Happy New Year (2011 in review)!

Thank you from the bottom of my heart for your support and readership. InsideCTI will soon be two years old — an eternity for any (niche) blog! I’ve come to realize that a great number of you share the same passion for contact center news and customer service principles.

This is evident as the blog saw a 2x increase in visitors and pageviews year-over-year. Okay, maybe I should thank those of you who fell asleep at the keyboard reading the blog and your nose happened to repeatedly hit Reload? I’ll still count those as valid page hits!

Allow me to share some statistics (something we love in dealing with contact centers, no?):

Top 3 Browsers: Internet Explorer (39%), Firefox (26%), Chrome (24%). Google Chrome has really caught on! Interestingly, Android Browser appeared on the list this year with 0.05%.

Top 3 Operating Systems: Windows (79%), Macs (15%), and iPad (3.5%). How amazing is that? The iPad made it to the top three beating out Linux (2%). In fact, the iPad took away some iPhone numbers (0.08% in 2011, 1.6% in 2010) too!

Top 3 Mobile Operating Systems: iPad (96%), iPhone (2%), and Android (2%). The Apple iPad continue to dominate the mobile browsing experience. The sad news? BlackBerry devices registered zero hits in 2011, but actually had 3.44% in 2010.

Top Referrals: Both Facebook and Twitter refer almost equally at 15%, and LinkedIn around 8%. An year ago Twitter dominated Facebook in terms of referrals.

In terms of articles, there was a lot of interest surrounding the award-winning Groupama iPhone customer service app; then there was the drama from the Alcatel-Lucent sale of its Enterprise business (alas only Genesys was sold to Permira for $1.3 billion). Top 5 Articles:

  1. Groupama iPhone app is customer self-service in the smartphone era
  2. Alcatel-Lucent inches closer to selling enterprise business
  3. Four simple rules for new technology evaluation (guest post)
  4. New front runner in Alcatel-Lucent Enterprise sale
  5. Enterprise Connect: NEC UC&C architecture targets IT managers and connected workforce (guest post)

So there you have it, a brief 2011 year in review.

What developments can we anticipate in 2012? Here are my thoughts:

  • Depending on how soon Apple takes Siri out of beta and how open it makes the APIs, we may start to see the beginnings of a mobile speech-enabled customer service app. Much like the innovative Groupama app, except now with speech capabilities.
  • Avaya will finally IPO, but the reception from investors will be dismal because PBXs and communications equipment are boring in the age of social-, mobile-, and location-aware products from young companies.
  • Enterprise video will continue to be hyped, primarily by vendors in order to push their gears. Most workers are content with just something like Skype and Google Hangout.
  • The financial uncertainty in Europe and sociopolitical unrest in countries like Egypt will impact contact center outsourcers and the BPO market. Asia and Latin America will be where these businesses flow.
  • Bella Swan becomes the vampire next door.

Happy New Year and I look forward to bringing you informative and entertaining contact center content in 2012!

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Nuance to acquire Vlingo, may run out of competitors to buy (sue) in 2012

Major breaking news in speech tech: Nuance announced today that it will scoop up Vlingo. Oh, and happy Hanukkah (not in the press release).

Supposedly Vlingo was the other company that Apple was evaluating when developing Siri on the iPhone 4S. Here’s a bit of backstory between Vlingo and Nuance. It’s not pretty, but now it’s over. TechCrunch also chimes in.

This would be the gazillionth company that Nuance has acquired in recent years. In fact, there are hardly any other competitors left, so I predict that the speech giant may enter a new market soon. I’m thinking a wearable device for pets which will translate barks and meows into synthesized human speech. It’ll need a lot of animal test subjects in such case, therefore don’t be surprised if it starts buying pet stores (chains and mom-and-pops) as well as operate zoos.

General consumers and techies alike have raised concerns over AT&T buying T-Mobile (deal is now off) for fear of an anti-competitive carrier marketplace. Yet nobody thinks about the speech marketplace whenever they ask Siri to perform a task.

The press release:

Burlington, Mass. – December 20, 2011 – Nuance Communications, Inc. (NASDAQ: NUAN) announced it has signed an agreement to acquire Vlingo, Inc. Fueled by unprecedented demand for intelligent voice interfaces that combine voice, language understanding and semantic processing, Nuance and Vlingo will combine their deep innovation and R&D expertise to deliver next-generation natural language interfaces across numerous markets and industries.

Consumer interest and demand for virtual assistant and voice-enabled capabilities have exploded in recent months, creating a $5 billion market opportunity that spans phones, tablets, cars, televisions, navigation devices, music players, PCs and more. Both Nuance and Vlingo see an unprecedented appetite for intelligent devices that understand the spoken word and deliver outcomes for consumers and professionals.

“Inspired by the introduction of services such as Apple’s Siri and our own Dragon Go!, virtually every mobile and consumer electronics company on the planet is looking for ways to integrate natural, conversational voice interactions into their mobile products, applications, and services,” said Mike Thompson, Senior Vice President and General Manager, Nuance Mobile.  “By acquiring Vlingo, we are able to accelerate the pace of innovation to meet this demand.”

“Vlingo and Nuance have long shared a similar vision for the power and global proliferation of mobile voice and language understanding. As a result of our complementary research and development efforts, our companies are stronger together than alone. Our combined resources afford us the opportunity to better compete, and offer a powerful proposition to customers, partners and developers,” said Dave Grannan, CEO, Vlingo.

By harnessing the combined expertise in voice, language and multilingual capabilities, Nuance will be able to take advantage of the adoption of intelligent mobile assistants, where consumers, businesses, doctors and patients can engage in more human, natural interactions with devices and systems all over the world.

Vlingo is a Virtual Assistant that turns your words into action by combining voice to text technology, natural language processing, and Vlingo’s Intent Engine to understand the user’s intent and take the appropriate action. Founded in 2006, Vlingo is backed by Charles River Ventures, Sigma Partners, Yahoo! and AT&T and headquartered in Cambridge, Massachusetts. For more information, go to www.vlingo.com.

Nuance is a leading provider of voice and language solutions for businesses and consumers around the world. Its technologies, applications and services make the user experience more compelling by transforming the way people interact with information and how they create, share and use documents. Every day, millions of users and thousands of businesses experience Nuance’s proven applications and professional services. For more information, please visit: nuance.com.

Nuance and the Nuance logo are trademarks or registered trademarks of Nuance Communications, Inc. or its subsidiaries in the United States of America and/or other countries. All other company names or product names may be the trademarks of their respective owners.

Statements in this press release regarding the proposed transaction between Nuance and Vlingo, the market opportunity, the pace of innovation, increased customer demand in the mobile market, future product offerings by the combined company, and any other statements about Nuance managements’ future expectations, beliefs, goals, plans or prospects constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” estimates and similar expressions) should also be considered to be forward looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward looking statements, including the ability to consummate the transaction; the ability of Nuance to successfully integrate Vlingo’s operations and employees; the ability to realize anticipated synergies and cost savings; the failure to retain customers; and the other factors described in the ability of Nuance to integrate the product offerings of the combined companies and other the factors described in Nuance’s Annual Report on Form 10 K for the fiscal year ended September 30, 2011 and other filings with the U.S. Securities and Exchange Commission. Nuance disclaims any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this press release.

Siemens Enterprise Communications preps for global relaunch

What’s on the new year resolution list of Siemens Enterprise Communications?

Start referring to itself as SEC and not SEN? Wow businesses in both North America and Europe with cloud solutions? Make Siemens a household name among American contact centers?

Probably all of the above and then some. Adweek reports that the company will dish out $90 million in the coming year to spend on media projects in the U.S., the U.K., Germany, and Brazil:

Horizon Media has won a global media review that began with six agencies before narrowing to three and then two.

Siemens Enterprise Communications selected Horizon to handle the planning and buying of media in the company’s four core markets: the U.S., the U.K., Germany, and Brazil, said Mike Drexler of Drexler Fajen & Partners, the New York-based consultancy that managed the search. Annual media spending is projected at $90 million.

Congratulations to Horizon Media! It’ll be quite a challenge facing off the well-oiled media machines representing the likes of Cisco, Microsoft, Avaya, and Alcatel-Lucent, but Siemens is a very renowned brand as well. A global relaunch and rebranding may be just what the technology decision makers need to see SEN (SEC?) in a different light.

Merry Christmas!

Is this your favorite time of the year? Christmas is just a few days away!

Well, I hope you enjoy the Christmas holiday with family and friends. And if your contact center is outsourced to the Philippines, halfway across the world, I don’t think they’re working as hard, as shown on this video of 7,000 partying agents (no embedding allowed but it’s worth a jump — trust me).

I have no idea what the reporter is saying but I think these agents deserve a good party!

Merry Christmas, y’all.

Avaya wants to buy RADVISION

Year after year of losses and a mountain of debt shall not prevent Avaya from gobbling up companies. Apparently Avaya is interested in Israel-based RADVISION, a maker of videoconferencing solutions, according to Globes:

Sources inform ”Globes” that Avaya plc (NYSE: AV) is in advanced talks to acquire video conferencing solutions developer Radvision Ltd. (Nasdaq:RVSN; TASE: RVSN) for $200 million, a 30% premium on yesterday’s market cap.

The acquisition of RadVision would give Avaya a new business, where it would compete against Cisco Systems Inc. (Nasdaq: CSCO) and Polycom Inc. (Nasdaq: PLCM). However, it cannot be ruled out that other companies will open talks to acquire RadVision.

Zohar Zisapel owns 26.4% of RadVision and his brother, Yehuda, owns 6.3%. RadVision’s share price rose 10% in the ten days through yesterday. The company’s business has been going through rough times. Revenue totaled $56.2 million in January-September 18.2% less than in the corresponding period of 2010, and its net loss nearly quadrupled to $19 million. The company fourth quarter guidance is equally bleak: $18 million revenue, 31% less than for the corresponding quarter, and a net loss of $6.8 million.

This is not the first time that the Zisapels have been in talks to sell Radvision. Negotiations with Hewlett Packard Co. (NYSE:HPQ) a year ago broke down over a disagreement on the price.

Let’s see — $200 million… No problem, that’s only a fraction of the $863 million Avaya lost in 2011! What’s another couple of million dollars…

Here’s the thing: Why does Avaya think it needs to get deeper into the telepresence and videoconferencing business? Clearly, this is a reaction to Cisco’s dominance in the area, but is it a wise move? Avaya has also been trying to nip at Cisco’s market share in network equipment, an area that’s undoubtedly Cisco’s crown jewel.

Telepresence and networking are two markets that Cisco will strongly defend until its death. And shareholders expect that, just look at what transpired a few months ago with the company.

Avaya must think $200 million for RADVISION is a steal or something? It’s a money-losing operation so far, but we get to expand our videoconferencing business!

It’s a crowded business. It’s not just Cisco, it’s also established firms like Polycom and Microsoft, plus the fairly new tech disrupters like Vidyo and Google. Last I checked, these companies haven’t been losing $700M-1.3B for the past few years or been burdened with $6B in long-term debts…

The company that Avaya needs to look into is CommonSense. It’s a private company with a very large global footprint, although a lot of times it prefers to be in stealth mode. Scoop it up before others do…

Report claims Avaya on path to implosion

A few days ago I stumbled upon a report on Jeff Hawkes’ (of Sonic Management Group) blog about a near-taboo topic in telecom: the health of Avaya, and whether the business is spiraling toward implosion.

Surprisingly, I haven’t seen or heard much discussion in the telecom blogosphere and tweetverse about this report, which is a bit baffling considering the gigantic market share Avaya holds in the industry and the numerous analysts that cover every move about this company. At least there were several readers who chimed in with their own comments on Hawkes’ blog…

But in (bleak) summary:

  • The company failed to earn a profit since 2007, the year of its leveraged buyout (LBO) by TPG and Silver Lake; losses were $1.3 billion in 2008, $845 million in 2009, $871 million in 2010, and $863 million in 2011 (from latest 10-K filing)
  • $4 billion worth of equity destroyed from 2007 to 2010
  • Long-term debt now at $6.1 billion
  • Filed to IPO in June 2011 but yet to complete the transaction; hopes to raise $1 billion from 20% of the company
  • Avaya may end up being the Eastman Kodak of the telecom industry

You simply cannot read the financial numbers about Avaya and not get a chill down your spine. Obviously many companies are struggling in this depressed economy, but in Avaya’s case the losses and debts are staggering, especially when the company counts TPG and Silver Lake as backers.

Dear Avaya, your brand may look mesmerizing in red but not your financials.

What do you think the future holds for Avaya? Definitely something to watch out for in the new year…

European cloud now available from inContact

Frohe Wiehnachten from inContact — the company announced the availability of its European cloud!

Not an easy feat considering the agreement was made with Siemens Enterprise Communications just half a year ago. According to the company’s 10-Q filing, it had to borrow $2.5 million in October 2011 to finance the European cloud buildout (Siemens guaranteed the loan). With these data centers squared away and operational, inContact can look forward to the $5 million in the new year from SEN.

Kudos to the inContact team for pulling this off in a relatively short timeframe. Good things seem to be coming its way (e.g. the recent Verzizon partnership) along with more aggressive sales and marketing, so hopefully we’ll see a significant improvement in its income statement in the near term…

The inContact press release:

SALT LAKE CITY (December 7, 2011) – inContact (NASDAQ: SAAS), the leading provider of cloud-based contact center software and contact center agent optimization tools, today announced the availability of the company’s multi-million dollar build-out of its full European cloud network. The European cloud network features redundant data centers in Munich and Frankfurt, Germany, a replica of the best-in-class network in the United States.

The new European facilities will enable inContact to provide multi-national customers with regional access to cloud contact center applications to better serve local needs.  These capabilities include regionally-stored calls and contacts, broader language support for speech applications and data handling to comply with European data security regulations.

“We applied the best practices we have honed over the past several years in our US data centers to building a fully redundant cloud network and application environment in Europe,” said Scott Welch, inContact Chief Operations Officer. “These new centers greatly increase our ability to support European and multi-national customers, as well as our new and growing partnership with Siemens Enterprise Communications.”

The Frankfurt and Munich sites further enable multi-national customers to take advantage of a true “Follow the Sun” model, where the appropriate contacts are delivered to properly skilled and available agents regardless of geography or time zone. It offers a universal queue, combined with an intelligent contact distribution platform with global reach, to ensure that the right contact is always handled by the right agent, providing a consistent customer experience.

Concluded Welch, “As we continue to grow our international presence, we have a clear road map and winning technology approach that will enable us to quickly expand into other geographies.”

inContact Data Centers and Voice Gateways Map
Figure 1.1: inContact Data Centers and Voice Gateways Supporting Multi-National Business

About inContact

inContact (NASDAQ: SAAS) helps contact centers around the globe create profitable customer experiences through its powerful portfolio of cloud-based contact center software solutions. The company’s services and solutions enable contact centers to operate more efficiently, optimize the cost and quality of every customer interaction, create new pathways to profit and ensure ongoing customer-centric business improvement and growth. To learn more, visit www.inContact.com.

Additional Information
•    Learn about inContact international services
•    Follow @inContact on Twitter
•    Become a fan of inContact on Facebook
•    Read more about contact center best practices

Safe Harbor Statement: The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking information made on the Company’s behalf. All statements, other than statements of historical facts which address the Company’s expectations of sources of capital or which express the Company’s expectation for the future with respect to financial performance or operating strategies, can be identified as forward-looking statements. Such statements made by the Company are based on knowledge of the environment in which it operates, but because of the factors previously listed, as well as other factors beyond the control of the Company, actual results may differ materially from the expectations expressed in the forward-looking statements. (For the complete statement, please click here.)

inContact® is the registered trademark of inContact, Inc. All other marks are the property of their respective owners.