8x8 2005 Annual Report Download - page 7

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• Offer the best possible service and support to our customers with a world class customer support
organization. We have established a call center and customer support group at our headquarters in
Santa Clara, California and have outsourced call center operations in Syracuse, New York and
Phoenix, Arizona. We are also investing in significant upgrades to our existing back office
infrastructure to enhance the support we can provide to new and existing subscribers, as well as our
distribution partners. In an emerging industry with world-changing technologies, we are focused on
our customers and their experience with Packet8.
• Develop additional distribution channels. We have established relationships with resellers, retailers
and other distributors of telecommunications products. To further accelerate growth of our Packet8
residential and business offerings, we intend to build upon our existing relationships and establish new
relationships with distributors, value added resellers and system integrators, other service providers,
equipment manufacturers and retailers to make our products more readily available and accessible to
potential customers of our service.
Our Packet8 Solution
Packet8 is an Internet-based communication service that works over virtually any high-speed Internet connection in
the world, and allows calls to or from any phone in the world, whether that phone is an IP phone or a regular public
switched telephone network, or PSTN, phone. Packet8 utilizes IP communication endpoints (i.e., a desktop adapter)
which, when used in conjunction with the Packet8 network software and any standard telephone, enable plug and
play installation and a familiar dialtone user interface. The Packet8 service also uses web-based technologies to
enable account setup, account management, billing and customer support. We have developed a significant amount
of the technology underlying our Packet8 service, which works with third party carriers to terminate VoIP calls on
the PSTN network. As part of the Packet8 service, we currently resell private-branded telephone IP terminal
adapters, which allow a regular analog telephone to be connected to an IP network, IP videophones, and
preprogrammed business telephones. These devices, some of which are manufactured by certain of our former
semiconductor customers, utilize our licensed semiconductor technology and certain unique software modifications
to the protocol and application code that enable them to connect to 8x8’s Packet8 IP services platform. The designs
of these devices are based on our former semiconductor reference designs. We continue to enhance and develop
new functionality in the software code that is embedded in these devices.
Products and Services
PACKET8 VoIP & VIDEO TELEPHONE SERVICE
Our Packet8 VoIP telephone service was introduced in November 2002. Customers enter into a service agreement
with us, and select a calling plan based on their anticipated use of the service. Service plans provide various minutes
of usage, up to unlimited, for calls in North America and Canada that are made to non-Packet8 customers.
Subscribers are charged at a per-minute rate for international calls to non-Packet8 customers, and, depending on the
level of plan selected, may be charged for calls to the PSTN if they exceed the minutes allowed under their plan.
Depending on the service plan selected, 8x8 will either sell or provide at no cost to the user an 8x8 Desktop
Terminal Adapter or Desktop Videophone to use with the Packet8 service. Each subscriber is assigned a telephone
number in any of the area codes and underlying rate centers currently offered by the service. We currently offer area
codes in forty-five U.S. states and the ability for a subscriber to port a number from another service provider. All
Packet8 customers receive access to a variety of telephone features, including voice mail, caller ID, call forwarding,
call waiting, 3-way calling, online account management and billing, international call blocking and caller ID
blocking. We are also offering video over IP service using our DV326 videophone product which includes all of the
voice features described above plus unlimited video calls to any other Packet8 videophone subscriber anywhere in
the world. We currently offer enhanced 911, or E911, service in over 2,000 rate centers as an optional feature on all
Packet8 calling plans. A Packet8 E911 call is routed as 911 emergency traffic and is accompanied by caller
information, which enables emergency personnel to ensure that callers receive the exact same response that they
receive from 911 services provided by landline incumbent telephone carriers. The Packet8 E911 implementation
routes a subscriber's call directly to a 911 operator and eliminates unnecessary dialog about callers' whereabouts,
which is vital in cases where a caller may not be able to verbally communicate due to an emergency condition.
PACKET8 VIRTUAL OFFICE BUSINESS TELEPHONE SERVICE