Outsourcing: Chris Coles, President And CEO Of HyperQuality (Part 4)

By Sramana Mitra and guest author Aditya Modi

Sramana: What is the employee split between the technology and the services organizations? What is the total head count? How many employees are in services and how many are in products?

Chris: The total number of employees is a bit more than 600 right now. I would say on the technology side there are probably about 70. So, [that includes] the software and the delivery infrastructure.

Sramana: You have about 530 employees in services, including the listening agents and the professional services, and then you have about 70 on the technology side?

Chris: Yes, and then the rest would be more on the overhead side – finance and related areas.

Sramana: In terms of building this business, what was the adoption like? Eight years ago when you started bringing this proposition to your customers, what was the reception like for this kind of SaaS technology-enabled service value proposition?

Chris: When it was introduced — and this predates me – it was very much of an outsourcing play with a technology tool dimension to it.  The business model has evolved. SaaS has become more of a mainstream concept. There are two ways to move in the market with a software as a service offer alongside the people, skilled labor side. I think it is something that has been fairly evolutionary and probably only in market for about the past two years. We didn’t start with that model, but we’ve obviously evolved to it. I think that a good bit of that push came from existing accounts that wanted to have their own folks be more involved or in addition to us. The software is sensible to other people within those enterprises, and then it also appeals to the smaller end of the spectrum, and to the big enterprises that still value this kind of software tool to do what they need to get it done, but they don’t not necessarily need the skilled labor portion.

Sramana: You are saying that in the cases where customers decide to do more of the work in-house, they take the role of the professional services piece of your organization internally, use your software, and use your listening agents and that is the way you manage the engagement?

Chris: No, in some instances they’ll be their own listeners.

Sramana: They only use your software?

Chris: Correct. The model allows for the bundle, and the bundle allows for à la carte. We do situations where we listen but do not use our software, because they have a solution they want to use. The bulk of customers would be those who take our listening and our software, but it is not the only way to do it.

Sramana: I see. So, when you decouple the software from the listening agents, what do you charge for that?

Chris: Again, it depends on volumes and the terms of the contract, but it is pretty consistent with what you would expect in proceed or subscriber level licensing in most conventional SaaS models.

Sramana: That range is very wide. Right now, I am working with companies that are selling $10 a month and $20 a month subscriptions to very high-end functionalities that used to cost a lot more than that. Where exactly are you along that spectrum?

Chris: Well, the exact part is really tough to answer but it’s probably, for discussion’s sake, more in the $50 to $110 range, depending on volume.

Sramana: Per seat?

Chris: Per seat; not per agent but user.

Sramana: Per seat, per month, yes?

Chris: Yes.

Sramana: OK, got it.

Chris: Just to be clear, that is not an agent price. An agent isn’t a user, typically.

Sramana: Where does the business go from here? What is the split from a revenue point of view between technology and services? We did the employee split. What is the revenue split?

Chris: That is something that we haven’t commented on publicly at this point, so I can’t go there on that one. It’s relatively new on the SaaS side, so it is still the minority component of the revenue mix.

This segment is part 4 in the series : Outsourcing: Chris Coles, President And CEO Of HyperQuality
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