 Live from Orlando, Florida, it's theCUBE. Covering Enterprise Connect 2019, brought to you by 5.9. Hello from Orlando, we are at Enterprise Connect 2019 and we are being very graciously hosted by 5.9, which is the Intelligent Cloud Contact Center. We've had a great few days, Stu Miniman and myself talking with customers, partners, vendors on this massive change in enterprise communication and collaboration, and we're excited to welcome back to theCUBE, one of our alumni, Zia Caravella, the founder and principal analyst at ZK Research. Zia, it's great to have you here. It's awesome to be here. You are, you should have VIP status at Enterprise Connect because you have been to this event some 20 times. Yeah, I believe it's my 20th. I can't imagine, so they shouldn't rule out the red carpet, maybe we'll put a note in. Yeah, well, next year. But yeah, there you go. I want to get my own booth. There you go. But I can't imagine how much this event has changed and just your perspectives on day three here of EC19 and some of the vendors that you're like, wow, a few years ago, you would never have seen a so-and-so here. Yeah, the show's massive compared to what it used to be. I remember when I first started coming, the show floor was maybe, if it was a quarter of the size, I mean generous, and it was really dominated by just a handful of companies, but since then it's gone through several transitions to IP, to software, to the cloud, and that's gotten a lot more companies interested. And I think also, finally, businesses start to understand that if you're going to transform digitally, communications has to be part of that. In fact, if you look at any piece of research, I know there's a Walker study thrown around saying that by 2020 customer experience will be the number one brand differentiator, that's already happening. It's already the number one brand differentiator. And so because of that, more and more companies are now interested in communication. So 10 years ago, 15 years ago, we didn't have Amazon here, we didn't have Microsoft here, we didn't have Oracle here, but it's been a great thing for the show to see all these other companies that really have really great IT presence validate what we've been saying for a long time, and it's a much different show today than it was. Yeah, it's really interesting. The things that opened my eye is some of the companies that are here, I wish I knew which brands use these technologies so that if and when I do have an issue, I'm not going to have that horrible customer experience that we've had in the past before. It's like if I wanted to make a call, it's like can I even make a call and do I actually get through the IVR or things like that? I like how you set it up. There's some of these pendulum swings and some of these waves of technology. Let's talk a little bit about voice because this used to be called VoiceCon and it went through a rebranding because voice wasn't a little bit of decline, but we know voice is still very important. How does that fit in the whole place? Well, it went through that rebrand. Frankly, voice wasn't sexy anymore. Everyone was talking about unified communications. No one was going to call anybody ever again. We were just going to message or social each other to death. And what's happened is voice is kind of important, right? And I think one of the interesting friends to look at is that voice is becoming simultaneously less important and more important. And what I mean by that is it may sound like a little bit of an oxymoron, but if you look across all age demographics, right, everybody has a preferred mode of communications and it's rarely voice to start a conversation with a company. You message them, you social them, send them an email, but somewhere in there, you eventually want to talk to somebody. And at that moment, so to start the conversation, voice is less important, but at that moment, you now want to have a conversation with an educated agent who knows what your problem is and can help you quickly. And so now voice is more important than it's ever been before, where I think the buried entry wasn't all that high, but voice is, you know, it's important, it's sexy, and especially when people are dealing with emotional issues, they're dealing with money problems, right? If I'm trying to get a refund, if I'm trying to check on the status of my health, I want to talk to somebody, but when I want to talk to somebody, I want to get that conversation with over as possible. I think the bar has been raised, as you mentioned, Stu, you used to think that the dreaded IVR, if you have a dreaded IVR experience, you just won't do business with that company anymore, right, and so the stakes are higher and the bar has been raised on what voice is. Are you seeing that the customers that you were talking to are now starting to get much more prescriptive in terms of understanding their customer journeys and their preferences before they used to go, oh, we assume we're talking to millennials. They only want to SMS or email. Are companies starting to get more focused on, all right, let's actually do analysis and determine, if we're voice only, what are the next channels that we need to enable? Well, I wish they were. I think we're really in the early endings of that. I think the best companies in the world are doing that. If you look at companies with very high NPS scores and customer SAT scores, they're doing that thing already and I think it's a good lesson for the rest of the industry. If you're not doing that, you're going to fall behind pretty quickly and I think that is driving companies more to this omnichannel experience where from an analytic standpoint, you really have to understand your customer, not at the demographic level, but almost at a custom level because everyone's different, right? I think that's never been possible before, but today because we've got bigger data sets, things are in the cloud, the rise of artificial intelligence, it's made all this stuff possible. And so companies, like I said, the best companies in the world are taking advantage of it and they're having big differences. That's why there's been such huge swings in the market leadership, right? The companies we've never heard of before are market leaders and brands we trusted and loved before or they're gone. Yeah, I'm glad you brought that up because every company we talked to this week, that CX is at the center of what they're talking about. So in your research, what is differentiating those new leaders and causing some of those swings in the marketplace? How does the customer look at these and help differentiate an ever-changing marketplace? Well, what's going on today? It's really about being more contextual, having a deeper understanding of why your customer's calling, how you can help them faster, understanding maybe what products they own, what are some of the adjacent ones? And I think that's going to very quickly become table stakes and I think where we're moving to is we're going to shift customer service from being largely inbound driven and reactive and that's where AI can help react faster to being more outbound driven and proactive, right? So for instance, let's say I buy a connected refrigerator and my water filter needs changing. Well, right now I still have to recognize that and maybe I called that refrigerator company and they can proactively help me because they understand what I have and they've got a great omnichannel contact center but ultimately that should be reversed. They should contact me maybe through a text message saying, hey, you notice your water filter needs changing, can we send you one? I hear yes, it comes and then maybe I call the agent and say can you help me install it, right? And so I think within the next three, four years we're going to see a lot of customer service where contextual is the table stakes and then the ability to predict what your customer wants, that's going to be the differentiator and frankly that's really exciting. I mean, if you think we've seen change in this industry, as you mentioned in the last five years, wait for the next five. When you're talking with customers or even doing research and other venues, Stu mentioned CX, we've been talking about it all week but I get curious when I hear the customer experience and the agent experience, I just think how are they separate? Because if the agent isn't empowered to be able to whether it's know the right channel that I want to be communicated with or have the information or the context about why I'm calling then the customer experience, right? Yeah, well they're very tightly linked together. You can't have a good customer experience without a good agent experience and you may have the best trained agents in the world that are the most empathetic, that are incredibly sensitive to what people want but if they don't have the data, you're going to frustrate your customer and everybody's been through that situation where you get transferred to somebody else and you got to start that whole conversation over again and eventually you just hang up and say I don't want to ever do business to you. So I think, you're right, agent experience and customer experience are very tightly interwoven and they're really dependent on one another. You can't do without the data and again that's where all these trends of AI come into play because they're able to send better information to the agents faster really through an assistive technology versus replacement, right? So when we came into this show we knew that the wave of cloud had made a big transformation. We're starting to hear AI as the next wave everybody's talking about. I believe I read something that you would have written that was talking about whether that AI is something just internal that the company builds in versus how it interacts with the customer. Where do you see AI having the biggest impact kind of in the short term and where is it more long term? It's a great question because I ask my customers all the time should we be using intelligent bots or if you saw the Google duplex demo where they have an AI call and order pizza I think it was or something like that so is AI ready to talk to people? And I think if you think of the entire world of interactions on a two by two grid as an analyst we like two by two grids, right? And you put complexity of conversation on one axis and frequency of interactions if it's low complexity, high frequency that might be okay to try and automate through a bot. Other than that everything should flip to agent and I think right now we're very early in the AI cycle and so as a business I'm not sure I trust the AI to always have the right answer, right? But it makes a great assistive technology to recommend to the agent this is what you should say and the great thing about that is if the agents know that's stupid and says that wasn't helpful that becomes the input to the learning mechanism for the AI so over time it'll get smarter and smarter but if you want to think about just the role of it now I always use the analogies like a self-driving car I'm not sure if either one of you would want to jump in a car that has no driver, no steering wheel, no controls but there's a lot of great AI technology in a car like lane change assist, parallel parking assist things like that that can make you a better driver so let's make our agents better drivers by giving them those assistive technologies and that's the short term vision, long term who knows but I think if companies are too aggressive with AI they're actually going to create the opposite effect where they hurt customer experience it's the people that make a difference so let's make those people better. That's one of the things that we've heard consistently throughout this event is the empathy factor that the machines can't bring but it's really got to be the humans with the AI to deliver an ideal hopefully optimal experience to whatever customer has whatever issue on the back end. Yeah, in fact Rowan always talks about that as well the CEO of 5.9 and I think he's right from that regard it is about having the knowledge of the customer and the empathy to understand put yourself in the customer's position and this to your point Lisa about CX and Asian experience being tied together if the Asian distress because they don't have the right information and they're trying to message this person or look something up in a database that frustration is going to come through to the customer and that further frustrates the customer, right? So if the agent's armed with the right information they can spend more time focused on the customer and less time trying to find the data that frankly they should have at their fingertips all the time. Yeah, so speaking of 5.9 you recently attended their analyst event. I did. And we've had the executives on the team Jonathan on earlier this week rock star background we're going to have rolling on a little bit later we know him from his Cisco days without breaking any NDAs give us a little bit of the insight as to 5.9, what have they been doing well? What's the new team driving them forward towards? Well, I mean if you look at their stock price since Rowan joined it's more than double so obviously there's some good growth there. I think one of the, I've always believed that it's very difficult to compete on product alone, right? And if you believe this whole world of it is customer experience that's what they do really well. The customers, their customers have a great experience dealing with 5.9. They have a great service organization that makes sure that when you buy 5.9 you have a good onboarding experience that it's set up the way you want it and that services business makes a big difference. Now they've always had that. Now where I think the new executive team has made a difference is helping the company understand the scale, move up market to more enterprises because the needs there are different than down market and so I think they're going to have a big impact on the future of 5.9. Frankly I think a lot of what you've seen for growth in the last year has been stuff that was put in place but I know they're working on a lot of AI capabilities without breaking any NDAs. I can tell you that the demonstrations that Jonathan Rosenberg who's an incredibly smart guy, I mean he might be the smartest guy in this industry was giving around how AI can impact customer experience was the best set of concrete examples that I've seen today because it's really easy to give me pie in the sky hypothetical things but he really boiled it down at a very granular level of this possible, this is possible and I'm expecting over the next year 5.9 customers will see those things. They've done really well in the enterprise market. I think last year in 2018 they closed very, very strongly. Also a lot of growth in their enterprise customers with a million in ARR plus. What are you seeing though in terms of some of the smaller businesses that probably are facing a lot of the same challenges that enterprises are? Is this an area where they can also leverage 5.9 to really dial up and deliver great CX? Yeah well the line has moved up, right? Of people interested in cloud services. It used to be just small businesses and now it's all kinds but I think for a small business you can look like a much larger business. I think there's a lot of companies, people sometimes think it's a little risky to deal with a small company but 5.9 is a very, very valuable tool because by having that information right away as it agents fingertips they're able to actually replicate a large company experience and almost validate that the customer made the right decision using them. So I think up and down the stack for 5.9 they provide value to companies of all sizes today. One of the interesting aspects of what I've seen too is everybody talks about this $24 billion TAM for contact center. I actually think it's a lot bigger than that and I say that because the $24 billion TAM is based on giving contact center people contact center tools but what I've been noticing over the last year is when people buy 5.9 often it's not contact center people using it. It's sales people, marketing people, field service, anybody that needs to customer info is using it. And I'll give you an example. One of the customers that was at the 5.9 day I can't say who they are. They migrated all 50 contact center agents to 5.9 and since then they've added 100 more sales people using the tools. So now we've got 150 people using 5.9 when there was only 50 contact center agents. So you can see the value is starting to spread across the company. And I think that's a pretty exciting thing. Yeah, it's been interesting. We've seen at the show and in some of the interviews that line between kind of unified communications and contact center seems to be blurring. It seems to be that. Well everybody needs that data and the customer info. I actually think TAM is closer to 40, 45 billion to be frank. Anybody who uses a CRM tool should have 5.9 capabilities. Zia, thank you so much for sharing your insights and your energy on day three of Enterprise Connect 19. We appreciate your time. Thank you. First to minimum, I'm Lisa Martin. You're watching theCUBE.