8x8 2016 Annual Report Download - page 6

The on-premises communications systems traditionally offered by legacy hardware vendors have numerous shortcomings that make them poorly suited for today's
dynamic business environments. In addition to being difficult to deploy and expensive to maintain in multiple locations for a globally distributed workforce, these
solutions may not provide the mobility, resiliency and business continuity capabilities required by customers. BYOD demands from employees further complicate
the delivery of a company-wide communication system. The result is a patchwork communications system with security risks that stretch across the organization.
Security compliance in this environment is extremely difficult, and information distributed across multiple systems increases administrative complexity and
decreases business intelligence visibility.
Because of these inadequacies and security risks, more and more businesses are demanding enterprise-class cloud solutions like ours, which deliver secure, global,
high-quality communications with built-in disaster recovery. Our service offerings are intuitive and easy-to-use, can be deployed rapidly, customized easily and
integrated with other platforms and enterprise applications. We deliver our software as a service via all major Internet browsers and on leading mobile devices.
Virtually all of our customers do not require any dedicated equipment, employees or carriers to use our services - only Internet connectivity and a subscription to
the 8x8 service are required at the customer location.
Cloud Market Opportunity
We believe that the addressable market for our cloud communications and collaboration services is large, growing and underpenetrated. For example, we believe
that the following forecasts, recently published by industry research firms may provide relevant data about the size of the markets addressed by our Virtual Office,
Virtual Contact Center and Virtual Office Meetings solutions:
Frost & Sullivan estimates North American spending on cloud communications and collaboration services will increase at a compound annual growth rate, or
CAGR, of 29% to $14 billion in 2021. (Frost & Sullivan "Analysis of the North American Hosted IP Telephony and UCC Services Market," July 2015).
According to Transparency Market Research, the global unified communications as a service market is poised for staggering growth, and will be worth US$37.85
billion by 2022. The market will expand at a CAGR of 23.4% between 2014 and 2022. (Transparency Market Research "Unified Communication as a Service
Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2014 - 2022," July 2015).
MarketsandMarkets forecasts that the global cloud-based contact center market is expected to grow from $4.68 billion in 2015 to $14.71 billion by 2020, at a
Compound Annual Growth Rate (CAGR) of 25.7% during the forecast period. (MarketsandMarkets "Cloud Based Contact Center Market - Global Forecast to
2020," November 2015).
IDC forecasts the content collaboration software market to grow to a total of $6.2 billion by 2019, representing a 13.4% CAGR for the 2014-2019 period. (IDC
"Worldwide Content Collaboration Software Forecast," December 2015).
The 8x8 Approach
SeamlessCommunicationsoveranIntegratedSoftwarePlatform. We believe that seamless, continuous communications drives more effective employee
and customer engagement and greater business productivity. To that end, 8x8's solutions have been designed to allow users to communicate and collaborate
with others in an integrated and fluid manner. For example, a user who initiates a voice call on a desk phone and then needs to leave the office can
seamlessly transfer the call to a mobile device without the person they are communicating with being aware that the user is no longer at his/her desk.
SingleVendorforAllCommunicationSoftware. Increasingly, customers are seeking multiple solutions from a single vendor, especially in our rapidly
growing enterprise customer segment, to further simplify the deployment and management of their communications infrastructure. Our cloud software
solutions encompass all of the primary communications capabilities required by businesses - voice, video, presence, chat, conferencing, collaboration,
contact center and analytics - providing multiple buying paths and usage scenarios for our customers.
FocusonCustomerCommunication. Many businesses are faced with customer communication challenges due to gaps in internal employee
communication, poor internal collaboration, and little or no contextual data available at the time of customer contact. To help companies communicate
better with their customers, our solutions link customer information with internal collaboration capabilities to provide synchronized customer engagement
from the moment of contact with any individual role within the company's sales, support and other customer-facing organizations.
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