What's New with Cloud Communications - Interactive Intelligence

Jason Alley, Cloud Solutions Marketing Manager at Interactive Intelligence, joins Jim Burton of UCStrategies in this Executive Insights podcast for a conversation about what's new in the world of cloud at Interactive Intelligence, including financial results for the second quarter and first six months of 2013. Jim and Jason discuss what's driving growth, where new cloud business is coming from, important new functionality, international expansion, and what to expect in the future.

Jim Burton: Welcome to UCStrategies Executive Insights. This is Jim Burton, and I'm joined again by my friend Jason Alley from Interactive Intelligence. Jason and I have been planning this podcast for several weeks now but we decided to hold off until after Interactive's earnings announcements because there was some good information there, and some information that would be more timely if we could talk about it after the announcement; so that's why we've held off a little bit. So let's just get started.

Today's focus topic is the cloud. So what's new in the world of cloud and Interactive Intelligence?

Jason Alley: Thanks, Jim; it's an honor to be here; thanks for having me. We did recently announce our financial results for the second quarter and first six months of 2013, and it was pretty exciting on the cloud front. We had an exceptional year-over-year increase in total orders in the quarter driven by a more than 400 percent increase in cloud-based orders, which included the signing of the largest contract in the company's history. And to be more specific, cloud-based orders in Q2 were up 469 percent over the second quarter of 2012, and comprised 64 percent of total orders. Also worth noting is the fact that for the first six months of 2013, cloud-based orders were up 262 percent over the first six months of 2012. And from a revenue perspective in Q2, cloud-based revenues increased 56 percent. For the first six months of 2013, cloud-based revenues increased 49 percent. So you can see that for both the quarter and the first six months of 2013, we've experienced very strong growth in our cloud business, which is pretty exciting.

Jim: Those are great numbers and having tracked Interactive Intelligence for quite a number of years, quite a number maybe only three years, that trajectory - that hockey stick is going up and it's been going up for quite a while. So what do you feel is driving this strong growth?

Jason: Well, the cloud has caught fire in general, offering benefits such as increased flexibility, faster deployment time, lower initial capital investment and reduced IT requirements. If we look at the Interactive Intelligence CaaS offering, it's really become the solution of choice for larger mission critical contact centers looking to move to the cloud and I believe for really three reasons.

First is the level of trust offered; we offer secure and reliable service, as well as an experienced, proven and stable partner who is public, profitable and considered a leader in the contact center space.

Secondly is the breadth of functionality provided. With CaaS, we provide the broadest inbound and outbound multi-channel contact center and UC functionality developed and delivered by a single provider.

And then finally the third reason is the level of flexibility we give our customers in order to customize applications, integrate with existing solutions, deploy globally, and also be able to deploy in various models. What's interesting, too, is in addition to our success at the high end of the market, something we're really excited about is our expansion into the small contact center market with our CaaS Small Center offering. And it's been that offering, CaaS Small Center, that's specifically designed for contact centers with 10-50 agents. What makes CaaS Small Center unique is its product maturity; the simplification that it brings, reduced risk and scalability as well. And so that's an exciting new part of our business.

Jim: I think it's interesting that when you first got into the business with the service that you've been providing for the last three years, you thought that would be going after the low end of the market and everyone, certainly I was surprised when you really did very, very well at the high end of the market. So it seems like coming in with a more focused product at the lower end just makes a heck of a lot of sense.

So one of the questions then is where is this business coming from? Are these new accounts or are you having premise-based customers starting to move to the cloud or a combination; where is the business coming from?

Jason: Mostly from new accounts, customers looking to replace legacy multi-point solutions. However we are starting to see our premises customers make a shift to the cloud as well. A great example is Kohl's, whose been a customer of ours since 1999 and while Kohl's has seen benefits from our premises solution they decided that a move to the cloud would enable them to continue to focus on their core business and effectively meet peak seasonal demands. And given our premises and cloud solutions are based on the same core platform, our premises customers are able to transition to the cloud with a relatively minimal impact on the business and IT, and we also really try to work proactively with our customers to understand the business case, TCO and the ROI, so that everybody goes in with their eyes wide open to what the real impact will be. And also help to collaboratively develop a migration strategy that makes sense for our customers given their goals, priorities and timeline requirements.

Jim: That's great. Well getting back to what's new in the world of cloud at Interactive; is there any new specific functionality you'd like to highlight?

Jason: You bet. One of the things we're really excited about is the ability to offer business process automation in the cloud. How well an organization implements key business processes plays a huge role in their success, including their ability to deliver an exceptional customer experience. Informal and inefficient manual processes and disconnected systems can have a negative impact on cost, scalability and most importantly customer perceptions and experiences. So our cloud-based business process automation solution enables organizations to streamline even the most complex business processes with communications technologies that capture, prioritize, route, escalate, track and manage processes throughout the entire life cycle.

Another thing worth noting, something we're excited about, is the ability to offer a rich, interactive iPad app that gives contact centers supervisors, managers and executives insight and alerts to identify performance issues and initiate changes anytime, anywhere with the use of the iPad as a mobile device.

The last thing that I wanted to highlight is the ability to offer strategic resource planning capabilities in the cloud. Using patented and discreet event simulation technology, customers can build custom models, create accurate staffing plans, by work group or channel, on multiple "what if" scenarios to account for any change that they could anticipate the operations or business strategy to see what the impact would be.

Jim: You know, it seems like three years ago I had a podcast with Joe Staples talking about the introduction of all of this automation capabilities, business process automation. And now you've obviously come a long way, so business process automation and strategic resource planning were capable for awhile on your premise system. It seems like you closed the gap between premise and cloud, can you talk about that?

Jason: Absolutely. First, we've been making a real deliberate effort to make new functionality available to both our premises and our cloud customer simultaneously. This is already occurring and we'll see more evidence of this as major new functionality is announced moving forward.

Secondly, at the beginning of this year we moved to a tiered a la carte pricing model for our cloud solution, which is called Interactive Intelligence CaaS, which effectively removed barriers and road blocks that have previously prevented us from offering certain advanced capabilities to cloud customers, including the flexibility to highly customize applications, which is important to some larger complex contact center customers. We now offer three CaaS editions - Standard, Preferred and Premium - and each edition offers the same base functionality, ACD, IVR and unified communications, but what differs is the number of agents that are able to be supported, which options are available, and what level of support is provided. And it's also worth knowing that customers can up their level of support to the desired level and what they need for their business. And it's really a win/win as customers pay only for what they need and we cover the costs associated with being able to provide access to more advanced customized functionality. And if folks want to learn more they can go to our website and they'll be able to see a high level and detailed breakdown of the different editions that we offer with CaaS. So you're absolutely correct, the gap's closed and in terms of what can be done on premises and what can be done in the cloud and it's really been a deliberate effort on our part.

Jim: That's great. I want to switch topics a little bit because I know that international expansion has been a priority for Interactive Intelligence for several years now and I know that you have done a pretty good job of spreading out your resources worldwide to be able to support things. But how about data centers, have you added any new data centers around the world?

Jason: Yes we have Jim, and we now have nine data centers operational across the world, specifically in North America, UK, Germany, Australia, Japan and Brazil. We added the data center in Brazil a little while back and most recently added a second data center in Australia. We're also planning to turn up two new data centers in Canada in the very near future.

Jim: That's impressive - you've come a long way in a very short period of time. Well I've got a final question. Looking forward, what can we expect to see from Interactive in the cloud; you're already doing a lot, what else can we look for?

Jason: We'll continue to add new functionality, continue to expand our presence internationally, continue to expand the kinds of things customers can do in the contact center with an increased focus on our partner ecosystem and online market place. And overall continue to look for new ways to innovate and disrupt the market to help our customers improve their customers' experiences.

Jim: Great. Well Jason, it's been a pleasure as always talking to you and I look forward to another podcast in the near future. It seems like we're on a roll with these things. We're doing them it seems like about every quarter.

Jason: It's been a pleasure Jim. I always love talking with you and doing these and I look forward to the next.