Standing Tall - 2 August 2007

Once a small company in the telco space, Interactive intelligence is beefing up

What use to be a small entity competing against established giants in the South African market in the mid-nineties has now beefed up and is emerging as a force to be reckoned with.

Interactive Intelligence, a UK based provider of contact centre and IP telephony products and services, initially had shaky start in the South African market.

"The early years were tough. Back in 95', 96' and 97', people said it would never work and it would never sell," admits Dave Paulding, regional sales manager for UK and Africa.

"Imagine trying to sell a Windows NT-based "unified" communications system against Lucent, Nortel and the other legacy telecom giants," he says.

The tables have turned

In 1998 Interactive Intelligence posted an annual revenue of $303 105 in the South African market. Paulding says a mere eight years later, the company has grown its annual revenue to $2,865,066, a growth rate of 845%.

"We've sold thousands of systems. Analysts have declared the PBX dead. And the telecom giants don't look quite so tall anymore," says Paulding.

"The same competitors that derided our system back then have been scrambling in an effort to piece together multi-vendor products and re-label them as "unified" in a desperate attempt to play catch up," he adds.

Legal aid

Paulding attributes most of the company's growth to legislative changes in the telecommunication sector.

"We have started to see the liberalisation of the telecommunications market in South Africa."

He is upbeat about the introduction of competition in the market. "Change is on the way with the advent of the SNO, and hopefully this will bring competition to the market and with it cheaper prices and better service for customers."

He says that, although this is an exciting time, there still much to be done - "there is some way to go yet. South African organisations cannot fully exploit VoIP technology until they can obtain plentiful and cost-effective bandwidth for both national and international traffic."

Paulding says the company's VoIP offering has been very successful in SA. "All new systems sold are VoIP based and many existing customers are migrating from the older legacy TDM solutions to newer IP Telephony offerings."

Growth through partnership

Interactive Intelligence's EMEA (Europe, Middle East and Africa) headquarters are located in the UK. The company has regional offices across Europe and the Middle East. In SA, the company only sells its products through a network of value-added reseller partners, which include ATIO and Dimension Data.

Paulding says the business in the rest of Africa is run is run along similar lines, with a number of channel partners actively pursuing sales. "We have been fortunate to work with a number of dedicated channel partners."

He adds: "In particular, ATIO Corporation has been very focused on growing sales of new systems and has gone from a standing start as a new reseller in 2002 to becoming the top reseller partner worldwide for Interactive Intelligence in 2005."

There's no place like home

Paulding says the company has had a positive experience doing business in SA. "Over the years, the world of Business Communications has evolved and so have the market conditions in South Africa. Customers are much more open to the idea of an all-software solution based on open standards and running on commodity hardware."

He adds that SA is a corridor to the rest of Africa. "South Africa also has a favourable legal and business environment and has the resident marketing skills and distribution channels imperative for commercial ventures into Africa."

Paulding maintains that despite the challenges in this country, it is one of the most sophisticated and promising emerging markets in EMEA, that offers a unique combination of highly developed First World economic infrastructure with a vibrant emerging market economy.