CEO Spotlight.

David Gould Chairman of the Board and CEO Witness Systems

This month, CEO Spotlight speaks with David Gould, Chairman of the Board and CEO of Roswell, Georgia-based Witness Systems (www.witness.com), a provider of performance optimization software.

CIS: How's the Blue Pumpkin integration coming along?

DG: The combination has been very successful. We retained our key people, have been able to extend relationships with key partners, garnered very favorable feedback from our customers, and have delivered strong financial results. Most importantly, we've leveraged the combination to bring to market the first integrated workforce optimization solution.

At the time of the acquisition, we discussed our new workforce optimization platform as a transformational event in the market. In September we launched Impact 360--the first software package to combine actionable learning and performance management with the anchor segments of quality monitoring and workforce management. And it is indeed redefining the market. Today we're the only supplier capable of offering customers a powerful and comprehensive workforce optimization solution. Coupling this game-changing capability with our historical strength is proving to be a compelling arrangement.

CIS: What strengths do you think this acquisition will bring to Witness Systems?

DG: There are four primary areas that contribute to the strengths of the acquisition. The people who have joined Witness Systems are the first strength. Their talent in the workforce management industry is a significant advantage for our customers and partners. Their skills and knowledge are a key reason why there are limited responses available to our competition.

The second strength is attributed to the customer base, which ensures a continuous stream of feedback regarding our direction. Combined with our people, we have a tremendous amount of capability to bring to the table.

Third, we have the ability to offer our partners a broader solution to market, which makes it easier for them to invest in our relationship.

And finally, we added the leading application in this market segment, with significant technological advantages over the other legacy suppliers.

By leveraging these strengths, we are leading a transformation of this market. Our new Impact 360 combines the best from both organizations. It redefines the market landscape for workforce optimization technology by enabling global organizations to deploy a holistic and streamlined framework, accompanied by a feature-rich solution set with more speed and confidence than any combination of point systems in the market today. Organizations now have an end-to-end workforce optimization solution that removes the barriers between siloed customer service functions, so businesses can capture, analyze and act on cross-functional information concerning workforce performance, customer interactions and customer service processes.

According to research conducted by Datamonitor, workforce optimization is a global market projected to reach $1 billion in 2006. It is reinventing how traditional technologies should be paired, and redefining the alignment of strategy, people, processes and technology with the common goal of building loyalty. Managing the balance of an enterprise's objectives is difficult enough, yet it is complicated further by the fact that it takes many different and often siloed technologies within the enterprise to service the customer. Now, through the combined offering, customers can optimize people, processes and technology along the complete workforce continuum--from workforce management forecasting, scheduling and customer interaction recording to performance management and e-learning.

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CIS: Witness Systems seems to be tailoring solutions to the small to medium-sized business (SMB) market. Is this becoming a lucrative part of the call center business?

DG: The bulk of our business, historically and today, comes from the large-enterprise market. However, with the emergence of VoIP and the ability to offer more streamlined, cost-effective packages, we see a tremendous opportunity in the midmarket. The SMB market is the fastest-growing segment. In fact, small and medium-sized businesses have the largest number of call centers in North America. According to Datamonitor, there are more than 25,000 call centers in the 31-100 seat call center segment. We've done well over the past few quarters establishing channels and tailoring solutions for this emerging market. The combination with Blue Pumpkin helps here, as the application truly addresses the needs of both smaller and enterprise-class customers. We view this market as a natural complement to our traditional Global 3000 business.

CIS: There seems to be a recent trend of targeting contact center solutions directly to the vertical markets. Is Witness Systems exploring solutions for these markets, such as utilities, financial services and healthcare?

DG: Witness Systems has quite a few customers in the utilities, financial services and healthcare markets, including Alabama Power, Wells Fargo, LloydsTSB Asset Finance Division and Tenet Healthcare. These industries fall into our top 10 verticals based on analysis of our customer base and the way that we evaluate opportunities. Financial services are particularly strong, as the market is often an early adopter of workforce optimization solutions. Business issues such as deregulation, privacy regulations and increased competition are drivers for workforce optimization solutions in the utilities and healthcare sectors, so those are key areas of opportunity for contact center solutions. Other top verticals include insurance, communications/media, business services, manufacturing and retail.

CIS: What sort of developments are we likely to see in Witness Systems' future?

DG: Witness Systems will continue to extend and develop its workforce optimization platform to include deeper and broader solution capabilities that optimize the customer service value chain for our global customers. As you're seeing with the release of Impact 360, we'll be delivering substantial enhanced capabilities derived from our new packages. Our customers and partners see an even greater value proposition working with a single vendor that can provide significant economic, customer support and solution integration benefits. Witness Systems will stay in the forefront of new optimization technology for emerging growth markets such as IP telephony, measuring customer service and actionable learning. We've always been regarded as the technology and thought leader for our market. We take this responsibility seriously and intend to continue to raise the bar.