Interactive Intelligence 2010 Partner Conference - My Take

14 Oct 2010

This is my busiest time of year for conferences, and this one is right in the middle of a series on my plate right now. Interactive Intelligence may not be a household name like Cisco or Microsoft, but you'd never know it from attending this week's conference. I've followed them from a safe distance for a while, but after going to my first event of theirs last year, they've been much higher on my radar - and for good reason.

The setting was sunny and hot San Antonio, and with over 400 attendees, there was a lot of strong buzz around Interactive's continuing growth story. Most of the crowd was partners, and they had a pretty strong technical bent, which was reflected in the nature of the breakout sessions. The rest of us were telecom consultants (mostly) and a few analysts like me. A number of other UCStrategies colleagues were there too, and as usual, I'm pretty sure I was the only analyst from Canada. Lucky me.

With that preamble, I'll share my impressions, which are focused on business and strategy issues rather than technology. Interactive Intelligence is known mostly in contact center circles - which not my forte - but increasingly, they're turning up in UC and VoIP conversations - and that's where I tend to focus. Other contributors to this portal will have a more technical angle, and I urge you to follow their postings to get a fuller picture.

My first comment is that it's hard to argue with success. Being public, it's no secret that the company is financially stable - strong margins, $85 million in the bank, and tracking for $160 million in annual revenues. In fact, during the conference, we were told that current quarter earnings were well ahead of analyst expectations, and the stock had a healthy bump. By now, this would be public knowledge, so I'm not talking out of turn here.

For most attendees, the main story was the release of CIC 4.0, but I was more interested in IPA - Interaction Process Automation. This is one way for Interactive to move up the value chain as well as create some differentiation in a new area. Interactive will never be the top dog in contact centers or IP telephony, but process automation is new for this space, and they have as good a shot as anyone to be the market leader.

They're applying this primarily to contact centers, so it doesn't really compete with or displace the likes of IBM or SAP for enterprise-wide process automation solutions. The company is still feeling its way around this opportunity, but I believe they will have success here as their track record starts to build. The channels need to add this expertise to properly sell and support IPA, but even with their current skill set, customers are still seeing enough value here for this to be a driver for new deals.

This may not have much to do with UC, but something a bit closer to home is word spotting, which is part of their Interaction Analyzer platform. By searching on various forms of text across the many modes of customer interactions, contact centers can glean very useful intelligence about how problems are being resolved and how individual agents are managing them. During the closing roadmap session, they provided a nice demo of this.

While not quite UC, this does work across multiple modes, and I just think it's a nice value-added feature. Moving further along the UC spectrum, however, we come to CaaS, another big story at the conference. Their version of communications-as-a-service has been discussed on this portal before, and there certainly is a UC element involved, albeit primarily for contact center needs.

Interactive is very careful not to position themselves against telecom vendors, all of whom have UC offerings. They don't want to be in the IP phone business either, so you have to think of Interactive a bit differently in this space. CaaS provides UC, but not really as an enterprise solution - they know their strengths, and are doing a great job with it. The main selling point here is the cloud - more so than being UC - and they noted more than once about how strong the uptake has been for orders. They believe this strong interest validates the market's appetite for cloud-based communications, especially in the contact center, and now their biggest challenge is keeping pace with demand.

Despite the strong growth story on several fronts, Interactive Intelligence still has work to do getting on everyone's radar. UCStrategies has the full story, but out there in the broader marketplace it's not quite the same. Joe Staples made a nice effort to dispel this by doing Google searches on stage with terms like VoIP solutions or IP telephony solutions. Across many categories, Interactive ranked #1 or close to it. However, when you ask Joe Customer, the resonance just isn't there. In that regard, perception is reality, and they made it clear that marketing dollars will be spent in 2011 to build up the brand. Good move.

Aside from the disconnect on brand recognition, this company is riding a nice streak. They're big enough to cause pain for the Tier 1 vendors, strong enough to maintain leadership in their core market, rich enough to make strategic acquisitions, yet small enough to stay under the radar of everyone else until it's too late. As long as Don Brown is running the show, and they maintain their laid-back business casual culture, Interactive should be just fine executing on their game plan.

In addition to what myself and others at UCStrategies have written about Interactive's conference, feel free to view photos posted to my blog over the course of this week.

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