Interactive Intelligence Cloud Observations

At Enterprise Connect this week I attended an update from Interactive Intelligence about their revised partnering model. While that part of the session was interesting and Interactive Intelligence about is building a high value eco-system of partners they build on top of, partners they interoperate with using standards, and partners who build and deliver value on top of their APIs, I actually found their comments on cloud most interesting.

I made some observations derived from comments that Joe Staples, CMO made about cloud based on their experience in delivery. First he showed a chart that detailed the growth of the percentage of revenue that comes from the cloud. In this model, Interactive Intelligence captures the 3 year revenue projection of a cloud sale into the sale year as a way to compare that revenue to the in-period capital purchase revenue, a methodology that seems reasonable for this analysis. Joe showed that Interactive Intelligence reached about a 50% mix of premise to cloud in 2013, after 3 years of 15% per year increases. However, the projection for 2014 is 58%, a reduction in growth from 14% per year to 8%. Assuming this shows a maturing of cloud deployments and asymptotic curve, it may be that the cloud settles as about 63-67% of the total volume for Interactive Intelligence or about double the premise deployment leve. It will be interesting to follow this as it suggests that, at least for Interactive Intelligence about, cloud Contact Center is actually a maturing offer in terms of customer acceptance and purchase.

The second factor was a comment that customers using the premise deployment model still want a more customized decision and an ala Carte menu of options, cloud purchasers are much more comfortable with having a limited set of bundles that define a specific set of functional break points. This is a direct reflection of the concepts the Timothy Chou suggested in the "Six Levels of Cloud Computing" and that Cloud is a Business Model, not a technology. In fact, he suggests that the key to cloud is standardization, specialization and dramatic cost/price reduction. It appears that Interactive Intelligence about is in fact seeing a real cloud model where they are simplifying through bundles and the customers are accepting this as a way to standardize the offers and change the model. We would all do well to pay attention to this trend across all of the elements of communication and collaboration solutions.