The hottest Genesys, the best is yet to come

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Genesys: the best is yet to come

translated by Lao Qin Ye

CTI Forum () news on September 6 (compiler/Lao Qin): investors' interest marks the belief that Genesys will be the main beneficiary of the transfer from local deployment systems to cloud services

genesys announced some time ago that Hellman Friedman, a private equity company, bought a minority stake from existing investor permira and will invest about $900million - which means that the investment valuation is about $3.8 billion

the valuation of $3.8 billion is quite impressive, because when the company was spun off from Alcatel lucent in 2012, it was $1.5 billion. In just four and a half years, Genesys' valuation has increased by more than 250%

first, let's put the figure of $900million into the whole environment. At the time of writing this article, the market value of interactive intelligence, Genesys' competitor in the contact center cloud computing market, was 950million US dollars. The market value of five9 is $633 million, and the price of nice's acquisition of contact is about $940 million

in view of the new market valuation of Genesys, H F now owns about 24% of Genesys. Permira and other original investors continue to own a majority stake in the company

what caused the valuation to increase to this extent? What has Genesys done in the past four and a half years

in a conversation with industry analysts, Tom eggemeier, President of Genesys, refused to provide the company's 2015 revenue, which had never been disclosed before as a private company. However, he said that based on a constant currency, the company's performance increased by more than 8% in 2015. Genesys reported that its revenue in 2014 was $850million, and published a report that its revenue in 2015 was about $900million (US $918 million, no exchange rate adjustment means an 8% increase)

when it was separated from Alcatel lucent, genesy recalled that when it was still affiliated with Bayer in 1967, its revenue was about $550 million in 2011, and then achieved double-digit growth in 2012. In the past four and a half years, revenue has increased from $550 million to $900 million, a good double-digit annual growth rate. Let's take a closer look

genesys made a series of acquisitions in the following years, 2013, 2014 and 2015, which affected the company's performance. In 2013 alone, Genesys acquired five companies: utopy, angel, soundbite communications and vorantechnologiea. Subsequently, eight additional acquisitions were made in 2014 and 2015, most recently speech storm

based on some rough calculations and assumptions, it is estimated that these 13 mergers and acquisitions have brought about $150million in annual revenue to Genesys. Starting from $550million at the end of 2011, today's $900million means an organic growth of $200million. We can assume that the organic growth of Genesys has averaged between 6% and 7% annually since 2011

so why does HF invest in Genesys instead of another cloud contact center company? The competitors I mentioned above have posted much higher annual growth rates. Hellman and Friedman are keen to see the next stage of growth with Genesys, tarimwasim, managing director of HF, said in a media statement

as we can see, in the past few years, there has been a huge growth in the cloud contact center deployment market. Like the lyrics in Sinatra songs, the best is still to come

it can be said that today, only about 10% of seats are supported by cloud. If we think cloud is the final deployment mode, there will be 10 to 15 million seats in the world that need to be migrated. In the future, the cycle counter will count the number of cycles of alternating load. It can be said that millions of seat licenses will be produced in 5 to 10 years. Even if we assume that only 50% of the seats are through the cloud during this period of time, we still have millions of licenses to sell, implement, upgrade and maintain

we choose market leading enterprises as partners. We only look at hundreds of transactions and investments. We believe that the concept of customer experience will become more and more important, deepadvani, another managing director of HF, said at a recent analyst meeting

in addition, Advani pointed out that we tend to hold our investment for a long time, because we need a long-term observation. HF believes that the cloud contact center will continue to grow, and Genesys will be the main beneficiary of the transfer from local deployment systems to cloud services. Marlin partners made a similar bet to invest in liveops earlier this year, and nice and contact are going to do the same. The good news is that there can be many winners in this field

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