8x8 2010 Annual Report Download - page 4

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The 8x8 voice and video broadband phone service enables broadband Internet users to add digital voice and video
communications services to their high-speed Internet connections. Customers can choose a regular direct-dial phone number
from any of the rate centers offered by the service and then use an existing telephone to make and receive calls over a standard
broadband Internet connection. All 8x8 telephone accounts come with bundled voice mail, caller ID, call waiting, call waiting
caller ID, call forwarding, hold, line-alternate, 3-way conferencing, web and voice-prompt access to account controls, and
online billing. In addition, we offer videophones and video telephony software in conjunction with our service plans that
connect to a customer’s high-speed Internet network to deliver all of the voice features above, as well as unlimited video calls,
to any other 8x8 videophone customer worldwide.
The 8x8 Virtual Office suite of business phone services offers small and medium-sized businesses feature-rich, HD (high
definition) audio-enhanced communications services that eliminate the need for traditional telecommunications services and
business phone systems. The 8x8 Virtual Office solution essentially replaces an on-premise PBX (private branch exchange),
telephone system with a hosted, Internet-based business phone service that is delivered over a managed or unmanaged Internet
connection. We sell pre-programmed IP telephones with speakerphones and a display screen, in conjunction with our Virtual
Office service plans, which enable our business customers to access additional Virtual Office features through on-screen phone
menus. The 8x8 Virtual Office Pro unified communications solution, introduced in January 2010, bundles the 8x8 Virtual
Office hosted PBX phone service with other essential businesses software communications services such as web conferencing,
call recording and archiving, Internet fax, chat, voicemail and presence management and a mobile iPhone/iPad extension in a
competitively priced offering. 8x8 Virtual Office Pro takes the functionality of an already powerful hosted PBX phone service
to a new level with high fidelity HD voice, remote accessibility via any web browser or smart phone and integration with vital
collaboration tools.
Available Information
We maintain a corporate Internet website at the address http://www.8x8.com. The contents of this website are not incorporated
in or otherwise to be regarded as part of this Annual Report. We file reports with the Securities and Exchange Commission, or
SEC, which are available on our website free of charge. These reports include annual reports on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K and amendments to such reports, each of which is provided on our website as soon
as reasonably practical after we electronically file such materials with or furnish them to the SEC. You can also read and copy
any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can
obtain additional information about the operation of the Public Reference Room by calling the SEC at 1.800.SEC.0330. In
addition, the SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC, including 8x8.
Industry Background
The technology we employ to deliver our service, known as Voice over Internet Protocol (VoIP), enables communications over
the Internet through the compression of voice, video and/or other media into data packets that can be efficiently transmitted
over data networks and then converted back into the original media at the other end. Data networks, such as the Internet or
local area networks, or LANs, have always utilized packet-switched technology to transmit information between two
communicating terminals (for example, a PC downloading a page from a web server, or one computer sending an e-mail
message to another computer). IP is the most commonly used protocol for communicating on these packet switched networks.
VoIP allows for the transmission of voice and data over these same packet-switched networks, providing an alternative to
traditional telephone networks which use a fixed electrical path to carry voice signals through a series of switches to a
destination.
As a result of the potential cost savings and added features of VoIP, consumers, enterprises, traditional telecommunication
service providers and cable television providers view VoIP as the future of telecommunications. VoIP has experienced
significant growth in recent years due to:
• Demand for lower cost telephone service;
• Improved quality and reliability of VoIP calls due to technological advances, increased network development and
greater bandwidth capacity; and
• New product innovations that allow VoIP providers to offer services not currently offered by traditional telephone
companies.