Interactive Intelligence chief praises ATIO support - April 2007

International business communications software developer, Interactive Intelligence has been providing contact centre and telephony products and services to the local market for almost ten years. With SA government prioritising business process outsourcing, nd looking to position the country as a contact centre hub, Interactive Intelligence's offerings are contributing to the local market.

Recent research by Frost & Sullivan into the SA IT infrastructure outsourcing market revealed that this sector is expanding at a robust rate, due to sustained economic growth. Frost & Sullivan ICT industry analyst Lindsey McDonald, spoke to Interactive Intelligence's regional sales manager for UK and Africa, David Paulding, to discuss how the company sees its position in Africa, its strategies, plans for expansion and the unique challenges the continent poses.

Lindsey McDonald (LM): Interactive Intelligence has enjoyed a presence in the local market for almost 10 years. What prompted the initial decision to come to SA?

David Paulding (DP): Interactive Intelligence started its EMEA operations in 1998 and that year we entered the SA market. We saw SA as one of the most sophisticated and promising emerging markets in EMEA, which offered a combination of highly developed first world economic infrastructure with a vibrant emerging market economy.

LM: What were the company's main challenges when entering the market and how did it develop a strategy to counter these?

DP: As a new entrant to the market we were unknown as a vendor in SA. We had no existing installations to act as a reference, and our approach and positioning went against everything that the established vendors stood for. We truly believed that there was a revolution coming in business communications.

The early years were tough. Imagine trying to sell a Windows NT-based "unified" communications system against Lucent, Nortel and other legacy telecom giants. Back in '95, '96 and '97, people said it would never work and would never sell. We were fortunate to sign a reseller agreement with Dimension Data. It actively marketed and promoted our Customer Interaction Centre (CIC) solution, and, because of its credibility and trusted position with customers, it was able to convince organisations like Nashua Mobile and BMW to sign up. More than a decade later, the world looks a lot different! We have sold thousands of systems. Analysts have declared the PBX dead. And the telecom giants like Siemens and Nortel do not look quite so tall. In fact, the same competitors that derided out 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.

LM: Have the challenges changed significantly since the company's establishment of operations? If so, how has this impacted upon strategy?

DM: The world of business communications has evolved and so have the market conditions in SA. Customers are much more open to the idea of an all-software solution based on open standards and running on commodity hardware. We have started to see the liberalisation of the telecommunications market in SA and this i highly important. Change is on the way with the advent of the second network operator (SNO), and hopefully this will bring competition to the market and with its cheaper prices and better service for customers. However, there is some way to go yet. Local organisations cannot fully exploit our technology until they can obtain plentiful and cost-effective bandwidth for both national and international traffic.

LM: Further expansion into Africa has been facilitated through the identification of suitable channel partners. ATIO has proved to be a world leader in this regard. How has it achieved this?

DP: I am asked this question on a regular basis. The key reason is that ATIO has a strong focus on our products and the development of business in Africa. It has invested heavily in training nd developing internal skills with our software-based technology. In fact, it is the highest number of Interactive Intelligence certified engineers in EMEA. It has also just been awarded our highest level of partner status, Platinum Elite. This is only awarded to those organisations that have excelled within the entire scope of our partnership, and there is only one other partner in EMEA and three more globally at this level. ATIO has also worked to maintain very high levels of customer satisfaction and many of its customers have, in turn, become advocates, hosting reference sites, providing leads and recommending ATIO and Interactive Intelligence to other organisations.

LM: What are some of the particular features of the African market?

DP: Logistically, Africa presents several challenges. Getting product into some countries presents problems due to limited transportation links. Supporting customers in Africa also presents some challenges. If an engineer needs to be dispatched to site, it is not always easy to jump on a plane and get there. Poor infrastructure can also present some challenges. Consistent and regular electrical supply cannot always be guaranteed in certain locations, and access to telecommunications links can be challenging. We often need to come up with solutions to problems that we would not experience in other parts of the world. We have to be mindful of the political climate in certain countries too, and we look for guidance from our local partners on these issues. Unfortunately, getting payment for solutions is also an issue sometimes.

LM: Which vertical sectors have shown the highest demand for your products?

DP: We have seen continued high demand from several industry sectors. These include financial services and business process outsourcing. We have been able to take advantage of the boom in outsourcing that has taken place in areas such as Cape Town, with many od our customers handling work from overseas clients. Demand from both of these sectors tends to follow our experience in the rest of the world. In North America and Europe we also see the strongest demand from the financial service and business process outsourcing sectors. In addition, we have seen high demand from telecommunications and cellular operators. In Africa, our relationship with a number of GSM network operators has seen our products installed in over 15 new countries in the past two years. These include Sierra Leone, Tanzania, Malawi, DRC and Burkina Faso.

LM: How have you maintained a competitive advantage in a market in which the company does not have as much insight as others?

DP: On a global basis, we continue to invest significant amounts into ongoing R&D to develop new features that allow Interactive Intelligence to maintain a competitive advantage. We actively encourage our customers to help us decide which features are important to their business and will provide real operational and business benefits. What has changed and has propelled our growth in the last couple of years is out move to VoIP, specifically using the SIP standard. We were able to move away from proprietary hardware and do everything in software. We have a decade's worth of applications that we have developed, including voice mail, faxing, unified communications as well as the more specialised customer service functionality. This trend has cut a good 40% to 50% off the cost of our overall solution, which is a great competitive advantage. We maintain a healthy insight into the African market through regular contact with customers, partners and local analysts. This regular contact allows us to prioritise our local efforts and to gain an insight into the areas where we should be focused. Customers tend to have the same needs the world over. They want to increase productivity while lowering costs. These needs are always at the forefront of our efforts to maintain a competitive advantage.

LM: Do you expect to see significant growth in the African market for your products? If so, would you be able to provide an estimate as to the level of growth?

DP: We expect to see significant growth in the African market. Currently we are seeing the most demand coming from companies in the telecommunications, utilities (water, power and gas) and banking industries. Hard and fast growth figures are difficult at best to predict and very few industry recognised statistics exist. However, we expect to see growth of between 30 and 35% by 2009.

LM: How does Interactive Intelligence intend to capitalise on opportunities presented by the African market?

DP: We intend to continue our strategy of fostering local partnerships with ICT and system integrators and invest in local resources where it makes sense.