This article originally appeared in the Jan. 2012 issue of Cloud Computing.
In technology, foresight is everything.
Several years ago, Don Brown, the founder and CEO of Interactive Intelligence (News - Alert), saw a major market shift when he realized that companies were moving many parts of their technology to the cloud, with the potential for communications to be a core part of that shift.
Although Interactive Intelligence had been selling hosted contact center services since 2005, Brown had the vision for this cloud shift in the market, causing the company to re-architect and re-launch its hosted services in early 2009.
To provide some perspective on just how dramatically the market has shifted, consider these numbers: In 2009, the cloud made up 5 percent of Interactive’s total orders; a year later, the cloud comprised 10 percent, and at press time, cloud services made up 24 percent, nearly a quarter of its business, in the first nine months of 2011.
Initially, Staples says the global economic tumble in 2008 caused companies to tighten their belts and focus much more on expense control.
“The economic situation in 2008 and 2009 caused people to look more to the cloud for financial reasons,” Staples says. “The financial reasons are still part of the equation, but other factors like flexibility, time to deploy, and efficiency are now playing a bigger role.”
To further illustrate the movement toward cloud communications, Staples cites recent analyst statistics. “Over the next five years most analysts predict the world-wide compound annual growth rate (CAGR) of premise-based contact center agent positions to remain relatively flat at below about 2 percent,” he says. “For hosted contact centers, however, analysts are painting a much more positive picture with projections of a CAGR from 2009 to 2016 of up to 19 percent for hosted agent positions.”
Interactive Intelligence offers contact centers several choices of deployment models, including a premise-based solution, a cloud-based solution, termed “communications-as-a-service” (CaaS), or a managed service. Customers can migrate their CaaS solution to their own site at any time, seamlessly, without incurring downtime or losing applications.
Today, Interactive has more than 4,000 customers in 90 countries, according to Staples.
But the company didn’t achieve such success overnight. The Indianapolis-based company, now with more than 1,000 employees and anticipated sales in 2011 of more than $200 million, shipped the first version of its contact center software in 1997 and its cloud rebranding was a multi-million dollar effort.
“We had had a hosted offering on the market for several years, but this was Don Brown being visionary and saying ‘I think the market is going to make a hard shift to the cloud and we need to be in a position to take advantage of that shift,’” explains Staples.
The company then began its three-year foray into opening up global data centers – about to open its seventh – and rearchitecting its cloud-based business model.
“In 2009, we did a re-launch; we rearchitected our offering, adjusted pricing, and put a considerable amount of marketing and brand-building effort behind our cloud offering,” says Staples.
He credits Brown with recognizing a heightened level of interest in cloud not only from Interactive’s own customers, but also in witnessing the success of other cloud computing companies, not to mention the media traction cloud was getting.
“There was a lot of noise around the cloud and a significant groundswell that we were able to get out in front of. Credit Don’s vision for getting us into a strong cloud position several years ago – really before many others were considering cloud-based communications as a mainstream offering,” Staples says.
A major advantage for Interactive Intelligence is the fact that its contact center and unified communications software has been deployed by thousands of companies, adds Staples.
“This software base is the same offering we deliver via CaaS,” he says. “So instead of the risk buyers have with smaller, less proven vendors, with Interactive they are dealing with a proven industry leader.
“For a customer, that simply provides a reduced amount of risk in the fact that they are buying something that is proven and tested,” continues Staples.
“As evidence of the value customers are finding in moving communications to the cloud, our CaaS offering is the fastest growing segment of our business – up one-hundred-and-thirty-four percent through the first nine months of 2011,” Staples says. But it’s not just numbers that prove Interactive Intelligence is a leader in the contact center space.
“If you look beyond how many installations we have, analysts like Gartner (News - Alert) and Frost & Sullivan have categorized us in a very small group of leaders,” Staples says. “We’ve been doing this for seventeen years. That experience provides some nice benefits to our customers.”
Scalability and Flexibility in the Mid- to High-End Market
If you segment the market, Interactive Intelligence clearly has its sights set on the mid to high end of the contact center and unified communications markets. Its software scales extremely well and offers the more advanced applications that those larger companies require, according to Staples.
“We don’t believe there is a ‘one size fits all’ in the cloud space, so a product that you would design and focus on for five agents is going to be significantly different than a product you design for thousands or tens of thousands of agents,” explains Staples.”
There is no doubt that Interactive’s objective is to be the leading provider of mid- and high-end cloud-based contact center and unified communications solutions.
“Where we’ve succeeded the most is with the mid- to large-size contact centers. The scalability we deliver, the breadth of applications, our strong investment in R&D and continued innovation has made us really appealing to some of the largest companies in the world,” says Staples.
As part of its cloud expansion, Interactive is preparing to open its seventh data center. The company currently operates two in the U.S., with the others in the U.K., Germany, Australia, and Japan – all of them monitored 24/7 from a central network operations center (NOC). Interactive’s latest data center in Brazil is planned to be in place in the first half of 2012.
From a cultural standpoint, customers are often looking for the service to be provided from a data center within their country or their region, Staples points out.
“That kind of coverage is important to global companies. A lot of the objections go away if you are in the country with a local presence. We think it better serves our customers that way and shows we are committed to investing in our cloud-based services,” says Staples.
Interactive has seen hosted success with global cloud deployments of its CaaS Contact Center at Philips (News - Alert) Healthcare, Eli Lilly and Company, Public Storage, Nissan, Brightpoint, and others among the Fortune 1000.
“The large number of data centers that Interactive has rolled out is an important part of the company’s strategy,” says Staples. “With operations closer to the customer, we are in a better position to service their unique needs and privacy requirements for specific regions of the world.”
Another unique characteristic of the Interactive Intelligence offering is the ability to move from the cloud to premise, or the opposite direction.
“Business needs change over time,” Staples says. “What might have been a good decision today, might not make sense tomorrow. We makes it easy for companies to make this transition if the need arises. This gives our customers an increased level of flexibility. We don’t have a competitor that can easily make that transition for a customer.
“These are big purchase decision for customers. This safety net that says you can at any time easily move from cloud to premise, or premise to cloud gives customers a whole lot of comfort,,” he says.
Staples also raises another important point: Moving to the cloud doesn’t mean you should lose functionality.
“If you’re giving up functionality simply to get to the cloud, you’re selecting the wrong vendor,” he says. “Availability of a broad portfolio of feature-rich communications applications should be at the top of a customer’s checklist as they select a cloud-based communications provider.”
Mitigating Security Concerns
When a company of any size considers moving its communications to the cloud, security issues are often top of mind. But what was once a debilitating factor for IT decision makers is no longer as weighty a concern, according to Staples.
“The security question still gets asked in every cloud deal we’re in,” he says. “However, it’s a lot less worrisome for customers than it was say three years ago. Security was at the top of the list before, but now it’s less of an issue as we’ve taken steps to mitigate risk.”
“These are very secure environments,” Staples says. “When customers see the security of our data center locations and compare them with the security of their own server rooms, they quickly begin to feel comfortable about the physical security issue,” “Additionally, we have a hosted deployment option where all the voice traffic and call recordings remain on the customer’s network, inside their firewall, never needing to traverse the network up to the data center. Only SIP messages are passing between the customer's site and the data center. These are examples of the measures we’ve taken to address customer security requirements..”
Further reducing security concerns and improving flexibility – and one of the benefits Interactive’s cloud customers cite most – is the fact that every CaaS Contact Center customer runs an isolated software instance on their own virtual machine in the cloud.
“So by not running the same instance of software mixed in a multitenant environment, our customers have a higher ability to customize their solution, plus there is an innately increased level of security,” Staples says.
Consider, for example, Naviss LLC, which uses Interactive’s CaaS Contact Center for approximately 120 total users. Of those, about 100 are contact center agents and about 20 are business users. Naviss offers vehicle protection plans that protect consumers from costly repairs above and beyond their standard manufacturer’s auto warranty, so you can imagine how vital a reliable cloud communications system is to the company’s success.
Although Naviss had previously deployed a cloud communications solution from another vendor, the company was dissatisfied with the service overall and its consensus of the phone system was that it was “less than satisfactory,” according to Art Pender, chief operations officer at Naviss.
Naviss, which is located in St. Louis, Mo., currently uses several Interactive Intelligence CaaS Contact Center applications. including supervisory monitoring and its desktop softphone with call control. The company is also in the midst of deploying the Interactive Intelligence cloud-based dialer application for outbound and blended contact centers.
“Selecting Interactive’s CaaS Contact Center was a no-brainer for us,” says Pender. “The information was kept in another place, so if something tragic happened, we were still protected. We had no reservations whatsoever. And the level of support is second to none. I’ve been in the service industry for 25 years and I’ve never seen anything close to what we’re getting with Interactive’s cloud-based solution.”
The Benefits of Cloud Communications
Despite such success stories, there are still those IT leaders and other C-suite executives who are cautious to make the move from premise-based to cloud communications. But Staples advises executives to consider and balance out the benefits versus the risks.
“C-suite executives are wise to consider all the costs associated as they make a decision to go with premise or cloud,” Staples say. “So many costs can either be reduced or eliminated with a move to the cloud, but it's important to look closely to ensure that all the costs are being considered, not simply the purchase price vs. the monthly charge.”
Interactive has also seen that successfully moving communications to the cloud is best realized if it’s part of a bigger strategic cloud decision. He notes that many of the companies transitioning to a cloud communications solution are also those who have already moved other applications to the cloud. Other important bits of wisdom Staples dispenses are as follows:
Look at what other applications can be moved to the cloud and how all of those applications will be integrated.
Examine the size of deployments the vendor typically does and see if it’s a match for your organization’s size. If you’re looking for the ability to customize the offering, be sure that can be done with the service you select and evaluate how good the vendor is at providing those customization services and dealing with sophisticated applications.
Long term, if you want to add predictive dialing, workforce management, screen recording, or unified communications capabilities, be sure your CaaS vendor can deliver those services without undue complexity.
Know exactly what security measures the prospective vendor has taken – both infrastructure and processes – to ensure your cloud deployment exposes you to minimum risk.
Ask the vendor if they provide the option to migrate from a cloud deployment to premise should you decide to change models down the road; and if they do, be sure you understand the implications, like application rewrites, etc.
Finally, consider the financial stability of the vendor. Be sure they will be there to support you for the long run.
Still not sure about this cloud communications business? Interactive Intelligence recently introduced a trial program called Quick Spin that enables organizations to sample for free the company's communications-as-a-service offering.
“By its very nature the cloud offers an easier way for customers to quickly trial the communication service,” Staples says. “We created Quick Spin to let our prospective customers kick the tires, with set up of a trial number of users, workgroups, and skills taking less than an hour. Then for a 14-day trial customers can get a live experience of the contact center routing and queuing, use of the agent desktop, view reports, see how straightforward the system is to administer, and even trial some of our more sophisticated applications such as real-time speech analytics. While Quick Spin is brand new, the interest level has been very strong.”
Based on current figures and trends at Interactive, Staples predicts the company could eventually see more than 50 percent of customers opting for a cloud-based contact center.
Looking ahead to the next 12 months, Staples says he believes that cloud communications will continue to replace older, premise-based systems since the benefits of shifting to the cloud are vast and quantifiable.
“We see cloud communications continuing to replace existing premise-based systems at a pretty fast clip,” Staples says. “Most industry analysts show the annual growth rates for cloud communications to be eight to ten times the pace of premise offerings. The benefits of moving to the cloud are just too compelling for CIOs, CFOs and other decision-makers to ignore. And those benefits of increased flexibility, faster deployment time, reduced IT staff requirements, and lower overall costs are what’s driving the market shift to the cloud.”
Edited by Stefania Viscusi