Portuguese Company Eyes U.S. Call Center Customers

By Nick Wakeman, Staff Writer



LISBON, Portugal — A small software company here aims to grab a share of the searing U.S. market for government and commercial call centers through a strategy of teaming relationships and direct sales.

Easyphone of Lisbon, Portugal, already has signed up Andersen Consulting of Chicago, KPMG of New York, and Pricewaterhouse-Coopers of New York as systems integrator partners, said David Musser, vice president of global marketing for Easyphone.

Earlier this month, the company hired Peter Kenyon from one of Easyphone's competitors to serve as president for its North American operations, Musser said. Kenyon was previously vice president of global field operations for Quintus Corp. of Fremont, Calif.

The privately held company, founded in 1988, will have about $12 million in revenue this year compared to $6 million in 1997, Easyphone President Carlos Quintas said.

Easyphone, which currently does most of its business in Europe, sells an integrated software package that performs functions such as handling incoming and outgoing phone calls, telemarketing scripts, call routing and data capture.

The company has designs on the U.S. market because the United States commands 60 percent of the global market for call centers, which are facilities that use phone operators to perform customer service and telemarketing tasks.

The worldwide market for call centers, including hardware, software and services, is $8.5 billion in 1998 and growing at 26 percent a year, according to G2R Inc., a Mountain View, Calif., research firm.

Technological advancements are one reason for the growth. They have made it cheaper to field smaller call centers, Musser said.A typical call center had to have at least 50 seats, or operator workstations, to be cost effective. But NT server-based systems now can be as small as 10 seats, he said, allowing smaller companies and government agencies to build call centers — the market Easyphone wants to target, he said.

Easyphone executives predict the United States will be the company's biggest market going forward, generating about 50 percent of revenues by 2000, Quintas said.

The company has six employees in North America but expects to hire another 35 in the next six months. Kenyon will be located in a new office in the Silicon Valley region; other North American offices are in Dallas and Toronto. Easyphone has 115 employees, Musser said.

Quintas said he expects Easyphone to experience 100 percent a year revenue growth through 2000. The company should hit the $50 million a year mark by then, he said.

To boost its prospects, the company has entered into a partnership with telephone switch maker Alcatel of Paris, and negotiations are under way with Northern Telecom of Toronto to include Easyphone software with the call center switches it sells, Musser said.

Customer care types of call centers are growing faster than telemarketing operations, said Roberto Lartigue, a G2R analyst.

"Companies are realizing it is easier to retain clients than it is to acquire new ones," he said.

Easyphone plans to take customer care systems to the government market in the form of services to citizens, Quintas said.

"Governments are changing their attitude toward the public," he said. "They will deal with citizens the same way any company deals with their customers, which means call centers will play a central role."

Musser said Easyphone already has worked on projects in developing countries. For example, in Mozambique the government created call centers to handle a variety of citizen services, such as hooking up electricity and reports of problems with water and sewer systems.

"We are going to package that [type of solution] and go after the government markets here," he said.

Easyphone is targeting state and local governments and federal agencies, Musser said. He expects the government market to provide about 15 percent of Easyphone's revenue in the United States.

Helping Easyphone with its push into the U.S. market is its suite of integrated call center software, which provides customers with one-stop shopping instead of having to go to several vendors to get the elements needed for a center, Musser said.

That was one of the features that attracted InSight Capital Partners of New York, said Ramanan Raghavendran, a partner at the venture capital firm. InSight, which specializes in software companies, has a minority stake in Easyphone.

Raghavendran would not specify how much his company invested in the company, but noted typical investments range from $5 million to $20 million. Raghavendran estimated there are 80,000 commercial call centers in the United States, but only about 15 percent are using specialized software.

Easyphone competes with several other companies in different segments of the call center software market, Quintas said. For example, it competes with Genesys of Paris in the routing and middleware software space, and with Melita Inc. of Norcross, Ga., and Davox Corp. of Westford, Mass., for outbound dialing and campaign management.

But a huge competitor looms on the horizon — Oracle Corp. of Redwood Shores, Calif. Oracle bought Versatility Inc., a Fairfax, Va., developer of customer interaction software, which is a component in call centers. Oracle paid about $12 million for Versatility in August.

"In a year or so, Oracle is going to say they have a complete package," he said.

But Musser isn't intimidated by the prospect of more competition. With its head start, Easyphone should be able to establish strong relationships with integrators and customers, he said.

"And who knows, maybe Oracle will buy us," he quipped.