Interactive Intelligence Raises the Stakes in the Cloud Market

Jun 15, 2015

Interactions 2015

I had the pleasure of attending Interactions 2015, Interactive Intelligence’s annual partner, consultant and analyst event. As always, it was a lavish affair with about 2,000 attendees, tons of food and fun activities. I didn't care much for the visit to the race track, but was sorry to miss the SIP Tones, who played too late on Tuesday night, and the Cuban party on Wednesday night, when I flew back home. I greatly enjoyed the two guest speakers: Robert Herjavec, millionaire and star of TV reality shows Dragons’ Den and Shark Tank, and Matthew Dixon, researcher and book author. They shared some great insights on key factors for improving customer loyalty and business success in general, but I won’t talk about those in this blog article.

More important, I had the opportunity to hear Interactive Intelligence founder and CEO Dr. Don Brown share his vision for the company and the overall communications and contact center markets. In addition to a very interesting personality, Don has an impressive track record as an innovator and entrepreneur. Don’s relentless pursuit of technology innovation has played a key role in the company’s success. Founded in 1994, Interactive Intelligence has stayed on a high-growth path over the years to become a major global contact center vendor today.

Interactive Intelligence’s Cloud Journey

Interactive Intelligence is currently at major cross-roads as it tries to reposition for further success in the evolving business communications market. The premises-based communications and contact center markets are stagnant as businesses increasingly evaluate cloud services options. In anticipation of this shift, Interactive Intelligence launched a multi-instance CAAS offering a few years back, which has helped the company maintain healthy growth rates in spite of challenges in its original target market—the premises-based contact center space.

Nothing comes easy in telecom today. Cloud may be the way of the future, but it is no effortless nirvana for the participating vendors.  In spite of high double-digit CAAS growth rates over the years (e.g., CAAS grew 61% in Q1 2015), CAAS margins have been much lower than expected. Interactive Intelligence speakers pointed out that infrastructure cost more and customers were needier than they anticipated (i.e., demanded more professional services). 

  • In a discussion with a customer who just replaced another vendor with Interactive Intelligence infrastructure, I found out that they went with a premises-based solution because they couldn't sell the higher cost of CAAS to their execs. This sounds a bit counter-intuitive, doesn’t it? 

  • In a separate conversation, a partner confirmed that a cloud solution can be more difficult and expensive to put together. The customer/ partner needs to purchase and integrate all the pieces of the puzzle including the apps, telecom service, WAN, equipment and so on. In a premises-based deployment, on the other hand, the partner frequently brings a packaged deal to the customer, which alleviates some costs and concerns. 

  • Interactive Intelligence also provided two curious examples of customer reasons to choose premises-based implementations. Company speakers mentioned that Facebook deployed its premises-based CIC solution because they wanted to customize it. The speakers also quoted another customer, who stated, "We have more money than God; we are not renting anything". (Not so bad to have such customers, after all.)

These cases highlight legitimate concerns still quite common among customers choosing to deploy their communications and contact center infrastructure on the premises. Customization and integration requirements, security, available cash and other factors continue to sway many investment decisions in favor of premises-based solutions.

Continued customer preference for premises-based deployments actually bodes well for a vendor such as Interactive Intelligence. Unlike pure cloud providers, Interactive Intelligence is well positioned to offer choices which help not only secure deals in the near term but also ensure longevity of the relationship as customers enjoy the flexibility to move between premises-based and cloud deployment options.

Interactive Intelligence is working to improve CAAS performance with the use of OpenStack and SDN technologies, which lower costs and make the solution operate as cost-effectively as a multi-tenant architecture. The company is creating templates that will allow it to turn up customers much faster. It expects 1 million percent increase in speed and zero human error. Another step toward boosting CAAS market success is the shift from direct sales to greater partner enablement. An over-the-top offering pending launch in January 2016 is expected to also extend market reach and facilitate adoption. Additionally, Interactive Intelligence is reducing contractual commitments from 5 years to just 1 year and has greatly simplified contracts down to a 3-page, customer-friendly version.

But Don Brown’s favorite baby today is PureCloud, Interactive Intelligence’s comprehensive cloud-based suite of communications, collaboration and contact center applications. 

  • PureCloud is shaping up as a fairly complete cloud offering with pretty much all bells and whistles one can expect or ask for. The free PureCloud Collaborate offering includes persistent chat, presence, 5-person audio/video conference and content management. PureCloud Collaborate Pro (prices starting at $9.99/user/month) offers greater customer support and will provide advanced multi-party conferencing and file sharing in the future. Interactive Intelligence also enables optional integration with Active Directory, Exchange, SharePoint, Workday, Salesforce, etc. 

  • PureCloud Communicate (prices starting at $19.99/user/month) is a full-fledged PBX (though still missing some key features such as twinning and hunt groups) that also includes the entire Collaborate Pro feature suite. 

  • Finally, PureCloud Engage (priced at $100/agent/month) is a contact center offering that also includes the Collaborate and Communicate capabilities. 

In all, for about $100/user/month a business user can enjoy a fairly complete suite of collaboration, communication and customer care applications. All in the cloud, all integrated, with month-to-month pricing, modern GUI, continual updates and upgrades, SDKs and open APIs for customization and custom integration with third-party solutions.

So how does the PureCloud applications suite fit into the present-day communications and contact center solutions paradigm?

PureCloud’s advantages compared to a premises-based solution are obvious. It enables flexible capacity adjustments and more rapid adoption of new features and capabilities. Predictable monthly bills help better budget company expenses. Fully outsourced solution management allows the customer to focus on core business tasks and thus improve business agility and responsiveness. 

Compared to CAAS, PureCloud is more modular. Businesses can only deploy the Collaborate or Communicate options, if they see no need for a full-fledged contact center deployment. Month-to-month billing also gives customers greater flexibility than CAAS contracts. PureCloud also scales more cost-effectively than CAAS.

Compared to other cloud communications and contact center offerings, PureCloud offers a more extensive feature set. Few cloud PBX providers can offer an advanced contact center solution fully integrated with the telephony and UCC applications. Furthermore, PureCloud includes content management functionality, rarely included in other cloud communications solutions.

An added benefit of the Interactive Intelligence PureCloud solution is the Edge device that enables local call routing/switching and survivability. This not only saves the customer money in spare bandwidth, but it also improves call quality and business continuity. It comes with SDKs and open APIs that allow customization and integrations. Eventually the edge component will be virtualized in Amazon and will provide greater scalability and elastic capacity.

Overall, PureCloud would be a perfect solution for most greenfield implementations—e.g., new businesses and new sites. For a business starting fresh, a comprehensive cloud-based solution is a good way to go, unless there are really high security or customization requirements mandating that communications and contact center solutions be deployed on the premises.

Businesses with unamortized and still functional premises-based telephony and/or contact center deployments may see value in using PureCloud Collaborate to improve collaboration within or among various teams. In such scenarios, PureCloud may help accomplish certain benefits, such as: 

  • accelerate decision making

  • improve group project outcomes

  • reduce email clutter

  • provide a more cost-effective alternative to other persistent chat and content management tools (either previously deployed or under consideration) 

PureCloud Communicate, on the other hand, is a viable option for businesses looking to deploy a new cloud telephony and UCC solution. While it is still lacking some important PBX features, with the entire Collaborate suite being part of the offering, PureCloud Communicate provides good value at a compelling price point. 

Eventually, Interactive Intelligence will need to provide a complete telecom offering. Currently, customers need to provide their own telecom services (DIDs and dial tone). This may be perceived as unnecessary hassle by some customer organizations looking for a “single throat to choke”. 

Partners are still cautious about PureCloud, but appreciate the fact that they will have the freedom to package the offerings any way they want (white label). 

Final Thoughts 

Competition in the cloud communications and contact center market is intensifying as various providers compete based on price, functionality, security, reliability and more. Interactive Intelligence’s PureCloud launch is good news for businesses looking for different options. Customers evaluating multiple cloud offerings will need to perform their due diligence to ensure that they deploy a solution that best addresses their needs. The Interactive Intelligence PureCloud applications suite represents a compelling new offering that provides particularly great value to organizations looking for an integrated collaboration, communications and contact center solution.

 


Elka Popova

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