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8X8 Gives SMBs More Bang for Their Buck

TMCnews Featured Article


August 04, 2010

8X8 Gives SMBs More Bang for Their Buck

By Erin Harrison, Senior Editor


(Editor’s Note: This article refers to a video interview shot in San Jose as part of TMCnet’s “On the Road” video series. To view the entire library of videos from Road Shows and other industry shows, as well as product demos and interviews in our in-house studio, visit the TMCnet Videos home page)


As part of TMCnet’s “On the Road” video series, TMC’s (News - Alert) CEO Rich Tehrani interviewed Debbie Jo Severin, chief marketing officer of 8X8, a hosted unified communications company.

As Severin explained, in recent years the company has grown from a smaller IP communications provider, offering hosted services for small businesses, to a full unified communications company.

In January, the company launched Virtual Office Pro, a UC service that sits on top of 8X8’s hosted PBX (News - Alert) offering, which includes some key features for the company including:  Virtual Meeting, a Web conferencing service; electronic fax; and call recording, the No. 1 feature customers were asking for, according to Severin.

The software application update, available in the Apple iTunes app store for iPhone and iPod Touch models, comes after Apple removed restrictions that prevented Voice over Internet Protocol applications from running on 3G networks.

Virtual Office Pro allows iPhone/iPod Touch users to take their office extension with their smartphone.

“That really just took us from just being thought of as a telephone company, but to a full unified communications type of offering,” she said. Severin added that the application will be functional with Android (News - Alert) and Blackberry later this year. The Virtual Office package is well-priced and goes for $49.99.

“Many of those offerings cost that alone, so now they are packaged together,” she explained. “It sits on a portal… You essentially look at your computer and now you’ve got your telephone and all the communication services are embedded into that portal.”

The service allows users to check voicemail, look at faxes, and has a soft phone – so for a remote employee, he or she can use their computer as a telephone.

How important are new features in relation to 8X8’s growth?

Severin explained: “You have some options if you are a really small, SoHo type of business with one or two lines. But then there are larger options for the enterprise customer – and those companies with 15 to 100 employees, where  you’ve been stacked with really expensive hardware solutions or less feature-rich key systems. We offer multiple auto-attendants that you can weave together, call queuing, and of course our toll-free options. You can look like a really big company even if you are a company of only 25 employees,” she said. “It gives a smaller business a lot of feature functionality.”

And it is that small and medium-sized business that has become 8X8’s sweet spot.

Severin said the company’s average customer size in terms of service is 10.4 services, a steady increase year-over-year.

She said that market conditions of small SoHo businesses entwined with the needs of the large enterprise using IP PBXs has given way to more SMBs entrusting their communications services to another hosted offering. “It’s a great value prop,” Severin said.

Announced in May, 8X8 bought managed hosting company Central Host, Inc., a Los Gatos-Calif.-based company providing managed hosting services and cloud-based computing solutions to business customers.

Bryan Martin, chairman and CEO of 8x8 (News - Alert), Inc. said that adding a managed hosting and cloud computing services to its business service offerings is an ideal extension of its current business.

In other recent 8x8 news, posting its fifth consecutive profitable quarter, business communications provider 8x8 Inc. recently announced its financial operating results for the first quarter of fiscal 2010, which ended June 30.

Gross margin increased to 68 percent in the first quarter of fiscal 2011 compared to 66 percent in the same period of fiscal 2010. Net income for the first quarter of fiscal 2011 was $1 million, or $0.02 per share, compared sequentially to net income of $1.1 million, or $0.02 per share, for the previous quarter and $414,000 or $0.01 per share, for the same period last year. 

“In May 2010, we brought on new business customers for the company’s managed hosting services, and see a growing pipeline of new prospects for these services based on the number of outstanding quotes for managed hosting and cloud-based computing services,” said Bryan Martin, CEO and chairman of the board of 8X8.

Martin attributed 8X8’s growth in part to the company’s enterprise sales team that was assembled earlier this year to bring larger SMB and government customers on board while creating the processes and procedures necessary to win and maintain that business. 

For more on this interview, check out the video below:

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Erin Harrison is a senior editor with TMCnet, primarily covering telecom expense management, politics and technology and Web 2.0. She serves as senior editor for TMC's print publications, including "Internet Telephony (News - Alert)", "Customer Interaction Solutions", "Unified Communications" and "NGN" magazines. Erin also oversees production of TMCnet's weekly iPhone e-Newsletter. To read more of Erin's articles, please visit her columnist page.

Edited by Erin Harrison








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