Interactive Intelligence – Making Cloud Communications Work

Updated: October 21, 2010

Interactive Intelligence has established a strong position in the contact center space, but they have always had a broader vision of how communications can add value for the entire operation, not just the contact center. I recently attended their 2010 Partner Conference, and based on Interactive's current roadmap, they've expanded the value proposition around hosted services. Their vision here is cloud-based, and it takes the form of CaaS - Communications as a Service.

This term is popping up increasingly in cloud circles, and refers to the idea that communications can simply be purchased as a service, much like an on-demand utility service. As the Web matures, this concept is no longer far-fetched, and hosted services can now meet the communications needs of most businesses as well as conventional or legacy options.

Their CaaS offering has been available since last year, and at the conference, we learned about how strong the demand has been. This actually poses an interesting dilemma, as they have been pleasantly surprised by the current level of adoption. It would appear they have bet right on the cloud, and this puts them ahead of their competitors for now. In the contact center market, Interactive is a strong player, but not the biggest provider.

Perhaps of greater interest of Focus readers, they are even less of a player in the enterprise communications space. Their CaaS offering can certainly address the latter - such as IP telephony - and they do in fact, have some deployments in market today. However, they cannot compete with the likes of Cisco and Avaya - and have no intention of doing so.

What they can do, however, is establish themselves as market leaders with CaaS in the contact center space. Most deployments there are premise-based, and contact center vendors are not very far along with the cloud. Enterprise/telecom vendors do have fairly strong cloud offerings, but are not really playing in the contact center space. As such, having established early momentum, Interactive is in a good position to become a market leader for cloud-based contact center solutions.

While this is still an early adopter market, my view is that Interactive is addressing a need that is especially relevant for SMBs. Contact centers are both capital and labor-intensive operations, and CaaS simply lowers the cost of doing business. IP telephony is one part of CaaS for the contact center, but their UC capabilities make it more powerful, not just for the agents, but managers and administrators.

The interesting angle here is that UC and CaaS is being used for a vertical application as opposed to being a business or enterprise-wide solution. As such, decisions around using cloud or hosted communications services do not need to be all-encompassing. Interactive is showing the way for a targeted application of the technology.

The analogy here is similar to the decision around buying or leasing a car. Some like to own the asset, and some simply want to keep their costs down. With SMBs, the latter would drive their decision for CaaS. Having the capability is more important than owning it, and for Interactive, this gives them more options to grow globally.

Once the software platform for cloud has been developed, the other core capability for success is having hosting space in a data center. Interactive currently has good hosting coverage for the U.S. and Canada, and to address the global growth they are now seeing for CaaS, data center presence is being established in Europe, Brazil, Japan and Australia. This is actually a necessary condition, as many companies will only feel comfortable having their data physically situated in-region, and for some countries - such as Germany - this is actually required by law.

Once a business has a comfort level with cloud services, the benefits quickly become apparent. Aside from the low upfront cost, they can quickly establish state-of-the-art contact center capabilities - not just locally, but globally if needed. This is particularly important for contact centers, which rely heavily on remote workers, especially where specialized expertise is needed to support customers.

Related to this is the bigger picture of core competency. Interactive is finding that more and more businesses simply want to get away from managing their telephony and IT networks. The technologies are constantly evolving, and the ROI on IT is getting harder to justify.

Finally, there is the element of future-proofing. Innovation is a constant with IP communications, and with CaaS, businesses will always have the latest versions as well as access to new features. Not only that, but CaaS provides great flexibility for developing customized applications. Having seen their roadmap, I know that Interactive is focusing on this element now in a big way.

Looking ahead, Interactive also understands that businesses may change their mind, and at some point will prefer to own their solution. This is an important consideration as some businesses will find that the ongoing cost of outsourcing reaches diminishing returns. To address that, Interactive offers a lease-to-own type of option, where businesses can shift from pure hosted to a managed model, where they own the underlying solution, and Interactive just provides the network management.

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