Varolii raises $8M to accelerate next-gen smartphone apps

I wrote about Varolii last summer after ACCE and noted its focus beyond traditional outbound applications. It captures a lot more data about an interaction, which helps in finding patterns and trends. This “decision engine” feeds information back to the system in order to attain the most desirable outcome for a customer.

This 250-person company based in Seattle has some major customers: Alaska Airlines, Southwest Airlines, SunTrust, Time Warner Cable, and Southern California Edison, just to name a few.

A few months ago it also found a new president and CEO, David McCann, formerly with Microsoft.

Now it has raised $8 million from existing investors to pour into development of mobile capabilities for its products. This is a noteworthy cash injection because these days with cloud communications API offerings from Tropo and Twilio, it has leveled the playing field for smaller companies or individual developers to make competing products. Varolii may need the cash to fend off such threats.

Full press release from Varolii:

SEATTLE—July 26, 2011— Varolii Corporation, the market and technology leader in interactive text, voice and email communications for customers and employees, announced today that it has closed Series D Round financing of $8 million from all its current investors: BlueRun VenturesDraper Fischer JurvetsonInstitutional Venture Partners and InterWest Partners. The company also announced that Seattle veteran software executives, Lee Roberts and William Bryant, are joining its Board of Directors. Both bring to the Board deep industry experience in financial services, software and mobile technology, as well as more than two decades each in technology executive and entrepreneur roles.

This financing will be used to accelerate the development of new capabilities and solutions that integrate customer and employee interactions across outbound, inbound and mobile channels. These capabilities will extend the reach of Varolii Interact applications to Android and iPhone mobile devices, enabling organizations to get higher rates of successful interactions with customers and employees to reduce costs and increase profitability.

“Varolii already enables more than 400 major U.S. brands to interact with over 75 million consumers and 8 million employees each year. With this round, we will be able to accelerate our innovation and further increase customer outcomes across financial services, healthcare, utilities, telecommunications, retail and airlines,” said David McCann, CEO at Varolii. “This funding allows us to deliver on the innovations that major organizations are looking for by moving to the smartphone and building capabilities to further take costs out of the 5,000 large enterprise contact centers where budgets are continuing to decline and organizations are leading their customers to self-service.”

“Varolii is an innovative market leader that offers a unique service to its Fortune 1000 customers,” said Doug Pepper, general partner at InterWest Ventures. “We are confident in the company’s new vision and strategy established by the management team to drive growth and capture market share.”

Varolii Appoints New Board of Directors Members
Varolii also appointed Lee Roberts, former CEO and Chairman of FileNet (acquired by IBM in 2006 for $1.6 billion), and William Bryant, a venture partner with DFJ, to its Board of Directors.

“Welcoming Lee and Bill to our Board represents a new chapter for Varolii,” said McCann. “Their extensive experience in the financial services, software and mobile arenas will be easily applied to their future work with Varolii as we look to help the company grow across regions and vertical markets. We are honored to have both of these outstanding executives on Varolii’s Board to help guide us during the next phase of growth.”

Lee Roberts is the president and CEO of BlueWater Management Consulting, a provider of information technology and executive consulting. Prior to his current role, Roberts served as vice president and general manager of IBM’s software group and was responsible for enterprise content and business process management software for a multi-billion dollar business unit. Roberts also brings to Varolii his experience as the former chairman and CEO of FileNet Corporation, whose software was used extensively in financial services. Prior to FileNet, Roberts was general manager of IBM’s network division and also held a variety of executive positions across the company. Roberts serves on the Boards of QAD Software, an enterprise resource planning company, Unisys, a multi-national provider of complex systems integration services and server technology, and Noetix Software, a Seattle-based start-up in the business intelligence analytics market.

“Varolii has an excellent opportunity for growth over the next several years, with its breadth of customers and with corporations accelerating their embrace of cloud services,” said Roberts. “I’m pleased to be part of the company and look forward to participating in Varolii’s future success.”

William Bryant has been involved in more than 25 leading software, Internet, digital media and mobile companies, as a founder, senior executive, investor and Board member. Prior to his role with DFJ, Bryant was the founding vice president of Sales and Marketing for Visio Corporation, which was acquired by Microsoft. He also served as president of Netbot, the creators of the first comparison online shopping agent, as well as the CEO and chairman of Qpass, which was acquired by Amdocs for $275 million. Bryant has extensive background in mobile technologies having worked with Qpass, Medio, Viafone, NearMe, HandsOn, Swype, Intrinsyc, Jabber, Mixxer and Z2Live. He also serves on the Boards of Opscode, a cloud infrastructure automation provider, Z2Live, a mobile game developer, and AdXpose, a provider of digital advertising analytics solutions.

Varolii has delivered more than 5 billion communications across voice, email, SMS text messaging and digital channels on behalf of companies in a variety of industries, with more than 2 million sent every day. Varolii works with 20 percent of Fortune 100 companies, including five of the 10 largest health plans, two of the three largest U.S. banks, five of the top 10 airlines and 30 of the largest U.S. utilities.

About Varolii Corporation

Varolii is the market and technology leader in intelligent, personalized interactive communications. Its cloud-based communication solutions help organizations easily and effectively reach and interact with large numbers of consumers and employees, reducing operational costs, improving business continuity and enhancing customer service. Varolii provides the industry’s only cross-channel communications technology, which blends voice, mobile and email channels to drive profitable action. At the heart of the platform is Varolii ID™, which automatically analyzes each recipient’s past responses to personalize future communications. With Varolii, organizations can execute true 1-to-1 communication on a large scale, achieving better results from fewer interactions. More than 400 companies trust Varolii to send over four million communications every business day. For more information, visit www.varolii.com.

# # #

Media Contact:

Jessica Kendall
Edelman PR for Varolii
206.268.2231
jessica.kendall@edelman.com

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Alcatel-Lucent Enterprise sale may close by weekend

The latest update on the sale of ALU Enterprise? Now there are reports that the sale may be finalized by the end of this week:

Alcatel-Lucent could finalise the sale of its enterprise business by the end of the week.

After months of closed-door negotiations with varied suitors including HP and Siemens Enterprise Communications, the company confirmed interest overnight in “exploring strategic options” for its non-telco business.

The business provided unified communications, workflow management and call centre software to large businesses internationally.

The big challenge is in negotiations with the French workers unions.

Stay tuned…

The ‘Google+ for customer service’ bandwagon is still missing some wheels

WARNING: Minor adult language contained in this post. If you are easily offended by vulgar slang then you may not have worked in the industry long enough… Look away now and hope for a better post in the next few days. My apologies.

It’s no surprise that I’m a Google fan. I log into Gmail daily, use Google Voice extensively, and actually dislike having to log into Facebook and Twitter separately to attain social media nirvana. Why didn’t Google buy Facebook and/or Twitter years back when these companies didn’t have astronomical valuations? Talk about having to deal with multichannel interactions…

Then Google throws in Google+ into the mix! Lovely, now it’s three social media outlets I have to spend time with. While most folks are still cautiously navigating the Streams, Circles, Huddles, and Hangouts, some brave adopters are already championing Google+ as the next frontier in customer service channels.

CEO Michael Dell (okay, should I link to Twitter or Google+?) pondered on July 17:

I am thinking about hangouts for business. Would you like to be able to connect with your Dell service and sale teams via video directly from Dell.com?

BOOM! Nearly 400 comments, +712, and 180 shares later, Mr. Dell lit up the blogosphere and got on customer service gurus’ radars. Most followers had positive feedback about the idea, and for a couple of days Mr. Dell was seen as the Customer Service Pioneer.

But I urge executives such as Dell to slow down. Not every new social media channel should be considered for business immediately. In the case of Google+:

  • It’s so new. There will be bugs. There will be privacy concerns. Have your service and sale teams figured it out already?
  • According to Google, company accounts or team accounts are not yet available on Google+ although many have already created an account and started interacting as a business. In fact, Google is shutting down these “non-user entities” on its social network.
  • For paid Google Apps subscribers, unfortunately Google+ isn’t available yet. It’s in the works, of course, but Google will definitely take its time in rolling this out to Apps customers. Google takes no chances with paid customers.
  • Hangouts multi-party videoconference has value in collaboration and even sales meetings, but customer service? Remember the sensational Chatroulette? Too many dicks ruined it (literally), but we all know it only takes one dick to send a video meeting into a tailspin.
  • Google has not published an API to suck data out of Google+. No API means no consistent method of third-party access. In turn this means the thousands of dollars you’d invested in social media monitoring tools won’t be able to pluck anything from Google+.

If your company still operates contact centers, just try to make them better. Believe me, you will find room for improvements. As I’ve written before, social media can become a distraction from keeping the fundamentals in check.

For now, Google+ has the cool “shiny toy” factor. Oh, and it’s already full of dicks. Execs beware!

Why speech tech still has potential

Firefox developer Jennifer Boriss went to a local mall to find test subjects for field research into browser usage, especially in hopes of improving Mozilla Firefox.

Then she stumbled upon “Joe,” a 60-year-old gentleman with no knowledge of how to use a computer, let a lone a Web browser. She opened a browser and asked Joe to perform tasks with the goal of “finding a local restaurant to eat at.”

First, Microsoft Internet Explorer. Disastrous results:

Joe: “I don’t know what anything means.”

(Joe reads the text on IE and clicks on “Suggested Sites”)

Me: “Why did you click on that?”

Joe: “I don’t really know what to do, so I thought this would suggest something to me.”

Next, Firefox. No better, except the Help pull-down menu attracted Joe’s attention which, of course, was no help to the task at hand:

“Help, that’s what I need!” says Joe. He clicks on Help, but looks disappointed at what he sees in the menu.

“None of these can help me,” he says.

Last, Google Chrome. Score! — but only because of luck:

He proceeds to read all of the words on Chrome’s new tab page, looking for any that may offer guidance. Luckily for Joe, he spies a link to Yelp which is marked San Francisco in Chrome’s new tab page. He clicks it, and, seeing restaurants, declares he’s won.

Joe had absolutely no idea on even the very basics of computer usage… Mouse navigation, clicking, UI elements (e.g. text input field, scroll bar, etc.), but he knew that the computer was capable of finding information.

This is a good example of why speech technology will thrive in the years to come. For tech savvy folks speech tech may offer an alternative input method — a speedy one at that — but for many others speech recognition is the difference between being computer literate or not.

Turning the traditional customer service flow upside-down

Some of the main frustration points from customers calling into the contact center:

  1. Having to go through an IVR first to get to a live person
  2. Long wait time
  3. The agent asking for the same information again when already given to the IVR

The typical self-service call flow has an IVR in the front-end to first find out something about the caller, then after retrieving the customer record, the call gets passed to a queue for a live agent. In essence, the IVR acts more like a receptionist to direct callers to the (supposedly) right department.

This is now the common flow in customer service. It’s the product of contact center industrialization, an evolution stemming from goals to lower labor costs, increase efficiency, and adopt automation.

That’s why now there’s a machine separating you, the customer, from obtaining good service.

How about flipping the flow — live agents first, IVR second?

When the caller dials the toll-free number, let an agent answer first. Well, go ahead and program a warm greeting nonetheless but that’s it. Then pass the call to an agent, queue the call if necessary.

All the agent has to do is say, “Hi. Thanks for calling Acme Bank, my name is Sam. How can I help you?”

There might be a brief silence on the other end of the line because the caller is probably surprised to be speaking with a live person at this point. And because the caller did not go through layers of menus and instructions, s/he has no expectation that the agent would know his/her account number, name, or other identifiable info. (Of course, some may propose an ANI match up-front to gather more info, but that usually has a low rate of success. Just keep it simple.)

The caller then tells the agent about the purpose of the call. The engaging agent now asks, “Would you like me to help you with that, or would you prefer our self-service system?” Imagine that — giving the caller a choice of how to obtain service! No forcing the use of DTMF, speech, or questionable gestures.

The caller can pick either one of those options: help me or self help. But guess what? Whichever option is chosen, it’s going to be a happy caller because s/he was in control.

Obviously, for this to work effectively the agent has to be well trained (and I mean, really well trained) and the IVR still has to have good design. But my theory is that you’ll end up with:

  • Happier callers because they don’t go through an IVR initially and get to talk to an agent sooner
  • Happier agents because they’re given better training and are empowered (first-tier service providers as opposed to getting the “leftovers” from IVR)
  • Shorter queue times because callers will be less frustrated and those who decide on self-service are unlikely to go back into queue
  • Simpler call flows because all inbound calls queue to an agent and the IVR only handles customers willing to use self-service
  • Better disaster recovery and business continuation because if the IVR goes down the agents are already capable of handling most aspects of customer service (might even be an added bonus when the caller hears “Sorry but our self-service system is unavailable at the moment. Allow me to assist you.”)

The big question: What about cost?

And that’s a good question. My thinking is that with this paradigm, some money typically spent on an IVR upfront solution can be shifted to invest in the agents because it’ll be less IVR ports, less IVR licenses, and less professional services (simpler call flow). So maybe the cost is comparable, but hopefully you end up with higher customer satisfaction scores and less agent turnover.

Have you seen something like this in the field? What pitfalls can this paradigm bring? Do managers prefer to invest in hardware, software, and licenses rather than people? Is this feasible in today’s corporate contact centers? And what the heck is Eugene smoking?

New front runner in Alcatel-Lucent Enterprise sale

Back in April news broke that Alcatel-Lucent was hanging a FOR SALE sign on its Enterprise business which includes Genesys, the top contact center software vendor. A few weeks later it’s reported that potential buyers were in San Francisco to discuss a deal worth around $1 billion, and that Siemens Enterprise Communications (SEN) was the front runner.

Now more than two months later Reuters reports of a new “lead horse” to buy ALU Enterprise: Permira:

Private equity firm Permira has emerged as the frontrunner to buy a collection of businesses put up for sale by telecom gear maker Alcatel-Lucent (ALUA.PA), sources familiar with the situation told Reuters.

The crown jewel of the sale is Genesys, which sells software for the operation of call centres and video conferencing and is attractive for its high margins.

“Permira is the lead horse,” one source said. It is offering $1.3 billion and the process is expected to last another month.

Permira and Alcatel-Lucent declined to comment.

Permira is a private equity firm founded in Europe with approximately €20 billion. It has a very diverse portfolio, owning companies worldwide in the life sciences, entertainment, fashion, technology, financial, and media sectors. This is a firm that invests in Silicon Hills’ (aka Austin, TX) Freescale Semiconductor as well as iconic fashion group Hugo Boss and Valentino.

So naturally, it wants to get into the networking and telecom business as well…

This latest Reuters report also sheds some light about this sale which leads me to believe SEN is no longer a serious contender to acquire ALU Enterprise.

First, sources told Reuters that an SEN offer had been rejected because of its “complicated structure.” Plus, SEN’s 51 percent owner the Gores Group “tried unsuccessfully to bring more partners into the bid, including KKR” (another global PE firm). The logical reason for SEN’s approach would be either it didn’t have the $1 billion or it didn’t want to risk that much on its own. Even though Alec Gores doesn’t shy away from high stakes gambling, Gores Group-backed SEN appears to be quite conservative in terms of investing in its future.

Second, Alcatel-Lucent unionized workers in France are jittery about a deal and have already staged a strike. French labor laws are a valid concern here. Just this will discourage bidders that aren’t experienced in dealing with European labor and unions.

Third, sources said Alcatel-Lucent has hired high-profile Qatalyst Partners as advisers on the sale. Qatalyst is known for negotiating great deals for its clients that are mostly in the tech sector, some notable transactions: National Semiconductor (acquired by Texas Instruments for $6.5 billion), Atheros (Qualcomm, $3.6B), Kosmix (Walmart, undisclosed), Netezza (IBM, $1.9B), 3PAR (HP, $2.4B), Palm (HP, $1.4B), and LifeSize (Logitech, $405 million). If the choice is between SEN and an established private equity firm like Permira, it’s unlikely that Qatalyst will advise picking SEN as the buyer.

So how close is Permira? Will the price go higher than $1.3B? Or could there even be an IPO in the U.S.?