Dialpad Execs Discuss R&D, AI, Changing Partner Landscape
“Approximately 40% of our revenues go back into R&D. That's really unheard of in our space.”
January 9, 2023
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Channel Futures: Interactions in this space are important. We see interactions across Google search, we see interactions coming from social media. How is your platform incorporating all those elements for the future of the contact center?
Dialpad’s Dan O’Connell: I think there are two things to that. One is that users are starting their journey in a contact center on digital and self-service, meaning digital channels might be on social media and might be interacting with a brand such as Twitter or Instagram. Or they’re going to a website like Dialpad and then they want to find their own information and engage with a chatbot. That can be a voice chatbot or just a web chatbot. We have fully integrated our platform today with the ability to serve customers through omnichannel. Two, we provide them with essentially virtual agents. We’ve got these automated in ways that are infused with AI that lets them find the information they need at any moment in time.
CF: When it comes to partners, how do you feel the product offers them something they can present to their customers?
O’Connell: The first is the ability to do what we call true cost. We do voice, video, messaging, contact center on any device anywhere on the world and it’s a single piece of software that manages that. You get the same experience no matter what device you’re using, or who you are within a business. Then the second area gets into the AI piece, which doesn’t just power conversations. We help businesses understand those conversations and automate tasks and drive insights for them. And that for us is ultimately what makes us unique. There’s no other platform that’s going to infer customer satisfaction across voice and digital channels in real time and provide that information to a business. And so those are the things that we’re heavily invested. We want contact center to be proactive, meaning, how do we understand these conversations? How do we do things like digital deflection, but also how do we help businesses understand what’s happening within those conversations?
CF: I know you can’t specifically talk about any ongoing acquisitions. But if you had to project into the future, and you were looking to acquire a new company, what kind of company would you want to acquire to bolster your current business model?
O’Cpnnell: The interesting part about voice and contact center is … there’s even interest from big tech companies that are getting into it more and more. I think a very natural periphery market for this is to get into CRM systems. If you think of Salesforce today, there’s this database, people have conversations, and then information is literally manually written to the to the database. If you were to build the CRM today, you would do it the absolute reverse. You would start with a voice system and power it with speech recognition and NLP and then build the database. It allows you to understand every conversation in that moment in time. I think CRM is a very natural, interesting opportunity, specifically for specific verticals. I think there are opportunities around gamification. Those would be periphery markets that become interesting over time.
CF: When it comes to partners, do you feel as if the role of partners is changing and how does that impact how they relate to your company?
Dialpad’s Mike Kane: It is changing. And it’s interesting. If you go to these conferences and talk to the partners, they all understand that the use cases are challenging them on different skill sets that they haven’t had necessarily in the past. And I would argue the better partners are embracing it because they understand they’re going be much stickier with their customer long-term. I’d say the better partners are leaning in, and the deals now from our partners are getting quite significant because they already have the existing relationship with large enterprise customers. We’re establishing some interesting business value conversations they’re able to bring to their customers that’s impacting their customers revenue growth.
When it comes to contact centers, they’re able to increase representative productivity and reduce their churn. If we do head into some tightening of the economy, more than ever you need to take care of your customers and you can’t have that churn. And again, that’s why I think we’re seeing a lot of attention right now. Partners realize that they’re leaning in with us because we can help them do that.
CF: Some of the companies have been in this market for 20 or more years. They have a storehouse of data that they’re able to capitalize on. I was wondering, how does a younger company in the industry handle competing with a company that has 20 years’ worth of call and text and other data at their disposal to feed into AI?
Kane: I think the future of AI is all around your data set. However, just because you have a bunch of data, doesn’t mean you have the teams to actually understand it and know what to do with it. Or teams that can build models or how to build it into a third party. How accessible is that data? This gets into the point about the architecture of the business. A company might have a monolithic architecture and data might be in different silos, not easily accessible. Again, just because you have the data, doesn’t mean you know what to do with it. Do you have the experts in-house that can build the relevant models? You could have a lot of data, but is it useful data?
CF: We’re in an unusual economic situation, and we’re not certain that a recession is headed our way. How do you address concerns partners have who want to sell your product but are not sure this is the right investment at the right time?
Kane: So, approximately 40% of our revenues go back into R&D. That’s really kind of unheard of in our space. We’re basically future-proofing our platform for the next decade. Most publicly traded companies are about 15% and 20% at the high end. We’re double that. When you are looking at solutions, a partner should ask: Who is going to be in this for the long haul? We do updates on the product literally every single Friday. All our customers get notified. The notification includes all the updates that happened, and the scale of disruption and features that we deal with on a weekly basis is pretty crazy. When you innovate that fast, you must make sure your partners are updated so that they’re able to share that with their customers. I would say especially now when you’re looking at an economy tightening, you want to choose your partner even more wisely and for the long-term journey.
CF: What does the future product landscape look like for Dialpad? Can you give hints about what you’re working on?
O’Connell: We can give some glimpses of things that are to come, especially regarding voice conversations. That’s the ability for every business to just have inferred customer satisfaction. Basically, it completely does away with any need to send out SMS surveys or email. We’ve got obviously some really unique launches that will happen around virtual agents and around a smart IVR system. But I don’t want to give away too much. I think we’ve got some game-changing announcements that are coming specifically around QA, the QA process and around score carding, and being able to go and automate that. And as I said, I think we’ve made all the right investments and acquisitions around owning the AI strategy and what we can do with that around semantic search, for example.
CF: What the next big opportunity for your company in five to 10 years?
O’Connell: The next big opportunity is around the conversational intelligence piece. How do you derive insights from them and how do you automate workflows from them? Those are things that we’re actively working on. And as I said, the next piece is getting into work productivity and CRM. There are even some interesting opportunities around the metaverse that we’re starting to look at.
CF: What the next big opportunity for your company in five to 10 years?
O’Connell: The next big opportunity is around the conversational intelligence piece. How do you derive insights from them and how do you automate workflows from them? Those are things that we’re actively working on. And as I said, the next piece is getting into work productivity and CRM. There are even some interesting opportunities around the metaverse that we’re starting to look at.
Last month, Dialpad announced a $50 million investment into the continued research and development of artificial intelligence-related technologies. The goal: to accelerate the development of features to automate business processes and provide predictive insights.
In the next five years the company wants to take AI “to the next level” said Craig Walker, founder and CEO.
For Dialpad, that may not be an audacious task.
The company disrupted the collaboration market years ago, company officials said, by developing and releasing the first real-time speech recognition engine for enterprise conversations. Dialpad has since extended its AI capabilities by delivering industry-first features such as real-time assist (i.e., suggested answers to questions), virtual agents (AI-powered self-service web and chatbots), and AI CSAT (i.e., inferred customer satisfaction from service conversations), among others.
Dialpad’s Mike Kane
In this interview with Channel Futures, Dialpad’s Mike Kane (global channel chief) and Dan O’Connell (chief strategy officer) discuss the process of developing AI for their brand. They also talk about how the fastest growing part of the business is the contact center. Finally, they delve into how the role of partners is changing and what that means for the company’s relationships.
Dialpad’s Dan O’Connell
Channel Futures: How do you differentiate yourself from your competitors?
Dan O’Connell: There are really three technologies I would classify when people kind of talk about AI. The first one would be automated speech recognition, which would include how one gets transcripts. It all starts from there. We do our own speech recognition in-house. We do monthly benchmarking against pretty much other speech recognition providers out there. We outperform all of them in terms of accuracy. People that use Dialpad know that they’re going to get the highest level of accuracy in terms of just what a transcript looks like.
The next part gets into natural language processing. When it comes to sentiment analysis, we infer customer satisfaction from conversations. All of those are proprietary models, meaning those are built specifically on Dialpad data for specific users of Dialpad. We’re doing models that are designed for health care businesses for measuring customer satisfaction. We do different models for businesses that are in finance or ecommerce. One of the biggest differentiators for us is we do all of this in-house; we’re not using third parties for it. They’re not generic models. They are built and trained on specific use cases.
And then the third technology gets into what’s called semantic search, which is how you essentially retrieve information from a knowledge base and present it for one use case. The key differentiator for us is, we don’t partner with people. We think this is fundamentally different. We think it’s really, really important to do this in-house. And we think it’s important to do it in-house because you can control your own destiny and you can derive better accuracy. Better accuracy means more value for customers.
See our slideshow above for the rest of the conversation with Dialpad.
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