1. What new enhancements, services, etc. can we expect from VoiceLog in 2006?
We’re integrating some exciting new technologies. These include real-time performance metrics, enhanced speech analytics, additional e-coaching tools and more VOIP recording options. And, of course, all of these new technologies are available on the same “pay as you go” pricing model that is integral to our VirtualLogger service. This means that clients can try some very sophisticated technologies that would normally cost many tens or hundreds of thousands of dollars for a small fraction of what they would pay another vendor.
We continue to work on remote recording and quality monitoring applications, which will enable us to record for a client without actually installing any equipment at the client’s site. This is especially appealing for short-term projects or clients with unusual spikes in volume. It also works well for clients with a large number of small offices, such as rental companies or insurance agents.
One other set of enhancements we’re working on is in the area of security. Although we provide more security than most in-house systems ever could, it is still a concern to some clients. We are continually improving our measures with the most advanced means available.
2. From a user point of view, what do they perceive as the prime benefits of your hosted solution in comparison with in house solutions?
Obviously, the biggest benefit is the small initial investment to get started, which offers many side benefits, as well. For example, because of the small cash outlay, the client has the flexibility to change quickly as business conditions change. Their Return On Investment is higher. And they have the capital available to invest in other technologies they may also need.
Beyond the cash, we think our service is better because of the pressure our “pay as you go” model puts on us. After all, it’s easier for a client to leave, so there’s much more pressure on us to keep the customer happy with our service. Another aspect of the same point is that we are forced to keep up with the latest technology – and therefore keep our clients up to date as well. One of the biggest complaints we hear from users of traditional systems is that they’re forced to do “forklift upgrades” every three to five years, and that’s just not an issue for us.
A final point is the lower operating cost, which results in a lower Total Cost of Ownership or TCO. We’re monitoring the system for clients and taking care of issues like archiving the audio storage and backing up hard drives. That reduces the clients’ demands on their IT staff, which can get very expensive.
3. What are the most significant objections to the hosted solution approach?
I think some clients are skeptical of how low our pricing is. They wonder how we can deliver such high quality service at such a low monthly fee. But there are good economies of scale that help us keep our costs down in ways that aren’t available to clients who are running individual recorders in their own shop.
Another objection I worry about is one that is unspoken – lack of familiarity with a hosted solution in the recording/monitoring context. But that’s changing quickly, partly because of the tremendous success of hosted solutions in other areas and partly because our client base has grown so quickly.
As far as spoken objections, a lot of the concerns we hear about security are pretty easily addressed. For example, we can keep the client’s data completely at their site if they prefer that. In addition, all Internet transmissions are protected using Secure Sockets Layer technology. Customers have the option of purchasing virtual private networking (VPN) and we are designed to comply with standard government IS security requirements, such as the ones required by HIPPA and GLBA. We can block access from certain machines or restrict access to specific users or groups of users.
4. Where do you see the market is going concerning hosted solutions for 2006?
Growth, growth and more growth! Seriously, this summer we saw reports from several industry analysts talking about how “software as a service” and hosted solutions were going to be the fastest-growing segments of software worldwide. With the tremendous rates of change in the recording/monitoring space, we think our hosted on-demand approach makes even more sense. After all, who wants to buy a traditional recorder today and then have to trade it out for a VOIP recorder in a year or two? With us, you can switch from TDM to VOIP and back again and never lose a dime of capital expenditure.
5. Do your solutions target a specific sized contact center?
We used to think that our sweet spot was the small to medium center – maybe up to a maximum of 400 seats. But we’ve had such strong interest from very large clients that our view there has changed. Clearly we are very cost-effective for small installations, but we’re also seeing installations of 700, 800, even 2,000 seats where clients are seeing value. Larger enterprises like the fact that we consolidate recordings from multiple locations and they are securely accessible from almost anywhere. And we’re scalable to the largest centers out there. So I’d have to say that we cover the waterfront.
6. Under what circumstances is a hosted solution is a better fit than an in house solution? Are there circumstances where an in house solution is a better fit?
We believe that hosted is always a better solution. That said, there are some situations where we are especially strong.
We do very well with multi-location clients, because we can provide centralized access and management that’s very seamless. We’re very good for clients who have seasonal fluctuations in volume, such as catalog companies. One of our clients, for example, triples their volume from October through December, and doesn’t have to pay for those licenses the rest of the year. Outsourcers like our ability to match their clients’ projects – they don’t have to commit any further than the contracts they have with their clients. And someone who needs flexibility in growth or changes in technology will very much appreciate the way we do business.
I’m sure there might be one or two situations in which an in-house solution might be better, but I can’t think of any. Of course, if a customer wants an in-house solution, we can offer that as well. We can even provide a hybrid solution where the client has a perpetual license, but we’re providing many of our enhanced services on a month-to-month basis.
7. Does VoiceLog’s provide functionality that in house solutions such as NICE, Verint and Witness do not? If so, what type of functionality?
We do. For one thing, we can break out our services on an “a la carte” basis. So a client with a NICE recorder could ask us to archive their recordings in our Recording Warehouse. And we have the QA staff and the expertise to listen to and score recordings regardless of the recorder a client uses. Speech analytics is also available a la carte, so we can analyze a client’s recordings from another system.
We can also do remote recording or monitoring that requires little or no hardware installed at the client site, and I’m not aware of any other vendor offering that.
And all of our clients can benefit from our centralized storage and monitoring services, which come standard with our service. I’m pretty sure that if you buy a system from any other vendor, you’re basically on your own as far as data storage, archiving and system monitoring.
8. Several of your competitors have incorporated analytics capabilities as part of their offerings? Does VoiceLog provide such capabilities?
We’re very close to integrating a real-time dashboard and performance analytics offering in our system. Unlike the bigger players who like to develop their own solutions, we think it makes sense to partner with companies who are experts in their areas to provide these kinds of services. That approach gives the customer a “best of breed” solution and frankly, is a lot more cost-effective. I’m expecting to have the offering by the end of first quarter 2006.
9. Since is VoiceLog is a major player in the third party verification business, what percentage of your revenue 2005 was from TPV? What percentage was from your call recording business? What do you foresee the split to be in 2006?
It’s a great question because it shows the financial resources we can bring to bear in the call recording space. We’re investing much of the profit from TPV into call recording, which is a much more mature business. And there are strong synergies between the two businesses that let us improve all our offerings with a single investment. At year end, about 85% of our revenue came from TPV and the other 15% was from call recording. Recording and monitoring is growing so fast that we expect it to be a minimum of 25% of 2006 revenue, possibly as high as one-third.
10. What do you anticipate the economic climate to be for contact center vendors in 2006? Has the decision making cycle changed over the past few years?
We see the economy doing well, which should mean continued growth in the contact center space. But another great aspect of the hosted model is that our “pay as you go” model frees companies from the fear of a fixed investment since they can cut back if the economy slows down. And we speed up the decision cycle as well. With less risk and no need to wait for the capital budgeting cycle, call centers can enjoy state-of-the-art technology in days or weeks instead of months and years. We’ve already seen that with some of our clients, and we expect more of that in 2006 and beyond.