8x8 Chairman & CTO Bryan Martin talks with MI&S's Patrick Moorhead on open communications platforms

I'm doing great, Patrick.

Definitely more exciting. Yes, we are broadcasting on LinkedIn, YouTube, Twitter, and Facebook. So here we go.

Yeah, for sure. So 8x8 is a global provider of cloud communications to businesses of all sizes. We sell to small businesses, we sell to huge Fortune 5 enterprise-type customers. And we provide a business phone replacement from the cloud, but we also provide other kinds of channels of communication: team chat, SMS (which is just a fancy word for text messaging), video conferencing, video communications, and we do contact center, which is customer service or a sales team where you've got a density of communications all coming into an agent pool. And we enable you to work from anywhere, which has been very much in vogue this year, and work from any device. So one of the real exciting things to me this year was we went from a third of our users using our soft devices (desktop client or mobile app) to now two-thirds to three-quarters of our users. That's the preferred mode of doing it. I'm the CTO, as you said. Technologist by training, I've been in the communications industry 30 years, and I just love this stuff. I love seeing what our customers can do with the technologies we provide, and it's been really gratifying this year to be out there trying to help these businesses stay in business.

Yeah, so all of that is true, and we're supplying all of those different use cases, whether it's voice or video or chat. It's really about being able to enable... we had people remote in the field, but we didn't have everyone remote all the time. And so it's really about standing up a reliable, resilient communications function. And we think about it both: how employees of the company communicate with each other and how they're going to continue doing their jobs and collaborate and do everything that they used to do in person now that everyone's remote, but also how the company communicates with its customers and its partners, and how people outside the company are going to interact with the company in this new world. So we're solving for both of those use cases. And I can tell you, there were companies, customers of ours, who had already deployed us when the lockdown hit, and they didn't miss a beat. Literally overnight, even contact centers, large customer service centers that had never even practiced doing a work-from-home mode just switched into that mode seamlessly. And then there are a lot of organizations that weren't ready and had legacy on-premise communications and needed a super quick replacement. So we've served in both of those roles as well. You could definitely tell the difference between those who were ready with cloud-enabled systems. Literally within three or four days, or instantaneously if they had the communications at home, to redeploy their contact centers there. It was pretty astounding, for sure.

Yeah, so 8x8 has always evangelized the single vendor approach. We started in this business just offering what is called commonly unified communications, which is a business phone replacement, but very quickly saw that contact center and those customer service functions belong together. And then we just kept layering, and our roadmap is really driven by our customers saying, 'Well, can you guys do call recording? Can you give me analytics? Can you give me integrations and automations to the rest of my back office?' And so over more than 10 years now, we've been integrating all of this onto a common single platform. And you can buy everything from us. It's one vendor relationship, it's one hand to shake. It could be one throat to choke if I'm not delivering the services you need, but hopefully it's one hand to shake all the time. And that's how we see the world. Having said that, there are what I call pillars of business that are out there right now. It's companies like Slack that kind of took over the developer community, companies like Zoom that became a verb for video. And if you've got an established pillar that's in there, our platform's modular. We'll work around whatever functionality you don't want to change and still provide you all the rest. And that way, over time, you have our option for video built in if and when that makes sense. So that's kind of how we think about the world. But definitely every CIO out there is thinking about these things right now and what their strategy is for down the road, where they want to be in a few years.

Yeah, I think open is super important, and it's more important the bigger the organization is. And the reason for that is you're always wanting to integrate the communications functionality and platform with the rest of your office. The more automation you can drive in there, you've got a CRM deployed, and if we can make sure every call into my call center gets automatically logged, automatically recorded, get all that data timestamped and put directly into the customer record in the CRM, those are some of the things most larger businesses want today, and it's just kind of table stakes to do this. So we work with companies like Salesforce.com, NetSuite, et cetera, making sure those automations are there. The other place we're seeing a lot of requests for open is people that are trying to now incorporate communications into their actual business flows and business processes. And 8x8 has really invested the last couple of years in what's called CPaaS, Communication Platform as a Service. But it really enables you to embed messaging, texting, phone calls, and even video into those flows so that you're serving your customer base even better.

Yeah, and part of it goes back to that single vendor play. Because if you've only got 8x8 to worry about, and frankly you don't have to worry about 8x8 because we worry about 8x8 for you, but you don't have to go through and look at security of different systems and how they're sharing information. Security has been first and foremost a struggle for us in the cloud. The easy way out would have been to always put the data, the call recordings, whatever it is, on-prem behind a firewall and just say no, we're not going to do that. But we really followed cloud best practices to say, 'No, let's figure out how to do this out in the cloud.' And security has become so much more important now that those employees are everywhere, on devices that aren't under the company control. We have seen one great sign of how well we're doing in security: we have seen very conservative, what I would call late adopter institutions—finance, medical, universities, all sorts of very security-sensitive clients—actually moving to the cloud. And banks in particular, I saw this start about 18 months ago, so even pre-pandemic. And I would ask those CIOs, 'I've been trying to sell to you for 20 years, why are you now moving to the cloud?' And the answer always comes back the same: 'Bryan, we now believe that cloud communications is actually more secure than us trying to run this ourselves on-premise part-time.' And so 8x8, we've got nearly 2,000 employees around the world, every one of which is making sure that our platform is secure and our customers' data is secure. And that's, I do believe, it's more secure than going other avenues.

Yeah, no, that's for sure. These hackers are some of the smartest people on the planet, and if I could ever catch one, I would hire them, because I would love to have them working with us, not against us. But yeah, it's a very serious topic, and again, something that from day one we've worried about.

And we've been on that GDPR journey. It's still, it's not something that ever ends; it continues to roll along. About a third of our employees are in Europe, and even the UK Brexit caused us to shift strategies of where we're going to fail over, where we're going to store the backup of different data. So it's a continuing challenge. But again, working with a cloud communications provider like 8x8, you're actually outsourcing a lot of that headache to us, and we'll provide you with whatever audit trail you need to satisfy yourself that we're doing it the right way.

Yeah, so mix and match is a kind of unique value of 8x8's offer. We allow you, first of all, at the employee level, to mix and match the capabilities, and so you can really cost-optimize your solution. You don't have to, a lot of the cloud offers that are out there, you buy one size for every employee and it's the same price, and you really don't have that ability to customize. But we also see mix and match come into play when we're starting to work with other communication tools. I talked about those pillars, and one of those pillars that's really taken off in the last 12 months is Microsoft Teams. And there are a lot of IT leaders and CIOs that have chosen, 'Look, I've got this Microsoft Teams experience. I've already got the software, it's there, it's global, I have access to it around the world, every employee can use it.' And we just saw that take off. Usually in the early days, it was people using Teams for either chat (competing with Slack) or they were using it for the video experience, but it was communications within the enterprise. And 8x8 came along when we saw that and actually developed a solution that provides 8x8 voice platform for Microsoft Teams. So you can bring our enterprise class, everything we do, everything I've talked about, but still use that Microsoft Teams experience as the user-facing client. And that's been hugely successful. We're deploying that globally now, tens of thousands of seats just last quarter alone. And the great thing about mix and match in that context is maybe not all your employees have a Teams license. Maybe you've got phones on a factory floor where it doesn't make any sense to have a Teams experience there, and then you can mix and match the 8x8 endpoints for those users or those seats and not have to have Teams across the organization.

Yeah, it's an absolute hockey stick. It's amazing.

Yeah, so I think the two ends of the spectrum here: you're buying a communication solution that is out of the box and it just does what it does and you have no ability to change it. At the other end of the spectrum, there's companies like AWS that have taken an approach of, 'No, I'm just going to give you a programming platform and you go write everything yourself.' And what 8x8 is, is what we believe the right path is: to give you something right in the middle. Give you something out of the box that's going to work on day one, it's all set up for you, it's complete, it does everything. In the contact center example, that you need in a contact center, it's omnichannel, it just works. But you can still modify how the call flows work, you can customize how we're going to process an interaction so that it works with your business, with your process flow, with your tools, and change what we do out of the box and really customize that. And about half of the organizations we work with in the IT land have these development resources and they want to be able to embed our communications into a bigger platform or a better offering. And so that's where that extendability and customization comes into play.

Yeah, so this is probably the biggest functional advantage of having a single communications platform. As you said, every stage of an interaction—let's say a customer calls our main corporate number in North America, maybe an auto attendant answers that after hours, they press one to go into sales, a sales person picks up and realizes, 'Oh, this is an existing customer, let me transfer them to support to solve their problem.' If you have different systems, every one of those jumps is going to lose the track that that customer is on the journey they're taking in communicating with your company. If you have a single platform, we actually see that, and we see it across all different modes of communication. So again, maybe this person's calling us today, but they texted us last week, and they sent us an email the week before. Being able to piece all of that together so I can go into this common data layer and say, 'Hey, who at 8x8 has talked to someone at Wells Fargo in the last year?' And I can simply run that query and get all those different interactions and really learn. And the power of this is we're trying to use that data so that a business can understand itself better and ultimately make itself more efficient. And there's a lot of great R&D that's going on, a lot of applications for AI and machine learning because there's so much data in there. You think about the amount of data we're looking at: every interaction in every channel on all these different devices. That's where AI and machine learning really comes into play to help you understand the data.

Yeah, we've got a giant internal CSO team that is what they do. They work hand in hand with our development team. And again, 8x8, another unique thing: we own everything that we're providing to our customers. So if there's some problem with how it's processing data, it's our fault and we're going to fix it. But it's, again, that's the value you're getting: leverage my experts to do that work for you so that you, as an IT leader, can go off and find other ways to add value to the business and let 8x8 secure that communications data.

Every CIO, every IT leader basically got a grade, I call it a grade, back in the spring as to how ready you were. And some of the IT leaders out there failed that test, and they had about 30 to 60 days to stand something up and get it right. I think as we get into 2021, you're going to see more of these challenges. I think working in a hybrid mode is going to become a challenge. I think how collaboration happens longer term is going to continue to be a challenge. And so my advice would be: you now have a chance to catch your breath and actually start planning out the next 12 to 24 months. The CIOs I know are all thinking much longer term now, like what do we really want to have next? And you've got an opportunity to take those steps now and put the right platform and technology strategy in place so that you're ready, because I think there'll be another grade coming. And unfortunately, there's some things about this where business is better and we'll probably not go back to doing things the way we did, but there's some real challenges out there. And how you keep a company's culture, how I onboard new employees when we're never meeting them face to face—there's a lot of things that 8x8 continues to drive research and development to solve those problems for our customers before they encounter them on the road.

Thank you, Patrick. Thanks for having us on today.