8x8 2015 Annual Report Download - page 12

These competitors include AT&T, CenturyLink and Verizon Communications. These competitors are substantially larger and better capitalized
than we are and have the advantage of a large existing customer base, and larger marketing budgets than we have. Moreover, they also provide
some of the broadband services that are required to use our service, which is a significant competitive advantage. However, the services offered
by these competitors are typically more expensive to adopt, typically require on-premise implementations and require regular hardware and IT
infrastructure upgrades. Furthermore, these competitors typically provide limited functionality needed for our customers to integrate their
communication systems with their IT infrastructure, therefore requiring additional system integration investments and set up.
A deployment of a collection of services offered by these competitors equivalent to a similar deployment of our services is likely to be more
expensive and difficult to manage. In addition, in a distributed office setting, on premise solutions typically will be more expensive due to the
requirement to locate on premise equipment in each office location, and the incumbent telephone companies may not have service offerings
across the business's entire office footprint due to the geographic centric business model of traditional telecommunications companies that limits
their terrestrial service offering to geographies where they have physical network facilities. By way of example, the largest incumbent telephone
exchange carriers do not have nationwide coverage across the United States for their traditional fixed line telephony service.
Operations
Our Infrastructure Manager consists of data management, monitoring, control and billing systems that support all of our products and services.
We have invested substantial resources to develop and implement our real-time call management information system. Key elements of our
Infrastructure Manager include a prospective customer quotation portal, customer provisioning, customer access, fraud control, network security,
call routing, call monitoring, media processing and normalization, call reliability, detailed call record storage and billing and integration with
third-party applications. We maintain a call switching platform in software that manages call admission, call control, call rating and routes calls
to an appropriate destination or customer premises equipment.
Network Operations Center
We maintain a network operations center at our headquarters in San Jose, California and employ a staff of approximately 50 individuals with
experience in voice and data operations to provide 24-hour operations support, seven days per week. We use various tools to monitor and
manage all elements of our network and our partners' networks in real-time. We also monitor the network elements of some of our larger
business customers. Additionally, our network operations center provides technical support to troubleshoot equipment and network problems.
We also rely upon the network operations centers and resources of our telecommunications carrier partners such as Level 3 Communications,
Inc. and data center providers such as Equinix, Inc. to augment our monitoring and response efforts.
Customer and Technical Support
We maintain a call center at our headquarters in San Jose, California and have a staff of approximately 100 employees and contractors that
provide customer service and technical support to customers. In addition, we have outsourced some customer support activities to third parties.
Customers who access our services directly through our website receive customer service and technical support through multilingual telephone
communication, web-based and "chat" sessions, and e-mail support.
Interconnection Agreements
We are a party to telecommunications interconnect and service agreements with VoIP providers and PSTN telecommunications carriers, such as
Level3 Communications, Verizon Communications and Inteliquent. Pursuant to these agreements, VoIP calls originating on our network can be
terminated on other VoIP networks or the PSTN. Correspondingly, calls originating on other VoIP networks and the PSTN can be terminated on
our network.
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