[This interview first appeared on NoJitter.com on Jan 27, 2015]
When Steve Kokinos, CEO of Thinking Phone Networks, founded the unified communications as a service (UCaaS) provider in 2006, he did so with the vision of using communications to automate processes and uncover buried intelligence. At the time he observed: “Communications systems are the only applications that truly have 100% penetration across the entire enterprise.” Lots has changed in the ensuing 9 years, so I caught up with Kokinos recently for an update on his vision and a status report on the company.
ThinkingPhones runs on an internally developed platform, delivering voice, video, mobility, presence/IM, messaging, collaboration, contact center, and communications analytics applications as cloud services. It is doing well, reporting revenue growth of more than 100% each year since 2012 and having recently raised $56.7 million in new funding to help ensure the trend continues. (This brings total funding at the Cambridge, Mass., company to approximately $89 million.)
Kokinos tells me that with this new investment ThinkingPhones will likely be able to double its current headcount, which sits around 250 today, by the end of the year. Additionally, the company intends to increase its investments in product development and international expansion, he says.
The UCaaS sector is crowded, but unlike the majority of the providers, ThinkingPhones is focused mostly on enterprise customers rather than small and medium-sized businesses (SMB). It primarily sells its services through an indirect channel.
What follows is an excerpt from our conversation. Read on for Kokinos’ thoughts on the importance of the cloud, shifting enterprise communications requirements, the mobility mandate, and more.
DM: You started ThinkingPhones ahead of the cloud’s rise. Assuming you think ThinkingPhones is still ahead of the pack, tell me how.
Kokinos: The central theme we see in modern enterprise communications is the move toward mobile-centricity. End users want the same experience with work apps that they enjoy in their personal lives. Taking inspiration from that and delivering on messaging both internally and externally, having a great immersive experience with apps like Salesforce and Google Apps, and using analytics to help drive enterprise visibility in new directions are all critically important.
At the same time, enterprises require parity with legacy systems. While legacy hardware and software may not serve end-user desires, they do represent years, if not decades, of embedded business processes that dictate how companies interact with their customers and partners. Getting that right is critical, and we’re the only ones in the cloud who can do that while still delivering a fresh, modern experience.
DM: Many telecom firms are moving away from “Tel” in their names. Explain to me the name ThinkingPhones and which part of the name you consider more important.
Kokinos: Making enterprise communications more intelligent and intuitive, and helping businesses increase their agility is at the absolute core of what we do. Modern enterprise communications should enable new ways of interacting and addressing problems through thoughtful actions — hence the “Thinking” portion of our moniker.
And while the “Phones” part of our name proves that we never lose sight of the fact that voice communications is central to our mission, we want to make it clear that what we do isn’t about traditional telephony. The fact that people have a true emotional connection to their smartphones and tablets necessitates a new way of thinking about how companies and customers connect. The future of business communications is completely mobile and dynamic based on the context and location of each interaction. Drawing on that trend is a real positive from our viewpoint.
DM: The majority of UCaaS providers target the SMB market. ThinkingPhones has always been more focused on larger accounts. What is the average size customer for ThinkingPhones, and is that average growing or shrinking?
Kokinos: From the beginning, we felt there was a lack of emphasis on larger enterprises in the UCaaS market. When you dig into why, it has a lot to do with the complexity and breadth of requirements. We built our platform from the ground up to handle a wide range of traditional voice requirements (complex IVRs, contact center functionality, parking, paging, administrative controls) while at the same time delivering a modern, mobile-focused experience that brings communications into today’s cloud ecosystem.
We’ve been seeing customer sizes trending upwards pretty quickly — the average today is about 1,000 users but we’re seeing growing demand with larger enterprises consisting of tens of thousands of users.
DM: At first, the discussion was cloud vs. premises — but over the past few years, many of the premises-based vendors have added cloud services and some even now offer hybrid models. Have you considered getting into premises equipment either directly or through a partnership?
Kokinos: No. We’re 100% committed to the cloud model and feel strongly that it’s the best way to bring enterprise communications to the next level. We believe that all software and service will eventually be delivered via the cloud, and communications is simply the next logical part of the organization to make the transition. It’s … where we provide the most value to our customers.
One of our key value propositions is being able to work with and even extend customers’ existing workflows on our platform. It is one of the reasons we are growing at more than 100% year over year and expect to continue that pace in 2015 and beyond.
DM: How many unique versions — major releases and minor updates — of your core service did your customers experience in 2014?
Kokinos: Since we are a cloud services vendor, we are continually releasing updates to our customers, not necessarily daily but certainly multiple times a week. There’s a pace to cloud development that simply doesn’t exist in a premises-based world, and our customers get to enjoy the benefit of that.
At the same time, 4 times a year we have larger “seasonal” releases that we use to target more substantive updates and release new products or functionality. In 2014 mobile was a main theme, rolling out new mobile clients for iOS and Android, bringing SMS to the enterprise via both mobile and the desktop, and really delivering on a fresh, modern end-user experience. In addition we’ve spent a lot of time expanding our integration with applications like Salesforce, Google, and others. And all of that ties back to our analytics platform, allowing cross-application data correlation and delivery of great visibility that is simply impossible via traditional systems.
DM: How have your customer demographics changed over the past several years?
Kokinos: The primary shift we noticed in 2014 was the amount of inbound interest from much larger companies all the way up to the Fortune 1000. We attribute this change not only to our position as a leader in the Gartner Magic Quadrant for UCaaS, but also to a general change in enterprise confidence in cloud services’ capability to deliver real-time communications.
We’re also seeing a real trend away from traditional desk phones toward people using a work persona on their mobile devices for their work communications.
DM: Is ThinkingPhones considering integration with Microsoft Office 365 or Google Apps?
Kokinos: Absolutely. Our cloud service platform is a natural fit for other cloud services like Office 365. Becoming part of the apps people spend their day in is a key way we make communications integral to their overall cloud experience.
Today, we have integration with Google Apps, Lync, and Salesforce, among others. Office 365 is something we’ll have support for in the first half of 2015.
DM: ThinkingPhones offers customers visibility with UC analytics. How do they use the intelligence — and does ThinkingPhones use the analytics, too?
Kokinos: This question might be better answered with a sales example. We use our analytics solution to help maximize the potential of our growing sales organization. Once you integrate your communications service data with a CRM app like Salesforce.com, you can easily track and rank the productivity of an individual rep more efficiently.
For example, you can create a visual picture of the highest-value sales reps on your team, cross-referencing their closed business with the communications activity involved in getting there. You can then use this blueprint for success to predict the productivity of new team members early on and take the necessary actions to either reward or correct any issues.
At the same time analytics are something we use internally to help us better drive product direction and overall service quality. It’s a game-changer all around.