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Flush with 'I's' Innovation...A Conversation With Interactive Intelligence Inc.


Since the company's founding in 1994, Interactive Intelligence has in many respects been a leader in technology innovation for contact center automation and enterprise IP telephony. Devoting 23 percent of spending on R&D last year is one big contributing factor, yet how does Interactive Intelligence stay out in front of the technology wave? Customer Inter@ction Solutions recently cornered company CEO Dr. Don Brown and the company's Senior Vice President of Marketing, Joe Staples, to gain some insight.

CIS: What are the driving factors behind Interactive Intelligence's innovation?

Brown: Perhaps the biggest factor is a tendency to look at a problem from a new perspective. By and large, we're software people. We came to the communications industry and looked at it in a totally new way. We weren't steeped in the traditional way of thinking in terms of separate systems such as PBXs, ACDs, call loggers, etc. We stepped back and took a big picture view. We basically asked, 'Why isn't there a software engine capable of processing all types of communications events the way there are database systems that handle various kinds of data?' We couldn't come up with a good answer, so we built one. Once we had the core software platform, it was easy to add features that provided the various functions the market needed.

Staples: Additionally, we are focused on promoting a company philosophy that innovation isn't limited to product development. We try to put innovative thinking into all aspects of our business: the way we support customers, the way we work with partners, the various methods we employ to market our offerings. All of these contribute to a culture truly driven by innovation.

CIS: Is innovation the ingredient that has led to the company's success?

Staples: It's one of the things that has contributed in a significant way. But innovation alone won't do it for us. Tomorrow, a handful of engineers with a business plan could rent space, start a company and create a new product. The ingredient that needs to be coupled with that innovation is experience. Customers need to ask, 'Does the vendor I'm buying from have the experience and infrastructure needed to successfully deploy and support the product?' We compete with companies that are very experienced ' some of them are literally a hundred years old. We also compete with companies that would rightfully be deemed as innovators, but when it comes to successfully combining the two elements of innovation and experience, we really stand alone. And that is the value we deliver to our customers.

CIS: Is it becoming more difficult to deliver innovative products as the company continues to grow and evolve?

Brown: We've been pretty successful at repeated innovation. When we started off, voice over IP (VoIP) was only an idea. As VoIP in general and the session initiation protocol (SIP) standard in particular solidified, we were able to quickly recast our software approach in those terms to help unshackle customers from circuit-switched telephony, which necessitated expensive ' and limiting ' voice processing boards. This is directly attributable to our innovative product line, which works as a separate applications layer so we can more easily adapt to whatever new switching platforms or other emerging technologies the future brings.

In addition, I would say that while growth has given us the added benefit of experience, our original culture continues to permeate the organization, which means we don't just accept the 'status quo' because that's the way it's always been done. For instance, though competitors derided us for offering the first Windows-based bundled communications solution, saying 'it wouldn't work and nobody would buy it,' today every one of them has attempted to emulate that architecture. Similarly, we were met with major skepticism when we said we could develop our own SIP media server to dramatically lower the cost of VoIP deployments, yet this year we're releasing that media server. This accomplishment, once again, marks another innovation in the marketplace.

CIS: Is there a specific process that drives your product innovation?

Brown: I think we've built a very effective, flexible product management process that keeps our development efforts on track. That said, let me give you a couple of examples where I think we differ from the norm. If you consider most companies' product planning processes, they look at market trends and survey customers to determine how to set product development priorities based on what customers are asking for. We follow that same pattern, but we believe that only gets to a portion of the story. In some cases, customers haven't thought of things they want because they are somewhat limited in their view. However, if that new product was available, they'd buy it. So we use a lot of blank sheets of paper and start our thought processes without bounds or limitations. We take a much more forward-looking view. Another area of difference relates to our approach compared to our larger competitors. We have a size advantage. While we are a growing, profitable, public company with more than 1,500 customers, we are still of a size that allows our customers and partners to be able to have a significant impact on the direction of our product lines. We meet with them regularly. We whiteboard new ideas together. They contribute to the process. And as a CEO, I am still actively involved in the direction of our product offerings. Try and get those things from one of our $15 billion competitors.

CIS: What benefits does your approach provide your customers?

Staples: The key benefit is competitive advantage. The contact center, and business communications as a whole, have evolved significantly over the past few years. No longer is it sufficient to simply route calls and respond politely to inquiries. In today's over-paced, competitive world, companies are looking at technology as a means of helping them compete more effectively. This is accomplished with flexible, cost-effective and easy-to-manage software that will allow organizations to improve customer satisfaction levels, be more efficient, deliver information in a timelier manner, and a host of other advantages.

CIS: Don, you have founded three successful software companies, what has been the motivation behind them and has there been a common thread to their successes?

Brown: The first was fairly limited in its scope: financial software for automobile dealers. It arose out of a relationship with a friend who had a string of dealerships and was in need of a specific solution. The second company was almost at the other extreme. I began with a fairly abstract technology (artificial intelligence) that I had done some work on in graduate school and tried to figure out how to commercialize it with no specific application in mind. The third company, Interactive Intelligence, was a happy medium. It dealt with a huge and interesting technology area ' business communications ' but with an eye on specific application areas such as corporate contact centers. In all three cases, the motivation was to do something creative and see it grow. The common thread is a love of building something from scratch and having people rave over how it makes a difference in their lives.

CIS: Joe, you've been in this industry for a long time. How have you seen it change?

Staples: I've been in technology my entire 20-plus year career. My entrance into the communications sector was in 1992 with Novell. Back then, we produced some of the early standards-based product work around computer-telephony integration. Popping a database screen on an incoming call was a big deal. It almost makes me laugh now when I hear companies still talking about CTI. That is yesterday's news. What we're doing here goes so far beyond CTI. The technologies and platforms have converged. It's now about building great software applications to enhance business communications.

CIS: Can you talk a little bit about your subsidiary, Vonexus?

Brown: We spun off Vonexus as a wholly-owned subsidiary in July 2004. Vonexus is completely focused on the enterprise IP-PBX market, is the only 100-percent Microsoft-based offering in that space, and offers some very rich applications that go well beyond competitive offerings. It is not a new, yet-to-be-proven product, but is instead a derivative of the products we have been delivering since the mid 1990s. My guess is that the question behind your question might be: 'Why did we spin Vonexus out as a separate company?' The answer to that is one of focus. We wanted to create a stand-alone organization that would not be distracted by our traditional contact center business, and that could really take advantage of the tremendous growth in the enterprise IP telephony market.

CIS: Where do you see the company headed?

Staples: Without tipping our hand too much, we are clearly focused on growth. Currently, we are growing faster than the contact center market as a whole, and our Vonexus subsidiary is showing very nice quarter-over-quarter sequential growth. We just launched a SIP media server that dramatically increases the scalability of our product and which will continue to give us strength in larger opportunities. We have some significant product releases slated for the spring of 2006, including some completely new products that we believe will provide net-new opportunities for us. We are also putting effort behind several key vertical markets where we already have a good strong track record. A lot of great things are in the works.

CIS: If you looked out a few years, what do you think will be the biggest change we can anticipate in the contact center market?

Brown: Products will move up the cognitive ladder to help contact centers run more effectively. In the early days, the innovation was breaking down barriers between different communication devices: PBXs, ACDs, IVRs, etc. The second phase was building this consolidated application suite atop IP in order to make its capabilities available anytime and anywhere. The third phase is making the systems more intelligent ' enabling them to actually automate end-to-end processes instead of just providing a list of features that a contact center manager must figure out how to use.

As an example, today vendors of quality monitoring products provide a variety of functions: record a call, set rules as to which calls to record, bring up a form to score a recorded call, etc. They then provide integration services and training that a contact center manager can use to implement quality monitoring. In the future, quality monitoring systems will take the next step and actually implement the entire process based on recognized best practices. For example, a wizard will 'interview' the contact center manager and ask for some information: 'How many calls per agent do you want to record? By the way, the industry average is two per month. Which supervisors do you want to grade the recordings?' and so on. The system will take this information and implement the process. It will automatically schedule the recording of agent calls. It will assign recordings to supervisors for scoring. It will remind them if they haven't scored the recorded calls within a certain period of time. It will periodically give the same recording to multiple supervisors and compare the scores they assign. If the variation is too great, it will schedule a group session to establish scoring guidelines. It will point out agents whose quality is substandard and make recommendations for improvement. All this will happen without legions of consultants and without expensive systems integration. As I describe this, I realize that everything comes full circle. I'll soon be doing artificial intelligence again!

Interactive Intelligence Inc. (www.inin.com) offers business communications software solutions for contact center automation, enterprise IP telephony, self-service automation and unified communications. The company was founded in 1994 and has more than 1,500 customers worldwide. Recent awards include Software Magazine's 2005 Top 500 Global Software and Services Companies, Miercom's 2005 Best Integrated Multimedia IP Contact Center product award, and Frost & Sullivan's 2005 Excellence in Technology of the Year Award. Interactive Intelligence employs approximately 350 people and is headquartered in Indianapolis. The company has 12 offices throughout North America, Europe and Asia Pacific. Interactive Intelligence can be reached at 317-872-3000 or [email protected].

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