth, doubling its revenue annually over the past few years, with a customer base spanning industries such as travel, telecommunications, and government. This acquisition not only boosts Zendesk’s enterprise capabilities but also likely improves its ability to compete with other cloud-based customer service providers.
We expect that Zendesk, which announced an outcome-based pricing model for AI agents, through which Zendesk customers will only pay for each successful query resolution handled by AI agents, will continue to utilize this pricing model for self-service use cases. For human-assisted scenarios, Zendesk has said they will also offer other types of pricing, including consumption-based and seat-license-based AI pricing, to ensure that customers are able to more effectively connect the cost of AI with their desired operating model.
Regulatory Approvals and Next Steps
The deal is structured as a scheme of arrangement under the Australian law, meaning it requires shareholder and regulatory approval before finalization. Given Local Measure’s established alignment with AWS and strong enterprise relationships, the approval process is expected to proceed smoothly.
Local Measure CEO Jonathan Barouch has confirmed that all employees are expected to remain with the company post-acquisition, indicating a focus on growth rather than cost-cutting. Overall, the acquisition is a strategic move that expands Zendesk’s enterprise reach and strengthens its position in the rapidly evolving AI-powered contact center market.
What to Watch:
- AI-powered automation continues to evolve rapidly, and enterprises are increasingly adopting generative AI-driven customer service tools. Zendesk must ensure its AI voice capabilities remain at the forefront to meet growing expectations for efficiency and personalization.
- The integration of Local Measure’s AI-powered voice solutions with Zendesk must deliver seamless performance at scale, particularly for enterprise customers managing high-volume interactions. Any challenges in deployment could slow adoption.
- Competitors such as Twilio, Google, and Replicant are also investing in AI-driven contact center automation. Zendesk must demonstrate clear advantages in AI-driven voice solutions to maintain a competitive edge.
- The success of the acquisition hinges on a smooth regulatory approval process in Australia. Any delays in securing shareholder or regulatory approvals could push back the expected closing in May 2025.
See the complete press release on Zendesk’s acquisition of Local Measure to expand AI-powered voice solutions on the Zendesk website.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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Author Information
Keith has over 25 years of experience in research, marketing, and consulting-based fields.
He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.
In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.
He is a member of the Association of Independent Information Professionals (AIIP).
Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.
