Published on the 30/10/2014 | Written by Beverley Head
Australian enterprise demand for Interactive Intelligence’s software looks set to allow the local subsidiary to eclipse the company’s performance across Europe…
Massive demand for cloud-based systems is helping to boost the growth being experienced by Interactive Intelligence’s Australian subsidiary.
Under the stewardship of Brendan Maree, vice president for Australia, New Zealand and Japan, the company last year grew local revenues by about 20 percent, and has a strong pipeline for its customer experience and unified communications systems with “eight or nine $1 million deals – all cloud-based” currently being negotiated.
In Australia about 87 percent of all sales are for cloud-based solutions, compared to a 50:50 split of on premise and cloud across the globe.
Dr Donald Brown, founder and CEO of the company who was in Australia this week, said that “I use Brendan as a bludgeon” against the company’s other subsidiaries because of the growth that was being achieved locally.
Australian revenues account for just less than half of EMEA’s (Europe, Middle East and Africa) and Brown said that its growth trajectory suggested it would overtake Europe in the next couple of years hinting that the European business is a significant underperformer given the relative sizes of the markets.
Australia has been an enthusiastic cloud adopter, which goes some way to explaining local demand.
The transition to cloud has not been without its challenges for Interactive Intelligence Brown acknowledged, saying that it had required a substantial rethink of business strategy and partnerships. While the company had traditionally offered resellers of on premise software 35-40 points of margin on a sale, that was not sustainable in a cloud model.
“In North America our partners wanted nothing to do with it, they said “you are evil”, which led the company to sell cloud solutions directly. “It was really a wrenching transition,” said Brown who added that it led to a different relationship with customers.
It has also led to a different relationship with the resellers that do now want to work with Interactive to sell cloud-based solutions, and which are prepared to accept the 15 percent recurring income they receive from cloud renewals.
“They need to make the shift or they will die,” warned Maree.
Interactive Intelligence is also reworking its software so that it can be offered as a multi-tenanted cloud solution in the future, rather than the virtualised version of the software that the company had previously sold as an on-premise solution but then reworked as a single tenanted cloud solution.
