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The run time is 47 minutes.Additionally the full transcript is below. To distinguish between us I've indented Jonathan.
Good morning, Jonathan, how are you?
Good morning, Lee, I'm great. How are you?
I'm actually very bad today. I slept twelve hours. That means I've only needed two coffees today, and normally, I need six in the morning to kind of jump-start. Two coffees to begin the day is not very much.
My first question to you, it seems that people at Voxeo have two letter names, like R.J., and I see people referencing you as J.T. Are you Jonathan, or are you J.T.?
Either one, actually. I'm not personally working on a strong brand, so I have people who call me J.T. because my name is Jonathan Taylor. I have people who call me J.R. because I'm Jonathan Robert. I have people who call me Jonathan and some call me John. It goes back to my career and a couple of places I've worked over the last twenty years, where there were other Johns and Jonathans. I ended up being a J.R. at one company and a J.T. at another company.
So, it's not like an internal Voxeo policy to shorten everybody down to two letters? [Laughter]
No, it might be a de fact policy that I'm not aware of, but not a formal policy. R.J. and myself and a couple of other people - it's just one of those cultural things that happen and you never really understand why it did.
Luckily, I've only got a three character name and it's pretty monosyllable. People just leave it as Lee. [Laughs]
Not "La" [laughs]
It's easy to spell, as well.
I wanted to interview you because people kept telling me that you have an interesting background and we have never spoken. I know R.J. I know Dan York, from Voxeo, both of them well, but you and I have never spoken. Yet, people kept saying, "You need to speak to Jonathan from Voxeo. He has an interesting background". They never elaborated on that interesting background, and I don't know if you're able to on record, either. At least, I'll try and ask you somewhat about your background and how you ended up in the communications space.
There are actually a couple of things that led me to the communications space. First off, my father was a life-long AT&T employee, grew up in the Bell system, started off literally digging ditches and running phone lines. I ended up helping design a large part of their digital signaling network
I would go to the office. It was intriguing. It was the first place I saw computers. It was interesting to see behind the scenes when you would use the phone. There is all this infrastructure and machinery that, especially as a young kid, was immensely impressive. That was the first part of it.
The second part goes to the mid-eighties when a couple of things happened. First off, I had my first computer, a modem, and I was really into bulletin boards. At the same time, you had the competitive carriers like MCI and Sprint that were really just starting to get to the market in the U.S. I had this big issue, which was like a thirteen or fourteen-year old kid, I wanted to call these BBS's but a lot of the best BBS's were a long-distance call, in California or wherever they might be. Of course, this was back when my family would say, "We're going to call your grandmother, but let's only talk for a couple of minutes". Long distance was expensive. [Laughter]
It's the same sentiment here. This is exactly how I got interested in communications, needing to download software. The software was always in the States, and I'm being brought up in the U.K. "No way, son, can you call America for an hour to download software" [Laughs]. You were being forced, by the telecom company, to be innovative. [Laughs] Tell me about your innovation.
I guess times haven't changed; carriers force innovation with their stagnant behavior. This is when MCI and Sprint were first around. This was before you had the capability to pick your carrier. You had to actually dial local access codes in each market, and then enter your account code, and then the number you wanted to dial.
These guys made the extremely silly mistake, I guess for customer convenience, of using 6-digit account codes, which were hackable. I wrote a little program that would call the local access number, and just in sequence, go through access codes, and then try to call a number of a BBS. If the modem got a carrier, it knew that the access code worked and if it didn't get a carrier, the access code didn't work and it would move on and try the next one. I left this running on one of my computers, for a weekend one time, probably in 1985. Within a couple of days, I had 800 access numbers. [Laughs]
And then you went back to the bulletin board and uploaded your logs to share with everybody else.
I shared them with a couple of close friends that I had never met, but for online. I was able to call and get the software that I wanted. There were legal ambiguities, to say the least. I was a young kid and just looking to learn a lot about BBS's and interact with people. Unfortunately, one of the people that was in my circle took it too far. I had a visit from the Secret Service. It all ended up fine [laughs]. There was no big problem and no criminal history or record or anything like that. They mostly wanted to know how we did it. One guy that took it too far did get in trouble. It was a very interesting experience.
What age were you, back then? I was kind of fifteen when it was what we call "war dialing". What age were you, back then?
I was fourteen or fifteen-years old.
We were probably doing the same things on opposite sides of the ocean. [Laughter]
Yeah, and then at fifteen, I was reading the CCITT specs, courtesy of PHRACK, which was later to go on and form the basis of my career. You went on to form Voxeo, which is very well respected with developers. Can you tell me something about the origins of Voxeo?
I'll give you a bit of the bigger contextual background. After these hacking, phreaking incidents and timeframe, I continued to pursue my interest in computers, although I sort of got out of the telephony side of things for a while. I ended up getting a job as an engineer, in high school, working for a storage technology company called Columbia Data Products. Basically, with Columbia Data Products, I wrote what were really the first controller in software to connect SCSI controller cards up to PC's.
When I got out of high school, I had this great job. I said, "I can go to college, any time. I have this great job now, so let me just run with this". I didn't go to college. I continued to work at Columbia Data Products. In a very youthful way, after a year, I felt I had outgrown Columbia Data Products.
I realized I had ideas, which were larger than my personal ability to execute. As a nineteen-year old kid, I started my own company and I learned quickly that I was no good at running a company. I went from fifteen people back down to just me.
Ultimately, I figured out how to basically run a business, and I slowly built it back up. That company was what essentially what we call now a VAR, value added reseller. I bought a lot of equipment and added services and some custom software. I shipped them to customers or installed them for customers.
I had two markets, basically, that I sold to. One was sort of city and county government in Florida. I had just gotten some in's from friends and associates through the years. The second was actually back to my origins, the BBS community. There was show, at the time, called One BBS Con, which was the bulletin board operators' annual trade show. I had a booth there and was selling storage equipment and Novell Netware LAN's for large BBS's. At the time...
Novell netware LANS, that takes us back a little, too. [laughs]
At the time, most BBS software was not multi-line, suffering on DOS, largely. To build a large BBS was like thirty lines. You would actually get thirty computers with one modem on each computer and connect them together with Novell netware.
I was at this trade show and I had encouraged all of my customers to get on email very early, again in part, because of my father's work at AT&T. I was on the Internet very early on. Also, in the mid-eighties, I had encouraged my customers to get on email, too. What I would do is I offered my customers a 5% discount if they did all their ordering and most of their interaction with me via email. I got a bunch of people at city and county governments and BBS operators to connect to Internet email so they could do orders that way with me.
I'm at One BBS Con, and this was like 1994 or 1995. The timing was such that it was the end of the fiscal year for a lot of the county governments, so they needed to order a bunch of stuff. I'm at One BBS Con and amazingly, at One BBS Con, in 1994, there was no Internet access. I couldn't get to my email. Normally, I would go get my notebook and dial in. I'm at the booth, so people are constantly coming up to ask questions. I thought, "Oh my God, what am I going to do?"
I called a friend of mine and said, "Here is my POP 3 username and password. Could you login real quickly, and check my email? Just read it to me so I can find out what orders are in there." [Laughter]
It was very mechanized. [Laughs]
Right, "Can you check my email for me so I can read it and find out what my orders are and I'll call the distributors and get the orders out". He did that and I hung up the call and thought, afterwards, "As more and more people start using email, a service like that is going to become very important," sort of remote access to your email via the phone.
I went through sort of three phases of design in about fifteen minutes. I first thought, "All right, I'm going to build a call center, get all these agents..." [Laughter]
Like Mechanical Turk style, reading it out. [Laughs]
Exactly, that was Unified Messaging 1.0, in my mind, which was call center agents, with a special email client that worked well for thousands of accounts. Then I thought, "People are probably not going to want complete strangers reading through their email. There must be a way you can connect a telephone to a computer".
Phase two, and it was literally sketched out on a napkin. I still have the napkin, somewhere. I was trying to draw how you would wire a POTS phone line into a Sound Blaster card and do ring detection, [Laughs] and I would write software that would drive the Sound Blaster card, have a little ring-detection circuit.
Then I thought, "Somebody must have figured this part out, already. There must be a way you can hook phone lines up to computers without getting Sound Blaster cards and putting some capacitors and different things on there, getting the impedance batch and everything". So I said, "All right, let me do some research".
I knew a guy that had been in the computer telephony industry. I didn't know exactly what he did, but I knew he did stuff with telephony and computers. I asked, "How do you do this?" He said, "There is this whole world called computer telephony, Dialogic cards". We got a copy of Computer Telephony Magazine and ordered a Dialogic card.
So, CTI was new to you?
Everything about computer telephony was completely new. My background had been storage. I had never done anything with the phone except the previous incidents with phreaking and hacking. I said, "We'll get a Dialogic card". We had sort of an API layer over the Dialogic card that came from a company called Stylus Innovation. The product was called Visual Voice. We hacked up this thing with a text to speech engine, where you could call in, enter your account code, it would grab your email, and read it to you.
I started giving friends and associates the phone number to this thing and people loved it. I said, "All right, let's start a company". We started the company and said, "We need to get a voicemail system". We looked at pricing for voicemail systems and I said, "These people are nuts!" That was like $5000.00 for a voicemail system. I have this computer telephony card thing. I'll write a little voicemail thing, too.
Because I didn't know any better, I made a mistake and I put the voicemail into the email server, instead of doing it separately. I say mistake because the company ended up being called IRDG. When we talked to the analysts, they were literally, "No, no, you've done it all wrong. It all needs to be proprietary so you have customer lock in. How are you going to make money unless you can sell the hard drives for four times their actual costs, when people need more storage?"
We accidentally built a unified messaging platform. We had no idea that there was a concept called Unified...
Naivety can sometimes be a good thing, and a clean slate, in your mind.
Yes, definitely, so we built the Unified Messaging Platform. We did voicemail, email, fax, and paging, over the course of about a year and a half. We added all those features. We decided to sell it as an OEM product, and quickly licensed it to guys like Ericsson, Motorola. There was a company in Santa Barbara called Digital Sound, which was a leading voicemail provider for ILECs in the United States. They're now part of Unisys. There was a company in Israel called MediaGate, which was basically the company that the people who started Rederex, which was a competitor to Dialogic, built after they sold Rederex. We licensed technology to a bunch of companies. We ultimately sold it to MediaGate. I worked for MediaGate for years and then I left and took a year off.
I was thinking about what I wanted to do next. I kept thinking back to when we first started developing the phone interface for the IRDG Unified Messaging product. I was remembering, especially as someone not from a computer telephony or telephony background, how unbelievably arcane and difficult it was to get the Dialogic card working right, getting it to work consistently, and then dealing with phone companies to get T1 lines and Wink Start, Loop Start signaling, and DID's and literally all the stuff I had never heard about.
All good telecom stuff.
Right, but I had never heard of before. I would sit down to have conversations with people and I literally had no idea what they were talking about. I would just pretend I did and take notes, and then go home and try to figure it out.
So you were hit with hardcore analog signaling, back then.
Exactly. The other amazing thing is we would go license it to these companies, like Motorola and Ericsson, leaders in telephony communications. We would sell them a system and they would come back and say, "We don't have enough people to get all this stuff configured. Can you fly to these locations and order the lines and install this for us?" I'm sitting there thinking, "How is it that some of the largest companies in telecommunications don't have enough people with enough experience to get all this stuff up and running?" We've been doing telephony for eighteen months, now. Why are we ...
Why are we going to be supplying the bodies? [Laughter]
After I sold the company and was taking a year off, I kept thinking back to that. A business partner of mine that I started IRDC with, John Higgins and I, were literally brainstorming in a room. We put three words on a white board. These are the words that started Voxeo. Those words were "computer telephony sucks". We said, okay, how do we make it not suck?
We roughly divided the problem into two domains. First, it was incredibly difficult, especially outside of telephony, to create applications for the phone, learning all these API's and the terminology. We said what if we take web technology and apply it to the phone so you can build a voice application the same way you build a web application. What would that look like?
The second domain was deployment. We said rather than selling a box or software to people, and then they have to go deal with carriers or their local phone companies and all that strange terminology and process, we will just pre-deploy it all for customers, in our own data centers, and they can access that platform over the Internet.
Essentially, it was XML-driven telephony development, hosted or what we would now call Software as a Service or cloud-based deployment.
When was this?
This was in 1999.
This is pretty early, you must admit.
Yes, companies like IBM, Motorola, and AT&T were just starting to look at Voice XML. Motorola had a thing called VoxML. We looked at that and thought it was interesting but it was really driven a lot by speech scientists, and especially from an IBR perspective. The kinds of applications that were on our mind were really about enabling the next generation of what I call personal communications. It was things like "follow me," "find me," unified messaging. At the time, there was Internet call waiting. You had dial up so how do you know someone is trying to call you when they're on dial up?
In our minds, we wanted to really build a platform so people could build next generation innovative and useful personal communication applications on the phone.
VoiceXML was all about speech and IVR. It literally had no call control, at all. You couldn't start two calls, and then connect them together easily, and then drop one off or record it, basically play with call legs like you would play with Legos.
So we built a thing called "CallXML", which was the first XML telephony language that had both call control and IVR-like media control. I built a prototype of it. I got pneumonia and was forced to stay at home for three weeks, so I said, "I need something to do". I built a prototype of CallXML and just like the beginnings of IRDC, started giving the phone number and URL out to my friends. Everybody loved it and started building these little applications. I said, "Okay, I think we have something here". We wrote a sensible business plan and called for about $3 million of funding to get profitable. I was in Silicon Valley, at the time.
We went and talked with Silicon Valley VC firms. We would go in and they would say, "We love the plan but we can't do this $3 million bit. The minimum investment we can do now is $30 million". The .com era was still in full effect.
After talking to the sixth VC who told me they couldn't do a $3 million deal, I started referring to myself as Pavlov's Entrepreneur. I rewrote the same plan to call for $30 million. I went back to the same VC's and they said, "This is great; let's do it". [Laughter]
Sounds fantastic. Can you clarify Call Control XML, where it came from? I know CCMXML. Are you talking about the same thing? Does it appear so?
No, CallXML was actually different. CallXML was a single language that does call control and media control. The W3 Standard approach to voice and call control, you have VoiceXML, which handles media, and CCXML, which handles call control. The way that Call Control came about was it became clear within the W3C, that they needed to address call control, as well. There was a working group set up to start working on the call control language. We had CallXML, which was getting good progress at the time, and we had put CallXML in as a suggested foundation of the new language.
There were two other companies, Cisco, and Tolera, which I think felt a bit threatened by that. We already had a lot of market progress behind CallXML. They went off in sort of back corners of the working group and starting working on an alternative to the CallXML. I didn't mention it, but in my storage days, I spent a lot of time working on storage industry standards and learning about the politics and Jujitsu of standards efforts; how people come together and want to work towards progress, but also people were looking at their own company's commercial interests.
When R.J. was in this W3C call control effort, and told me about this second effort, I said, "All right, that's great. Get a copy of it and we're going to get an engineer, right now, to make the world's first implementation of it, before anyone else does". That's exactly what happened.
We built the world's first implementation of CCXML, even though we had already done CallXML. By the time Cisco and Tolera contributed to the CCXML concepts, as another possible starting point, we said, "Hey great; we have that, too". [Laugh] At that point, they just kind of gave up and R.J. took over the CCCML Chair and Editorship. Since then, we've been the leading provider of CCXML technology, as well.
How closely related, in terms of tags, is CCMXML with what you had been doing when you had pneumonia?
It's very, very different. The W3C language, which is VoiceXML and CCXML, are designed to do everything you could possibly imagine doing with a phone. They are also designed by committee. CallXML was really designed by me, and it was designed with a significant focus on the 80/20 Rule. I focused on the 80% of things that people really often do, and not the 20%, which are sort of worn-off scenarios. I made that. I did everything I could to make that 80% very, very easy and very approachable. I left out telephony terminology. I tried to make the language extremely easy for people to develop for.
CallXML, we expected CallXML to sort of die off because it was proprietary and only ran on Voxeo. Actually, what has happened is because it brings the benefits of XML telephony, but it's extremely simple, especially compared to VoiceXML and CCXML, and it does the job for most people, we actually continue to see significant uptake and use of CallXML with our customers, even today.
That's very interesting [laughs] because I've had to spend time working with VoiceXML and Call Control XML and I've often wondered about some of the origins. It's really nice to hear some of that background
Moving on, and asking you a question I've asked of most sponsors, I would like to say firstly, that Voxeo kindly showed support for the inaugural Emerging Communications Conference, eComm. That was before it was even established, back in 2008. That was fantastic and appreciated. I think that was through R.J., who is the CTO there, and Dan York. Again, Voxeo have kindly shown support for 2009. Can you tell me why Voxeo have shown that level of community support?
The thing that I really liked about the eComm show is that you have great topics and great people and great energy. It's not stale, not the same old thing. The other shows that we've gone to and participated in, in the industry, I would sum up, as the underlying message is "Here is what the state of the industry is, today". The thing I really love about the eComm show is the underlying message is "Here is what the state of the industry probably should be instead". [Laughter]
Yeah, and here are the opportunities you could be cashing in on, if you move quickly. [Laughs]
Absolutely, so it's that difference, that contrast from here is the status quo; to here is the status woe that I really like about eComm. [Laughter]
The status woe - I like that. Talking about sponsorship, we have been joking lately, that companies that sponsor eComm are accelerating during the downturn. It started as a joke [laughs], but it's actually seeming reality because we're yet to speak to a sponsor who doesn't come back and say, "Actually, business is better". After I published a conference call, where we had spoken with Skype and others about accelerating during this downturn, I think it was Dan or somebody from Voxeo said to me, "Our business is also accelerating". I'd like to ask what sort of new and unexpected opportunities Voxeo sees because of the current economic climate?
One of the biggest things - we are also seeing great business growth right now. A good chunk of that comes from the reality that a lot of our customers, at the end of the day, use our platform to deliver various kinds of self-service solutions. Self-service solutions are a significant cost savings over deploying call center agents. There are other pros and cons, obviously, about usability and customer preferences, but there is no doubt that they do cost a lot less.
It's interesting; we didn't start the company, as I mentioned, we started the company with a focus on personal communications. On the other hand, we built the company as a platform. One of the unique things about Voxeo is we don't build any applications, at all. We don't have professional services. We don't build apps that run on our platform. All the apps that run on our platform are built by partners. We have over six hundred partners, now, that have built applications to do just that.
We also haven't tried to steer the customer base towards one area of technology or telephony application or solution or another. We started with the folks on personal communications. We started finding a lot of people that were using our platform for self-service, so we followed the customer interest and started doing more in our product technology and marketing to fulfill those self-service needs.
As a result, we have a good 60% of our customer base that is really delivering very friendly self-service solutions. We're seeing a sharp uptake in those solutions, today, as companies look at how they can reduce their costs.
That's the single biggest thing. We're also seeing, at the same time, a rebirth in really innovative applications. I think that the stressful and chaotic times like this are really, when a lot of the best companies are born and built. We're starting to see early signs of that. We've had conversations, especially in the last two months, with some entrepreneurs and people that have some very cool ideas, that we're partnering with to help them deliver those ideas to market.
That's quite interesting that you say that, because I'm aware of a number of entrepreneurs planning on launching some very interesting companies, this year. Hopefully, some of these will be represented at eComm. In the communications space, 2009, for me, looks like a very fantastic year, a catalyst year.
Let me test your morning awakeness skills. I hope you've had coffee [laughter]. I want to throw in a question of vision. What new technologies/developments do you think will disrupt the telecom industry within the next few years?
Sure, there are a couple of specific things and a couple of fundamental things, I think. Some of which I think are personally interesting and others professionally interesting. One of the things I hope comes about and that I'm seeing early signs of is deployment of microcell technologies for cell phones, where I can have my iPhone, use it when I'm travelling, and then when I come home, I have my own microcell and my iPhone will work with it when I'm here.
If you compare the capabilities of a cell phone with the capabilities of a landline phone, today, there is an enormous gap. One of the big things I've always wondered and kind of complained about is I have SMS on all my cell phones. Why can't I have SMS on my landline? Why can't I do my SMS easily, when I'm at home, with these devices too? I believe that the first company that combines microcell technology with Skype-like pricing is really going to change how the home phone environment works and the features we have. Basically, we will start using our cell phones.
Today, I see companies doing cool things on the technology with microcell, but then they're using the traditional carrier pricing models. I don't think it's really going to take off until you can see the intersection of Skype-like pricing and microcell technology. That, to me, is personally very interesting. I'm looking forward to that. I'm looking forward to seeing who the first company to do that is going to be.
The other thing I think, specifically, is going to be location-based services, location-based technologies. I know you have talked with some folks about that, in other interviews. The applications that are coming out of open availability of the application information are just increasingly impressive. Google, just recently, started talking about the Latitudes product they are sort of experimenting with. We're seeing a lot of other interesting applications out there around social connections and mapping, which I think are going to be very impressive.
The other one, which is close to Voxeo, is what we're calling unified self-service. There has been the idea, obviously, of IVR self-service, for some time, on the voice part of a phone. You're just starting to see companies do more and more SMS-based self-service, especially the mobile carriers, or USSD-based self-service. USSD is a technology I had never heard of until two months ago. I don't know if you have heard of it before.
USSD is carried on the SS7 stack. I'm Mr. SS7 in a past life [laughs]. USSD I know, very well.
It turns out that GSM phones, if they implement the full GSM standard, which they're required to do, have support for USSD also, in addition to SMS. The user experience is very similar, but the way it was first described to me is that SMS is sort of literally like email. It has a store-and-forward approach to the network. It can take five, ten, fifteen seconds or more for the message to get there.
When you have a USSD connection in the phone, it's like having a Telnet connection to the phone. It's pretty much real time. When these carriers are providing their SMS-based self-service solutions, really what most of them are doing is they're using USSD under the hood for better user experience.
You have phone-based voice self-service. You have SMS-based self-service. We're starting to see customers that are doing effectively instant messaging or chat-based self-service. I'm sure you've seen more and more websites where it has a "chat now" button and you can click on it and talk to a customer service agent or sales person, right there.
Finally, for example, with our voice VoiceObjects acquisition, T-Mobile is one of our customers, and T-Mobile Czechoslovakia also had kiosk-based self-service. When you went into one of their stores, instead of having to wait for a person, you could go to a kiosk and check your balance, pay your bill, buy a new phone.
In the past, these self-service solutions were all different development efforts. You'd build an IVR application. You would build an SMS application. You would build your chat stuff. You would build your kiosk-based self-service. The other thing is that as these non-voice forms of self-service become more popular, especially the chat-based self-service, there is a natural drive to, "All right, we're going to chat with them, but first, let's collect their name and their account number and get an idea of what they want so we can route them to the right support person". That's classic IVR computer telephony-integration type stuff.
We took a step back and looked at that and said, "Let's do this unified self-service. Make it so people can build an application one time, describing a self-service dialog, and then that one application can work via voice, IM, SMS".
I really like that. It just seems incredibly logical, again, like why is it not here, today [laughs].
We've summed the concept up as unified self-service, kind of playing off of unified messaging and unified communications. We're starting to see customers like T-Mobile Czechoslovakia, who are using our technology and tools like we have with the VoiceObjects acquisition, to do just that. I think that that, especially relative to our business, is going to be a significant area of change over the next couple of years.
Finally, the big thing I see is dis-aggregation, breaking up the services that were provided by big entities, whether they're carriers or companies like Voxeo, and sort of selling them as more piecemeal technology solutions
Dis-aggregation - that's very interesting. Did you ever read Moshe's book, The Pebble and Avalanche?
He gave me a copy of that a couple of years ago, and I've always meant to go back and read it. I read just the first few pages and thought, "Oh, this is so true. I need to read this book". I will get around to it, this year, I promise, Moshe - if he hears this.
No, it's a good book. It really is.
Just jumping back on developer track a little bit, Voxeo has been around ten years. Fitting into the last question, how do you see voice developer tools changing, over the last ten years and where do you see voice developer tools going forwards?
It's an interesting question and one I've spent a lot of time thinking about, lately. My analysis and conclusion is that it's really repeating waves. If you go back to the 1990's, when we first built the unified messaging platform, it was all about telephony API's, whether it was the Dialogic API, or standard attempts like S100 and TAPI, or visual basic OCX controls from companies like Visual Voice, it was very API centered, telephony development.
Then, starting about ten years ago, right about the time Voxeo was born, there was a strong push to XML, in general, throughout the development world and to XML telephony technologies like VoiceXML and CCXML and our CallXML language. We've been riding that wave since Voxeo's birth, to the point that the XML-centered technologies have really taken over in the enterprise, especially, and especially larger enterprises. Large enterprises, every RFP that we're seeing out there, today, are very centered on VoiceXML and CCXML type of technology.
Interestingly, at the same time, we're seeing on the more innovative front, away from a lot of large enterprises, a move back towards API-based telephony, but with distributed architectures and focused on programming languages like Ruby and Groovy and EKLA and Python.
We believe that over the next couple of years, you're going to see the continued success of XML-based telephony, especially in large enterprises, and more growth again of API-based telephony in the more innovative development circles and startups.
What do you think that's happening? What is giving that push?
I think it's a couple of things. I think these things go in waves, in part, because new technologies come around and there is a tendency to overreact, over adopt, and over support them. XML-based telephony is great for a lot of things but it has its disadvantages, too. VoiceXML and CCXML tend to be relatively complex. They're great for developing applications but they make it even harder to sort of debug applications, after the fact. There is a general movement away from XML, again, especially in the more innovative side of programming and startups, today.
I think part of it is just pulling back from an over-adoption of XML and going back and saying, "Look, there are places where API-based solutions work great and there are places where XML-based solutions work great. Let's be more sensible about where we divide that". I also think it's partially cultural. "Hey, enterprise is all using XML-based telephony now, it's no longer cool".
So, let's start doing Ruby-based.
Exactly, and Ruby is an impressive language, so it's 100% buzzword and cool-compliant. I can definitely understand that. I've actually been learning Ruby, lately, myself.
Okay, so you get the "cool kid" t-shirt when you're doing it in Ruby, right? [Laughter]
Talking about having a cool t-shirt and so on, what are you most excited about at Voxeo, right now?
Actually, a lot mirror image what we were just talking about. I'm very excited about our success in the enterprise. I mean, look, we're a company literally started by a phreaker/hacker in his youth. I started Voxeo because computer telephony sucked. That was my viewpoint. It's interesting; I really don't like the industry that we're in, in terms of its stagnant nature. I have felt a strong desire for change and started Voxeo, essentially, to bring change to the industry, to the largest degree I could.
It's very impressive, to me, personally, that we're seeing as much enterprise success as we have. Data Monitors just came out with a report, profiling premise IVR solutions. It's got Cisco, Avaya, Nortel, and Genesis, and InterVoice, and all of the big guys, multi-billion dollar companies.
The conclusion of the report is that there were two leaders in the industry moving forward - Genesis and Voxeo. I just looked at that and thought, "We've been selling a premise product since 2006. These other guys are multi-billion dollar companies. They've been doing this stuff for five, six, seven, eight times longer than we have. Even analysts are starting to say, 'Look, the way Voxeo is approaching the market is disruptive and that disruptive nature is being adopted by enterprises'." Again, not trying to give too many kudos to ourselves, but I'm personally very thrilled at the enterprise success we're seeing, and the fact that we're displacing these large vendors that I've personally despised as a potential customer, and many of the prospects despised, too. [Laughter]
That's very amazing. You just come across, and in fact, I don't need to say come across - are leading innovators. It's just really fantastic to have you on board as sponsors. It helps rubber stamp the event as being the place of innovators. It's really funny to hear that report.
That report has been great for us. At the same time, recognizing the waves I was talking about earlier, we have several new stealth-mode projects and products coming out over the next six months that I'm very excited about, as well. I can't talk about it that much now, but we are launching one of them at the eComm show. I look forward to unveiling that and talking with everybody there, but I'm also very excited about a lot of the things we're doing to really push that innovation forward, this year.
Okay, just to being drawing this to a conclusion, since I've eaten four times as much time as I was meant to have, which has become fairly standard. Voxeo has made a number of acquisitions over the last few years. I don't think there is any secret of that. In particular, in the second half of last year, do you think that acquisitions are good for expansion and are they working out for you? Did you make a mistake or did you not, is the real question.
I think acquisitions are a great way to expand if they're done right. I think that eight out of ten companies don't do acquisitions right. We've acquired four companies in the last four years, two in the second half of last year and the plan is that we're going to acquire four companies this year, assuming we find the right deals.
The acquisitions have worked out very well for us. First off, if you look at it from a team basis, we've got about 160 people today, and about 60 of those people have come into the company through the acquisitions. We have a great retention rate for employees that came in on acquisitions. It's over 98%. We've literally built the company largely with the people and technologies that we've acquired over the years.
I said it's great if it's done right. The biggest problem I see is that a lot of companies buy other companies and then they pretty much just trash the company they just bought. They come into the deal with a very preset concept on how the acquisition is going to work and what the company is going to look like afterwards and what the products are going to look like, afterwards.
We've heard that, unfortunately, about one of our competitors. Envox was bought by Syntellect, and from what I hear, they're getting rid of all the people, they're changing the product direction to fit what Syntellect was doing before. I think that's the exact wrong thing to do.
We structure our acquisition process around the idea that we don't know how things are going to end up and that there is a lot of experience and a lot of best practice and contextual knowledge that we're acquiring, that unless we're careful, we'll destroy without even realizing that it was there. We go into acquisitions with a six-month process to just learn, to ask a lot of questions and sort of sell side-by-side, and figure out what the strengths and weaknesses are of the people and the technology and marketing of the different entities and then take the best from each and combine it. That's how we move the company forward.
We pay a lot of attention to cultural issues. We pay a lot of attention to making sure new employees are happy. We move slowly. We don't bring in change so we don't lose that best practice. In doing it that way, acquisitions have been great for us. That's why we're looking to do several more, this year.
I hope you find new companies to cut deals with in the acquisition space, this year. I look forward to hearing about and watching what you're doing with great interest, trying to second-guess what it is you're aiming for in the longer run.
As a final kind of question, I would like to ask what you're looking forward to most, at the Emerging Communications Conference, which starts in what feels like just a few weeks?
I think it is literally a few weeks. The single biggest thing, I mentioned before, I really believe that leading companies are often born during times like we're seeing today. Personally, I'm very interested to see how our industry responds to the chaos and stress that is coming from the world financial condition. I really do believe that we're going to see the start of new leaders in our industry at the eComm show. I think it will be very important to be there and to talk with people and see a lot of the things coming out and being launched, and watch these leaders arise.
I hope that it's okay to have this in a public domain. I'll not say much, but I'll say you will be a speaker and you will be doing something interesting. It will not be on the schedule. Is that okay to mention?
That's perfectly fine.
Okay, so we have warned people that you will be speaking but you will never appear on the schedule. We will leave it for others who do come along, to find out what it is you're going to be doing.
Yes, we're looking forward to a couple of key announcements at the show.
Okay, I would like to thank you for spending the time with me. That was very entertaining, I must admit. You gave me my morning laugh and I find it very interesting. It put a big smile on my face [laughs], especially earlier on, until we got down to talking about acquisitions and so on. I loved hearing the origins, yourself, the company, and I loved hearing the tales of how you're competing exceptionally successful, as a nimble and innovative player among giants.
I honestly enjoyed it, too. I look forward to meeting you in person, finally, at the show.
Thank you, Jonathan, have a great day.
You too, Lee, talk with you soon.