Publisher's Outlook

Vocalocity: One Cloud Provider's Path to Growth

By Rich Tehrani, CEO, TMC  |  April 30, 2012

This article originally appeared in the April 2012 issue of Customer Interaction Solutions

Cloud computing providers are all the rage these days and cloud communications is no exception. Witness the growth of 8x8 as well as the M&A interest in the space evidenced by the recent acquisition of M5 Networks (News - Alert) by ShoreTel, and the acquisition of Aptela (News - Alert) by Vocalocity.

I recently had a chance to speak with Wain Kellum, the CEO Vocalocity, to get a sense of how his company is differentiating itself from other hosted/cloud providers in the space.

First off the combined company has more than 15,000 customers and more than 100,000 network endpoints. The main take away from the conversation to me is that voice is increasingly becoming a service integration and enhancement game. In other words, cloud-based dial tone is necessary but only a very small piece of what customers will come to expect from cloud communications companies.

In fact, Kellum told me the company adds new innovations each quarter for the same price. While we expect continuous upgrades from computer companies like Microsoft, Apple and Google’s Android (News - Alert), this focus on increased innovation has become a bigger deal in telecom as the cloud has become more important.

Salesforce often will tell you that a reason to purchase service from the company is to avoid the disruption and compatibility issues inherent in typical premises-based upgrades. From an IT department’s perspective, what could be better than coming in on a Monday morning and learning that your software-as- a-service solution has been upgraded automatically. Premises-based upgrades typically required IT teams to come in on weekends, and often these upgrades needed to be rolled back because they caused other compatibility issues. This, of course, explains why often, many organizations run old software – a few versions behind the current one – because they don’t want to be on the bleeding edge of the product upgrade cycle.

So what sorts of innovations can a cloud-based communications provider deliver? One that Vocalocity employs is checking the IP address of phone calls every five seconds and in the case of an outage, transferring the call to a back-up number like a cell phone. In addition, the company has integration into standard CRM and accounting systems as well as integration in the insurance space through a recently announced integration with eAgent, an online insurance and document management company. Accounting integration with solutions such as NetSuite (News - Alert), Quickbooks and Sage allows customers to see the payment history of companies when they are on the phone. This could be quite useful as not only an aid to the collections process but to ensure sales isn’t spending excess time selling to customers who aren’t paying their current bills.

The company also has big data analytics capabilities, allowing companies to determine which workers are less productive and which customers are consuming the most agent time.

Wain also went into a story about an ice storm which hit Atlanta, where the company has its headquarters, and he said the company ran seamlessly – employees could take and receive calls from home, and he was able to manage everything from his iPhone. He added that none of his customers knew the city was shut down.

One of the interesting areas of growth he sees is enabling hybrid systems where the hosted solution sits in the background and connects multiple branches or offices. Using ATA adapters legacy phones become a “poor man’s SIP phone,” he explained, adding that the hosted solution can also be used as the redundant service.

The company’s backend systems consist of multiple cloud vendors’ solutions and federation at the call level. Customer calls are lumped into small clusters and can be transitioned to another area of the country as a result of a catastrophic problem in one location.

The company plans to continue to acquire and thinks there is an opportunity to buy a number of hosted providers who aren’t innovating and then rolling the customers over into its platform. It has no plans to go public at the moment and doesn’t need to raise money, but may consider getting financing if it finds a very large acquisition target. Recently I opined about future acquisitions that will take place in the cloud market in response to the ShoreTel M5 merger and focused on the CPE companies like Cisco (News - Alert) and Avaya. It should be clear to all of us that the cloud players too are looking to grow through M&A and companies like Vocalocity, 8x8 and others are obviously not standing still.

Edited by Stefania Viscusi