Genesys Announces Interactive Intelligence Acquisition

31 Aug 2016

Genesys has made a major acquisition with the purchase of Interactive Intelligence Group Inc., a provider of solutions for customer engagement, communications, and collaboration. Given Genesys' own focus on omnichannel solutions for customer experience and contact centers, this will enhance its ability to provide broad customer experience solutions to organizations of all sizes and over any channel. The UCStrategies UC Experts provided their initial thoughts on the announcement.

J.R. Simmons, President and Principal Consultant for COMgroup, Inc., notes that Genesys buying Interactive Intelligence is more logical than many of the other speculative possible vendor combinations. In a UCStrategies article, he states, "Although the direction of the technologies involved are different and the initial statements are that both product lines will be supported, it would not be surprising if Genesys makes the Interactive Intelligence PureCloud product the focus of the future cloud offerings. It appears to scale more easily and should be more cost competitive in the mid-size CC market than the current Genesys approach."

Dave Stein of Stein Technology Consulting Group states: "The consolidation that the Communications Technology industry has experienced over the past 18 months or so continues with the significant combination of Genesys and Interactive Intelligence. I think companies such as Five9 and even NICE (recently an acquirer themselves of InContact) become interesting targets for organizations looking to include contact center for vertical integration or simply bulking up to achieve critical mass. Another area that has quite a bit of M&A activity is the CPaaS space. Some of the same organizations that might be interested in acquiring contact center brands may also be interested in CPaaS vendors."

Stein adds, "Interactive Intelligence's portfolio complements that of Genesys quite well, with a focus on cloud and on-premise customer engagement solutions. As Genesys is aiming to further enhance its customer experience solutions, the products and solutions from Interactive Intelligence will provide it with more capabilities for more market segments, while continuing to support Interactive Intelligence's existing portfolios."

According to Jon Arnold of J Arnold & Associates: "This could be a 1+1=3 scenario where the complementary elements of each company creates a stronger entity overall. Genesys has deeper reach with enterprises, whereas Interactive Intelligence is stronger in the mid-market, along with being further along the cloud curve. That said, there will be integration challenges, both for the technologies and platforms, as well as on the branding front. ININ has been staunchly independent for so long, and keeping their culture intact will be a key factor to watch. Even if they get half of these things right, this move should position Genesys as a solid Tier 1 player to compete head-on with Cisco and whatever form Avaya ends up taking."

"The contact center industry is in a state of flux and most vendors are fighting to thrive and survive," says Blair Pleasant of COMMfusion. "Consolidation has been in the forefront recently, and it's not too surprising that Genesys made a play for Interactive Intelligence, which has done a great job of bringing the AWS-based PureCloud to market. One of the big questions is - what will Genesys do with PureCloud Communicate and PureCloud Collaborate?"

Pleasant adds: "Moving forward with these business communication and collaboration capabilities will likely harm Genesys' relationship with Microsoft, which will now view Genesys as a competitor. Genesys had made great headway in its partnership with Microsoft, providing a strong contact center solution for Skype for Business, but Microsoft is unlikely to view Genesys' acquisition of Interactive Intelligence very positively. That being said, PureCloud Communicate and PureCloud Collaborate are very interesting solutions that have good potential in the market - especially as team collaboration becomes more mainstream, and these capabilities can help Genesys win in deals where cloud-based call control is required."

Roberta J. Fox, Chairman and CIO of FOX GROUP technology, adds: "As leading technology consultants who develop strategies and help clients acquire next generation contact center solutions, we find this acquisition interesting from two main perspectives.

"The first one is that Interactive Intelligence will benefit from access to a larger, well known contact center customer base and sales/support organization that is used to dealing with organizations of much larger size. Genesys will benefit from dealing with an innovative, nimble organization with great people and values that Interactive Intelligence brings to the table.

"More and more of our clients are ranking corporate culture as an important characteristic in their acquisitions. It will be interesting to see how the organizations combine their products and resources to hopefully leverage the best of both firms without impacting the staff, and more importantly customers."

And according to Dave Michels, Principal Analyst at TalkingPointz: "While I have no doubt of the value of PureCloud as a contact center solution is clear to Genesys, I hope that they realize that it also has tremendous potential as a workstream messaging service. Interactive initially launched PureCloud with a vision that starts with workstream messaging for the whole company, providing UCaaS to knowledge workers, and powerful contact center features for an organization's various engagement groups. Interactive Intelligence was focused on the contact center (PureCloud Engage) and largely ignored development of PureCloud Collaborate. Meanwhile the workstream messaging sector is heating up, and Interactive Intelligence's original vision looks valid. I hope Genesys prioritizes Collaborate."

According to Joseph Williams of Cloud Economist, "The acquisition provides a solid liquidity event for the executives and investors in Interactive Intelligence. The acquisition provides Genesys a way to expand their enterprise portfolio from ININ, but their respective products and services are not so adjacent that there won't be a lot of pain making this combination work."

The acquisition will cost Genesys approximately $1.4 billion, and Interactive Intelligence shareholders will receive $60.50 per share in cash. The transaction is expected to close at the end of the year, and has been approved by both Genesys' Operating Committee and Interactive Intelligence's Board of Directors.

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