Wainhouse Research – David Obrand Interview

Often company leaders come along and get boisterous about shaking up the industry. Every now and then we run into a CEO managing with such velocity that we wonder — will this be the one? It’s more than a parlor game to try to recognize whose coat tails the industry may grab. Alan caught up with Fuze’s David Obrand – who in about eight months has shaken up the company formerly known as FuzeBox — well, see what you think after reading this.

WR: Let’s start big, David. What is Fuze? Fuze’s goal and how is it going to take over the world?

DO: Fuze is enterprise video collaboration designed for the user. We approach this with a vision and strategy very different from others in the space. We want to make video collaboration a utility for all knowledge workers that matches the way people work today and works seamlessly across the devices and applications people use to get work done.

We have purposefully built an executive team with deep experience across four areas: 1) Unified Communications — Our heads of engineering and product came from Skype, Lync, and Google. 2) We’ve rebuilt the sales organization with proven enterprise SaaS experience and married it with an experienced customer success organization — both led by a proven leader from Salesforce.com and Yammer. 3) Then we brought in people with deep freemium experience from the marketing and analytics side. And 4), we focused on the technology operations side to build and scale resiliency in the cloud.

WR: You worked for Salesforce.com and are known for helping drive enterprise adoption at Yammer — the enterprise social network platform that is now part of Microsoft. What did you learn there that you are applying at Fuze?

DO: I don’t think 30 minutes is enough time (laughter). Some of the key learnings we are applying here are about the power of consumerization, the importance of customer success and disruptive potential of a user- focused, data-driven product development strategy.

WR: Why do you think consumerization so important for this market?

DO: Companies today can no longer dictate the tools employees use to get work done. The tools must support how people actually work, which is increasingly dispersed, mobile and cross-functional, and they must work across the many devices people use throughout their day. Traditional tools, built on legacy architectures are not matching these needs, which is why consumerization of the enterprise is happening so rapidly.

There is clear indication that consumerization is already impacting this market, based on the increasing use of consumer products like Skype, Facetime, and Google Hangouts for work purposes. If you believe this trend, then there are certain tenets a successful product must follow, such as a true freemium service with “virality,” an analytic- driven approach, speed of innovation, native platform support, and enterprise credibility, optimizing for the user experience, a cloud only architecture, and cloud integrations.

It all starts with building for the user. It sounds obvious, but it requires a very different architecture, development methodology, analytics capabilities and a customer engagement model. Other than Fuze, I don’t see anyone in this space taking a similar approach.

WR: You are also a big believer in freemium. Can you explain how that is different from a free trial?

DO: Freemium is one key to a successful consumerization service. There is a huge difference between a freemium product and a free trial. Freemium sets a high bar. It means your product has to be really good, because there is no barrier to using it. If you are driving to ubiquity, then you can’t exclude certain people in a time-based trial. You can’t have limited functionality, because use cases are broad across organizations. If we want this to be as ubiquitous as email, the product has to provide value to all knowledge workers and work for many use cases.

WR: What else are you doing to leverage consumerization?

DO: We’re making a big investment in native platform support. Mobile is critical to how people work today and users have expectations that tools work reliably across the many devices they use throughout their day. I can’t just build a Mac solution and cram it into Android device, that’s not a good user experience.

WR: Where does IT fit into a consumerization movement?

DO: We are very clear that we are building an enterprise product. This means that, although we build for users, we have to also address the security, compliance, reliability and integration needs of IT. At Yammer and now at Fuze, we saw a big shift in how IT views cloud-based tools for collaboration, as well as freemium tools. Users self- selecting tools helps IT identify where current solutions are falling down. Voluntary adoption helps address the single biggest challenge for enterprise collaboration initiatives, which is driving and sustaining user adoption.

To help, we have made big investments in customer success and analytics. Our customers – both business and IT — are supported by a customer success organization that helps with everything from planning and integrations to driving engagement and measurement.

Through analytics, we can show CIOs how Fuze is being used across the organization, which is incredibly valuable data for IT to show business value and ROI. For example, we provide clients visibility into their aggregate usage across locations and departments, including media types and devices used. We can help organizations understand how they are using audio and where costs can be reduced by moving users to VoIP, where to invest in more bandwidth, and where to focus user engagement  activities to drive further use cases. It makes Fuze a true partner for IT.

Integration with existing tools is also critical. Fuze supports single-sign on and LDAP integration, as well as interoperability with room-based video conferencing systems. Fuze also works with Lync, Outlook and Google Calendar. Integration into a user’s personal cloud is important and we’ll soon add connections to Box, Dropbox, Salesforce and other applications you carry in the cloud.

WR: You mentioned interoperability with room-based video conferencing systems. This is a lot of work and a potential quagmire to support. Why do you think it’s important?

DO: Companies have investments they need to depreciate and different cultural abilities to absorb change. Providing interop gives customers a bridge between the old world and the new. Our goal is to help them run across that bridge as quickly as possible, but at the pace that makes sense for their organization.

WR: You talk a lot about analytics. How does Fuze use data in product development?

DO: Analytics helps ensure changes we make in the product benefit the majority of users. It also keeps us honest and ensures our development resources are focused on the things that matter most to users. We do this by building feature flags, A/B testing changes, and constantly measuring aggregate behavioral data. We are currently on three-week release cycles, and our data- driven approach ensures everything we release has a very high degree of relevance to users.

WR: OK, this is all well and good, David, but c’mon, how is it going after eight months? You’ve raised some money and you are spending some money.

DO: Exceedingly well. When I joined, I realized this company had done a lot architecturally to align with the tenets of consumerization. But, at the time, the goal was to build a better WebEx — which was not the right vision. We sat down with our board and said let’s slow down before we speed up. With a new vision, we spent the first six months rebuilding the user experience to appeal to all types of knowledge workers. We also created a new analytics platform, as well as redundancy across multiple data centers.

We doubled down on our customer success and support organization. We now offer 24×7 support. We rebuilt the sales organization with experienced, consultative sales people. And we invested heavily on the engineering side to build best-in-class services and native experiences.

In September, we launched a freemium service in the U.S. and adoption and engagement is increasing rapidly across all areas.

Today, we are essentially a new company, Fuze that just emerged out of a stealth period, but with an underlying platform and architecture that has been proven over several years. We have an amazing new user experience currently on iPad and Mac that will soon be released for iOS, Android, Windows, and HTML5 for browsers. We are now ready to step on the accelerator.

WR: Fuze appears to be focused on direct sales. Anything happening behind the scenes you can talk about concerning channel partners or white-labeling your services?

DO: That’s a big one. Selling exclusively direct is an important consideration in terms of speed, agility, and ensuring customer success. We are a customer-driven organization and have invested heavily in a customer success team, a direct sales teams and robust analytics team. When you sell through intermediaries you cannot ensure that same level of customer attentiveness. And, if you are innovating quickly, it’s hard for a channel to keep pace. The cloud affords you the opportunity to have a closer, direct connection to your customers. That’s not to say there aren’t geographical regions that might be better suited for me to go through a partner, but for now we’re focused 100% on customer success — meaning direct sales is the focus.

WR: You have your Free, Pro, and Enterprise packages. What does each cost (obviously Free is free) and what does each get me?

DO: We have tried to make pricing as straightforward as possible and eliminate the hidden costs that have plagued this industry. Pricing is laid out at www.fuze. com/plans. We also offer discounts for volume and multi-year agreements and have a negotiated price for Internet2 members as part of the Internet2 Net+ program.

WR: One difference between Fuze and Yammer is that the market is already very crowded. We just published a Video-as-a-Service matrix that includes 70 vendors. So you are not the first company to come along and claim to be disruptive. How are you handling the competitive nature of the UC&C markets?

DO: Sometimes a crowded market might not be as crowded as the perception, if you are a disruptive force. That doesn’t mean there are not challenges.

There is an opportunity to redefine how people think about and use these tools, which will broaden the use cases and the business value they can deliver. Enterprise Social Networking (ESN) didn’t exist before Yammer, but people were using existing tools like email and SharePoint in an effort to accomplish similar things. Likewise, the video conferencing market has been around awhile, as has web conferencing, but these tools are not living up to their potential in terms of connecting knowledge workers in a ubiquitous way. We want to make these tools work in a way the incumbents have not.

WR: So how do you make that happen?

DO: We have to execute on our strategy. Users love Fuze, so it is a matter of getting it into the hands of more users. That is where freemium and virality come into play. We are preparing to extend our freemium service globally next month, which will accelerate adoption of the new user experience.

IT loves Fuze because we solve the headaches they have been dealing with for decades with a product that also drives significant value across the business. We can also often save their business a ton of money by consolidating conferencing spend into one application and moving more audio use to our Symphony VoIP platform.

At the end of the day it’s about making our customers successful, which is where our customer success organization factors in. We are not successful unless our customers are truly happy. If we can execute on our strategy and continue making customers happy, we will change this market and how people think about video collaboration.

Read the interview on Wainhouse Research here

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