Geotel provides Enterprise wide Call Centre Solutions.

In case you don't know about Geotel, I thought it a good idea to collect some of the recent press releases issued at the ICCM 98 Conference in Denver, Co USA. Compared with the other Vendors catering to the Enterprise ( read large organisations) GeoTel is quite small, but growing rapidly. Especially I suspect we will be seeing Government Agencies moving away from Centrix based solutions and claiming ownership of their call routing system & network which translates into significant lower operating call costs, but higher up front investments. So get to know Geotel, by reading its own releases. Be warned it is a long document and its not a research report, but simply a report by Datamonitor based on what GeoTel has told . So it is GeoTel's own story, but a fascinating view of a Vendor at the leading Edge of Call Centre Technology.

Niels Kjellerup Editor. September 5th 1998.

Note : Cisco Systems bought Geotel in 1999 and has since integrated the operation into Cisco Systems. 

Competitor Brief, August 1998

Call Centres and CTI - The GeoTel Communications Corporation

1. Introduction and disclaimer Datamonitor

2. GeoTels view on Hot Market Topics.

3. Corporate Overview

4. Structural and Tactical Analysis

4a. Products & Partnerships

5. Competitive Positioning

6. Financials

7. SWOT

8. Summary


 

Introduction

Caveat The facts of this publication are believed to be correct at the time of publication but cannot be guaranteed. Datamonitor can accept no responsibility for any actions based upon information which is subsequently proven to be incorrect.

Copyright Published by Datamonitor Plc.106 Baker Street. London W1M 1LA.Telephone: 0171 316 0001 Fax: 0171 316 0002 Website: www.datamonitor.com. Datamonitor Plc. All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Datamonitor Plc. (Back to Overview)

 


GEOTEL’S VIEW ON HOT MARKET TOPICS

GeoTel believes that the addressable market for intelligent routing solutions is $5bn

GeoTel’s initial focus was on the provision of CTI software solutions to the problem of integrating call centre activities across an enterprise. It has now broadened its product portfolio to exploit the market opportunity for intelligent call routing at both the site and the network level.

GeoTel believes the addressable market for intelligent call routing at all levels is in the region over $5bn.

In GeoTel’s opinion the size and distribution of an enterprise’s call centre sites should be determined by business imperatives rather than technological factors.

GeoTel perceives a slow blurring between network and premise based call centre functionality.

The market for virtual call centres is restricted by business issues rather than the absence of viable technological solutions.

INTRODUCTION

The general recognition of customer service as a critical component of business strategy has underpinned the continuing development of the call centre market. As call centres become more common place they have moved from being competitive differentiators to become business necessities. This has meant that call centre operators have had to look for new ways to increase the customer service levels attainable from their call centres. The provision of CTI software solutions provides a way of enhancing customer service levels by enabling companies to leverage all the information available from the call centre systems and applications into the customer interaction process.

At the network service provider level the arrival of intelligent networks has meant that information contained within the PSTN such as caller line ID and the dialled number has also become available to call centres to further enhance their call distribution between call centre sites and agents. Intelligent networks also provide the opportunity to move increasing levels of call centre functionality into the PSTN itself as part of network service providers ( NSPs) overall Centrex provision. Datamonitor believes that this enhanced level of Centrex functionality coupled with the increased pressure on prices, resulting from liberalisation of the telecommunication markets, will accelerate the development of the lower end of both the formal, and the informal, call centre market.

The provision of CTI software solutions has attracted both the attention of traditional call centre equipment vendors and a number of new entrants from the IT world. GeoTel is one of the few CTI software solution vendors that have attempted to address the market at the network, enterprise and site levels of the call centre hierarchy. (Back to Overview)

 


CORPORATE OVERVIEW

GeoTel Communications Corporation is a CTI software solution provider which specialises in intelligent call routing for the call centre market. As with other companies in this area GeoTel provides software packages which allow the real time data held within premise call centre systems to be utilised in call routing decisions. This can provide significant efficiency gains both in terms of improved response time and overall levels of customer service. What differentiates GeoTel from other CTI vendors is that they have actively sought not only to leverage data contained within call centre systems but also the information available from network service providers. Its approach has been to move call distribution upstream which presents NSPs the opportunity to enhance their value added telecommunication offerings to call centre customers.

GeoTel status 1997

Revenue 1997: US$ 18.6 m. Net Income 1997: 6.3m.No of Employees 195.

Mission: To be the leading provider of customer interaction software solutions for mssion critical Call centre applications.

GeoTel first entered the market with its Intelligent Call Router ( ICR) product in 1995. This initial offering was primarily directed at Fortune 500 companies with multi-site call centre operations which required enterprise wide computer telephony integration. Since then it has expanded its product range to exploit the market for intelligent call routing to both the NSP and single site call centre level.

Despite the volatility of the sector as a whole, GeoTel has achieved consistent and respectable growth. In 1997 it reported a net income of $6.3m on revenues of $18.6m. GeoTel products now supports 351 sites up from 114 sites at the end of 1996. With the introduction of its Enterprise Web product the company has begun to address the growing market trend towards multimedia customer interaction centres from solely voice orientated call centres. GeoTel has also continued to develop services as a component in its revenue mix. In 1997 services represented about a fifth of total revenues.

GeoTel’s stated mission is ‘to become the leading provider of customer-interaction software solutions for mission critical call centre applications". Its strategy is to exploit the recognition of the call centre as a source of competitive advantage not only through enhanced customer service but also as a primary customer interface through which business can be developed.

Though still a relatively small and young company GeoTel has expanded its customer base well beyond its domestic market in the US. It has made significant sales to blue chip companies in Europe and Australasia, a number of which it has also formed strategic partnerships with.

(Back to Overview)

 


STRUCTURAL AND TACTICAL ANALYSIS

GeoTel offers an expanding array of products. The product range is built around their flagship offering the ICR. The ICR was primarily aimed at the large multi-site call centre operators looking to integrate their systems on an enterprise wide basis. GeoTel has now developed the ICR platform for application at the network and single site level with the development of the Network ICR and Site ICR respectively. This has given GeoTel a presence at all levels of the call centre market for CT solutions. In particular its product offering to NSPs differentiates it from other software CT vendors whose focus has primarily been on the call centres themselves. From its inception GeoTel has striven to be an open architecture vendor and endeavoured to ensure its products are compatible with the call centre hardware currently in use. As table 1 indicates GeoTel’s platform is compatible with the major call centre equipment vendors’ products.

Though still a small company, the fact that GeoTel’s products support over 300 sites indicates that it has managed to overcome the ‘early adopter’ stage of technological acceptance and is developing a growing mind share within the industry as a whole. This process will be greatly facilitated as the influence of its key strategic partners comes into full effect.

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Table 1: GeoTel Supported Call Centre Platforms

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Platform Type Company Specific Product

(if applicable)

ACD/PBX Aspect CallCentre

Lucent Definity ECS2, G2

Nortel Meridian, DMS100

Rockwell Galaxy, Spectrum

Siemens HICOM 300E,

Rolm 9751 CBX

Alcatel

NEC

IVR/VRU Microlog

Brite Voice Systems

Edify

IBM Direct Talk 6000

InterVoice

Lucent

Periphonics

Tandem

Voicetek Generations

Source: Datamonitor, Company Information

(Back to Overview)

 


Products

Intelligent CallRouter

The principle function of the ICR is to integrate agent groups distributed over multiple sites, working from different ACDs, into one virtual team. This is achieved by the introduction of pre-routing. Pre-routing occurs at the enterprise level and is achieved by the ICR communicating over data links with both the premise call centre equipment and the public switched network’s intelligent network.

By leveraging the information available from the call centre’s own systems concerning agent availability, IVR status and queue lengths, with information available from the PSTN, such as caller line ID and the dialled number, then applying a user defined routing script, the ICR is able to make call-by-call routing decisions and pass the appropriate instructions to the service control point within the IN.

The information available for routing decision can be furthered refined by connecting the ICR to an enterprise level customer database and/or IVR. This in effect allows the caller to be routed to a specific agent or agent group which has the optimal skill set to handle the call. Calls are in effect routed to the optimum answering resource available across an enterprise’s call centre operations.

The ICR also enables post-routing of calls. Post-routing of calls occurs when a call which has already been connected to one of a call centre’s call centre equipment (ACD, PBX or IVR) requires re-routing to a different location. The peripheral sends a routing request to the ICR which then applies the user defined routing script in order to route the call to the appropriate answering resource. Since the ICR is linked to the PSTN IN the potential exists to re-route the call at the network level avoiding the need to use both inbound and outbound lines in order to accommodate a single caller.

As has been identified, GeoTel has sought to ensure that their equipment range, while an open architecture platform, can also support a heterogeneous multi-vendor environment. The variety of call centre’s equipment supported has already been noted. Of equal importance for enterprise level CTI solutions is the ability to accommodate customers who may use different carriers at different sites. To Datamonitor’s knowledge GeoTel’s ICR is the only enterprise-wide call distribution system that has met the certification standards of AT&T, Unisource, MCI and Sprint. The certification of GeoTel’s platforms in Europe by BT and France Telecom as well as Optus Communications and Telecom New Zealand in Australasia indicate that GeoTel is well placed to gain Global acceptance.

In addition to its ICR product GeoTel also offers a number of options including Enterprise CTI and Enterprise IVR software packages. The CTI package acts as an interface between the ICR and the call centre’s premise server or desktop applications as well as enabling third party control of calls. This allows agents to conference or divert calls. Enterprise IVR gives the user the ability to strategically place the IVR either in front of or behind the ACD or to employ network based IVR facilities in order to achieve the optimal routing configuration for incoming calls.

ICR is directed at the higher end of the call centre market. The average system license retails between $0.8m to $1.0m. GeoTel estimates that there are about 3,000 potential applications world-wide providing an addressable market opportunity in the region of $2bn. ICR has been adopted by a number of blue chip organisations including GM Acceptance Corporation, IBM, Compaq and Fidelity. GeoTel is also receiving a significant amount of return business for the ICR.

Network ICR .

Network ICR was developed from the ICR for application within telecommunication networks enabling NSPs to enhance their value added service offering to call centre customers. The arrival of IN technologies has facilitated the introduction of such services as non-geographic numbers and virtual private networks. However, call distribution across several locations is usually restricted to predetermined factors such as time of day or percent allocation held at service control points. These routing instructions, in many instances, can be altered remotely by customers themselves but real time call control does not extend beyond the network. The real time interaction between customer premise systems and the network IN that the ICR platform enables has obvious benefits in terms of call distribution for call centre customers.

As the original ICR platform in effect bridged the interactive gap between premise and network data sources for call routing, a natural extension of the GeoTel’s customer base was to target the NSPs themselves. The Network ICR can be used as an IN SCP or as an adjunct to an existing SCP. The exploitation of caller information available from the network itself with data held within call centre’s premise systems means the NSP can enhance it’s value added service offering to customers. The enhancements include:

Pre-routing and post-routing at the network level;

Network IVR integration - routing based on customer responses to an IVR in the network;

Database lookup routing at a network level - provision of basic translation, dealer location, call origination and customer profile-based routing information from internal or external databases.

The Network ICR also demonstrates a high degree of scalability with the flexibility to expand from its initial configuration to serve 200 call centres receiving 100 calls per second to handle up to 1,600 call centres receiving up to 600 calls per second. As at the enterprise level, GeoTel offer Network CTI and IVR packages.

The major selling point of moving intelligent call routing into the network is that potential call centre customers pay for a service rather than having to take the risk of making substantial investments in premise equipment. However, in Datamonitor’s opinion large call centre operations will retain a preference for premise platforms; network based intelligent call routing being used as a compliment to rather than a substitute for proprietary equipment. Nevertheless the enhanced functionality that NSPs can offer as a result of implementing intelligent call routing at the network level is likely to attract and retain large sophisticated customers. Datamonitor also believes that network based call centre functionality will accelerate the development of the lower end of the call centre market (100 seats and less) as well as addressing the underdeveloped market for informal call centres and customer interaction solution provision among SMEs.

Though the Network ICR provides a much smaller market opportunity for GeoTel compared to the ICR, estimated at $200m, its acceptance by NSPs can only assist in developing GeoTel’s brand awareness and reputation generally throughout the industry. Many of GeoTel’s NSP customers have also become licensed distributors of their other products. GeoTel estimates there to be a potential for 75 Network ICR applications world-wide among NSPs at all levels; inter-exchange carriers, international carriers and PTTs.

GeoTel Enterprise Web

In June 1998 GeoTel announced the introduction of Enterprise Web to its product portfolio. This extended GeoTel’s CTI solutions to include the integration of the call centre web-server. As with other web integrating products Enterprise Web enables the ‘call me back’ &‘talk to an agent’ concept and collaborative web browsing features. Datamonitor believes that this is an important addition to GeoTel’s existing products and demonstrates a recognition of the growing trend toward multi-media customer interaction centre from voice orientated call centres.

Strategic Partnerships and Distribution Channels

GeoTel employs a combination of a direct sales force and strategic partners as their key distribution channels. When existing call centres come to the decision that they need to integrate their premise systems, Datamonitor believes that they are likely to contact the original equipment providers, system integrators or their network service provider for advice. Datamonitor recognises the development of strategic partnerships with these company types as critical success factors for those firms operating in the CTI market. Despite its relative youth compared to the other major players in the general CTI market GeoTel already has a number of partners with prominent market presence in their own fields.

Equipment vendors

Both Hewlett-Packard and Lucent Technologies have world-wide marketing and distribution agreements with GeoTel. Hewlett Packard, as one of the largest Global providers of IT products and services and Lucent, as the one of the world’s leading telecommunications system manufacturers and designers provide GeoTel with the potential of extensive exposure to customers across sectors and revenue levels.

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Table 2: GeoTel Strategic Partners

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Equipment Vendors:

Hewlett Packard Licensed Distributor

Lucent Technologies Licensed Distributor Aspect Supported Platforms

Nortel Supported Platforms

Rockwell Supported Platforms

Siemens Supported Platforms

Brite Voice Systems Supported Platforms

Edify Supported Platforms

IBM Supported Platforms

InterVoice Supported Platforms

Periphonics Supported Platforms

Voicetek Supported Platforms

Network Service Providers:

BT Licensed Distributor

AT&T Licensed Distributor

Unisource Licensed Distributor

Sprint Telecommunications Licensed Distributor

MCI Telecommunications Licensed Distributor

Optus Communications Licensed Distributor

Offnet Licensed Distributor

Global One Supported Carrier

France Telecom Supported Carrier

Telecom New Zealand Supported Carrier

Systems Integrators:

AnswerThink, Activox, Unisys, TSC, Day Com, Carnegie Group

Source: Datamonitor

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Network Service Providers

Given that the key selling point of GeoTel’s ICR is the fact that it leveraged information available from PSTNs and call centre premise systems, NSPs are perhaps the most natural candidates as strategic partners. An NSP’s selection of the GeoTel ICR package is in itself a strong endorsement of the company. Of particular note is AT&T Solutions call centre practice’s choice of the ICR software as the platform from which it will develop its Resource Manager product. That accompanied by the leveraging of the extensive sales resources that telecommunications companies have can only deepen GeoTel’s competitive position.

The list of existing partners also places GeoTel well to be adopted by telecommunication global alliances all of which have at least one partner represented. In geographical terms the NSPs listed are all key players in their regional, as well as domestic, markets. The weakest representation in terms of strategic partners is for the Asian element of the triad. However, the Australian Optus Communications coupled with partnerships with the equipment vendors noted above should act as a sufficient bridgehead into this market.

Systems Integrators

GeoTel has only recently established a number strategic relationship with a number of systems integrators. Datamonitor recognise systems integrators as key strategic partners for companies operating in the CTI market. GeoTel has fewer systems integrators as partners than other better established CTI software vendors, it argues that it has taken a prudent approach to selecting system integrator partners. Nevertheless, Datamonitor believes that systems integrators are still under represented in GeoTel’s strategic partnership mix in markets outside the US. GeoTel says that it is actively seeking other potential partners in this area. (Back to Overview)

 


COMPETITIVE POSITIONING

The CTI solutions market has attracted a lot of interest from vendors from both the IT and telephony world as well as a number of small new entrant software vendors. In general terms these companies have targeted their products at the site and enterprise level. In general vendors have approached the market at the call centre level and this has been reflected in the nature of the solutions they provide. By specifically aiming to execute call routing within the PSTN GeoTel has taken a different approach to the general market place coming at the market from a relatively upstream position. One of the potential problems with this position is that it encroaches on territory which NSPs might consider their own. However, GeoTel’s evident success in attracting major telecommunication service providers as strategic partners is probably the best way of countering this threat.

While many other CTI software solutions accommodate the presentation of information from the network such as CLI and dialled number identification, to Datamonitor’s knowledge few have approached the market with an intelligent call distribution solution that actually interacts with intelligent networks in the PSTN. This distinctive aspect of GeoTel’s product range makes it difficult to find a competitor that directly competes with them at all levels. GeoTel says that at the network level the main barrier to sales is customer apathy rather than a competitive battle with other tenders. Having said that other CTI software vendors are becoming increasingly interested in addressing the network level CTI market, as this market has been made more attractive by NSPs drive to provide a comprehensive range of value added telecommunication services in the wake market liberalisation and increased competition. One such firm is Genesys which is perhaps best placed to contest the CTI markets that GeoTel addresses.

 

GeoTel and Genesys Competitive Comparison

Genesys has recently introduced its own network level CTI solution range; Network Call Centre Application Suite, Centrex Call Centre Suite and the Enterprise Directed Call Centre Application Suite. Genesys was an early entrant to the CTI market and quickly recognised three major trends in the market:

soft ACDs: Genesys leveraged its software skills to create one of the earliest soft ACDs;

multi-vendor market place: Genesys saw an opening in the traditional vendor group and exploited it;

multiple distribution channels: early in its development Genesys recognised the importance of non-traditional market outlets like resellers and systems integrators.

Genesys is now well established as a CTI software solutions vendor. Genesys’ longer period in the market place compared with GeoTel has enabled it to generate greater brand awareness and mind share for site level and in some respects its enterprise level solutions. However, Datamonitor believes that GeoTel has developed a greater mind share among NSPs which, given the bias of their product range, amounts to a competitive advantage.

Both firms have developed a respectable list of strategic partners that cover the major company types discussed previously. Genesys has a more extensive list which is to be expected given its earlier entry to this market. Its main weakness in this area is that it has only established strategic partnerships with two NSPs; MCI and Bell South.

The provision of services is seen as an important aspect of development in the CTI market place. This is because it provides the opportunity to deepen customer lock-in. The revenue mix of these two companies is equitable with service revenues sitting at between 15% and 21%.

Overall Datamonitor’s opinion is that Genesys is in a better competitive position, primarily because it has had longer to develop its market position, establish a more extensive list of partners and has a broader product range that extends beyond the call centre market. However, it is Datamonitor’s belief that GeoTel is extremely well placed to grow in the specific markets which it has chosen to address. GeoTel should be able bridge the gap between itself and Genesys over the next 3-5 years if it continues to broaden its product offering. The following figure summarises the competitive position of Genesys and GeoTel in the CTI solutions market place. (Back to Overview)

 


FINANCIALS

GeoTel reported total revenues for the second quarter 1998 of $10m. This is a promising start to the year and has surpassed market expectations. It builds on a solid performance in 1997 during which GeoTel generated a net income of $6.3m on revenues of $18.6m, up from a net income of $0.8m from revenues of $9.1m in 1996. The company has shown a consistent improvement to its net margins which increased from 8.6% for 1996 to 15.5% in 1997. Expectations are that GeoTel’s net margin will be in excess of 18% for 1998.

GeoTel has continued to develop its service’s offering as a revenue stream. In the first quarter of 1996 services represented 6% of revenues at $0.12m. Service revenues have now grown to fall between 19% and 22% of total quarterly revenues, representing $1.05m for Q4 1997.

GeoTel has continued to develop a good reputation in financial circles because of the high level of revenue visibility, not an attribute that is generally associated with relatively young high technology companies. The financial markets confidence in both GeoTel’s financial and operational management is reflected in the relatively high multiple the company’s shares continue to sell at.

(Back to Overview)


SWOT

Strengths

Open architecture products accompanied by a pro-active attitude to ensuring compatibility with existing call centre equipment and systems.

A growing reputation for high levels of quality and customer service.

Strong representation of major NSPs among its growing list of strategic partners.

Good financial performance for a young high tech company.

Strong position in some market sectors

Weaknesses

Limited geographical coverage of systems integrators among its list of strategic partners.

General brand awareness needs to be developed.

Product portfolio while expanding is still comparatively narrow, focusing primarily on intelligent call routing.

Opportunities

Competitive pricing, particularly for the Site ICR, should enable it to gain a significant market share even in this crowded market segments.

Well placed to exploit the huge potential Centrex call centre market which Datamonitor believes will become significant in the short to medium term

Threats

GeoTel’s upstream approach to the market place pitches it against the financial resources of NSPs who may seek to develop their own network level solutions.

Larger and more established CTI vendors are now looking to more fully address the network and enterprise CTI markets. (Back to Overview)

SUMMARY

It is difficult not to be impressed with GeoTel. The strategic positioning of its products places it well to exploit both the growing market for CTI solutions in general and the trend towards enhanced value added service provision from NSPs. The introduction of the Site ICR and Enterprise Web has almost doubled their addressable market and given them leverage to participate in the general move to multimedia customer interaction centres respectively.

However, in order to continue their impressive growth Datamonitor believes they will have to develop their list of strategic partners and distribution channels. Its strategic relationship with leading NSPs is likely to provide it with a route through which to exploit the burgeoning market for CTI functionality outside the traditional call centre market. GeoTel will also have to broaden its product portfolio if they are to effectively contest the wider CTI market against the more established competitors. Nevertheless, Datamonitor believes GeoTel is one of the CTI solution vendors to watch into the next millennium.

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