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Doubling-Down on CaaS Pays Off

On the company's January 2009 earnings call, CEO Don Brown commented that Interactive Intelligence had "really doubled down" on Communications-as-a-Service (CaaS). By leveraging advancements in both their own and other technology, virtualization in particular, the company has been able to decrease the cost model of its CaaS offering and improve pricing while actually increasing the profitability. Brown went on to say that, "we are going after CaaS in a more vigorous way and seeing a fair amount of interest in the market."This week Interactive Intelligence announced a CaaS win with New Era, a ticketing and database marketing solution company for sports organizations, entertainment companies and public assembly facilities. According to the press release, one of the main goals of the change is to add multichannel customer service options (e.g., email and web routing). The CaaS solution will not only replace the Avaya call center solution that was in place. Interactive Intelligence's CaaS offering, like its CPE-based contact center application, includes a full-featured enterprise telephony application.

Why did New Era choose a CaaS solution? Because it was a great fit with their unique business environment. Ticketing is by its nature a "bursty" business - ninety percent of the company's activity takes place when a ticket "on-sale" event occurs. Some events can generate over 300,000 calls or web interactions in a hour, say Hannah Montana or Billy Joel.

In a CPE model, New Era would always be paying for the agent licenses to support peak traffic, and still might run out in periods of unusually high demand. In a CaaS model, Interactive Intelligence and New Era could--and did--work together to define creative payment algorithms.

In its first quarter earnings call this week, Interactive Intelligence reiterated that the number of CaaS opportunities with significant revenue is definitely on the upswing. Looking back, several of my past few blogs have dealt with hosted/Caas/SaaS-type offerings: CosmoCom, LiveOps, and AT&T and Genesys. We may be seeing the beginning of a perfect storm: leading-edge SIP-based network and software solutions hitting a capital expenditure-challenged market ready to not only consider but implement them.