Altigen Communications, Inc. (ATGN) Earnings Call Transcript & Summary

Greetings. Welcome to the Altigen Communications Investor Day. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Jerry Fleming, Chairman and CEO. Jerry, please go ahead.

Thank you, operator, and hello, everyone. Thank you for joining us for Altigen's inaugural Investor Day. We've got a full schedule today in this wonderful market climate. But you will see presentations from industry keynote speakers as well as the Altigen management team during the session today. And our goals are to communicate and educate the audience on the various markets targeted by Altigen; the Altigen solutions and how they address those markets; and then finally, the overall Altigen business opportunity. Okay. Give me 1 second, guys. Sorry, I'm a novice at advancing slides on this platform. So before I start the presentation, I need to first review the obligatory safe harbor statement. So I'll trust everyone can read this much better than I can at the moment. So safe to say that all of the futures will be disclaimed. So we move on to the next slide. So as I mentioned, we do have a full agenda. We're going to start with an Altigen company overview, and then we're going to follow that with keynote presentations from Microsoft, Fiserv and UC365. After that, we'll provide a deeper dive on the Altigen business strategy, our suite of customer experience solutions and the corresponding business opportunities. Then we'll conclude with a formal Q&A session. Everyone on the webcast has the ability to ask questions at any time, so please feel free to do so. Our moderator will collect the questions so we can respond to them either during the presentation or during the Q&A session. Okay, before we introduce our keynote speakers, I want to take a few minutes to review the company, both where we've been and where we're going. So we are -- we have been historically very much a Microsoft-centric organization, and we do believe we're Microsoft communications experts. We've been developing on the Microsoft platform our communications solutions for more than 20 years. We've, over the years, deployed more than 100,000 VoIP endpoints with more than 20,000 active cloud subscribers today. And we are a bit unique in that we're both a developer and a managed services provider. So we deliver communication services, and these are SIP trunks or, in Microsoft terminology, direct routing, which means this is your connectivity to the external telephone network. We build applications, unified communications, customer engagement and contact center, collectively we refer to as customer experience solutions. And we have a professional services organization that provides migration, deployment, training and support for our customers. We're a relatively small company, but we do have global sales, service and support presence. We're headquartered in Silicon Valley. Our European headquarters is in the U.K. And we also have a team of folks in Taipei, Taiwan providing QA work as well as support. And as well as in addition to Asia Pacific, we have quite a large group of developers in Kathmandu, Nepal. Sorry, I'm just waiting for the slides to advance. So for those of you not immediately familiar with the Altigen story, we did start out as an on-premise provider of PBX business phone systems. For the first 10 years or so, Altigen provided a very much hardware-centric PBX with 0 recurring revenues. And I'm looking at the box on the left. So if that doesn't sound like a very attractive business model, it didn't sound like that to me either. So when I joined the company in 2007, we began the shift to a software-centric business model with annual recurring revenues in the form of software assurance, which is also commonly referred to as software maintenance. This took some time to accomplish, honestly, primarily due to some internal forces from our founder who didn't like the direction of the company, and who, by the way, is no longer with the company as a result. By our 2015 fiscal year, we were well on our way to eliminating all computer hardware from our portfolio, and we began the migration of customers to our cloud-based all-new software platform. And that was what we consider Phase 1 of the company transition. We're now in the next phase of the evolution, which is 100% focused on the cloud. Over the next few years, we will eliminate all on-premises license sales and software maintenance in favor of the cloud. At the same time, we are significantly expanding our product portfolio from simply hosted PBX, which is what we've done historically, to a complete suite of cloud-based customer experience solutions known in the industry as CX as a Service. So that brings me to the Altigen investment highlights. So we believe that Altigen right now is a company that is poised for growth with quite a large new portfolio of unified communications, contact center and customer engagement solutions and services, again, collectively referred to as Contact Center as a Service. Okay? Sorry, I heard some background music, so pause for a moment. We also have quite a number of new solutions coming out for Microsoft Teams, both in the contact center and customer engagement category, that we expect will generate significant new business opportunities in that category. We've had a long-standing relationship with Fiserv, so we have many new solutions that we'll talk about that are also going to be marketed by Fiserv. And with that strategic partnership, we expect to drive significant new revenue in the fintech space. And finally, as we reported earlier today, our acquisition of ZAACT Consulting is going to create many new enterprise and vertical market opportunities for us as it's, for both of those markets, absolutely critical to deliver services around the software and not just be a software provider. And we'll talk more about that as we go forward. Okay. So at this time, I'm going to turn the call over to Mr. Scott Perham from Microsoft, and he's going to talk about what it really means to build native Microsoft Teams applications using the intelligent bots. Scott, the floor is yours.

Thank you very much. Thank you. My name is Scott Perham. I'm a cloud solution architect at Microsoft. My role is to work with our strategic partners in building applications for Teams. The result of that is usually end up in the Teams store so that our customers can deploy very easily and make sure they use the -- as many of the functionality of the features within Teams to bring their application in and to make it a seamless experience and then increase productivity for the end users. So I'm going to cover a few kind of fairly high-level topics around Teams before I dive in to the value of the platform and the extensibility points and where bots really add value to that. So let's wait for the transition. I'm also not used to using this platform. Okay. So Teams, as we know, is a platform. It's not just a single application or a tool, it's a platform for collaboration. It's largely becoming the center for collaboration within an awful lot of organizations. And more and more, we're seeing that it's not just center of collaboration, it's also becoming the hub for productivity increases as well. And that's done through a number of things. So the primary use case for a lot of organizations around Teams is chat. As you can see there, it's -- that's communicating and collaborating with individual groups of users. This could be within meetings, where similar to that, right now, we're having a group people via webinars, possibly events and those kind of things. For applications, like contact centers, call centers, there, you're able to use Teams to directly receive and make calls. It's very useful for agents who don't want to leave the Teams environment and can work directly within that environment. And finally, file management, the things that -- there's a deep -- a leap between Teams and SharePoint. All of this stuff is kind of seamlessly integrated so it makes using it really, really simple. Now all of that stuff is native to Teams. This is what you get kind of out of box with Teams. But a huge amount of the Teams ecosystem is built up using third-party applications. Now there are obviously a number of first-party applications that anyone who's used Teams would have seen before, but the majority of applications are built by our partners, and they're brought to Teams usually via the app store. And so this is what we're going to talk about today, is really about how bringing in third-party applications, typically using bots, to surface that data and to make the application available within Teams, within that single pane of glass that the customer is using all day long, increases productivity. So as we talked about -- let's wait for the slide transition. So the primary use case or the primary prime reason that people use Teams and bring their applications into Teams and customers end up using those applications is to streamline their working day, for one. So making sure that things like routine tasks can be automated away where they can, allows you to spend much more time on things that are more valuable to the business and not spending your time on these routine tasks. So bots are a huge help when it comes to these things. And also, it's about context switching as well. We all know the context switching problem. Anyone's got any work where you're switching between applications, it can be a bit of pain. We know it actually takes a huge amount of time. If you're really into something and you switch between applications and you're switching tasks, it takes a long time to kind of get back into where you were. So again, bringing that application into Teams and having the end users using 1 platform to manage their day, to manage their tasks and to interact with the data that they tend to use throughout the day, is really, really, really valuable. So how do we do this? Well, there's a lot -- I mean, the 6 kind of main points here cover some of it. There's an awful lot of extensibility options within Teams and ways that you can build native apps for Teams. These are called out because they're arguably the most common use cases. If you see an app on the store and you install it and you see it on the left bar and everything else, these are typically the things you will see. So the tabs is how you bring UI into teams. So if you had an application, for example, that was typically a web application, you can bring that directly into Teams via what we call a tab. So as a user, I would have the application on the side of Teams. I'm within Teams. I can deep-link to it or I can click on the application and then I can see the web content there. It's hugely powerful and it stops me from having to navigate to different applications and log in or log out everywhere, and using, in combination with Active Directory single sign-on, you can identify the current user within Teams, so you can make sure there's no additional sign-in required and this kind of stuff. Again, hugely powerful. Lots of organizations invest an awful lot of money in Active Directory for all the security benefits it brings. So being able to leverage that is hugely important to a lot of customers. And the other thing, the reason I talk about tabs first is because that's sort of the UI element. Everything else is basically driven by bots. Typically, when we talk about bots, most people will kind of see them as kind of the traditional chatbot kind of view, where you're talking to a bot. That is absolutely a use case for this, that kind of conversational AI comes into play here, using some of the [ context ] services in Azure, for example, you can do some natural language processing. You can have a conversation with a bot. We see this quite a lot with digital assistants and that kind of stuff. But actually, bots within Teams exposes an awful lot of additional functionality that's available. So one of those is messaging extensions. There's a number of ways -- a number of [ measures ] you can use. But essentially, they're a way of extending the Teams UI to help users interact with your data or forms filling in forms and submitting data and all that kind of stuff. So this is done through icons in various places. You probably know there's a -- the compose box at the bottom of the screen where you would type your message. There's a whole row of icons under there. Your application can be right within there. So that when you click it, you can bring data directly into that compose box from your application. Again, it's all a native experience for the end user as well. So it's a really, really nice experience. You can also use the global search box at the top to search the data within third-party applications. So if you've installed an application, you can then use that to find that data and then share that with other users. And there are other places as well. You can include it on the individual chat messages and things. So there's some context around the application and where you're interacting with that data. Another thing is task module. So this kind of combines the bots and the UI elements here. So a task module is essentially a pop up, if you will, it's kind of a light box that contains web content. That web content is iframed content like the tabs that your application surfaced in, in an iframe. But it's a native pop-up, if you will. It's not like a Javascript, a light box or modal window or whatever we call it. This is actually a native Teams experience. So with that, you use the -- some of the software development kits available to interact with Teams directly from your web content, given these are real kind of native fill as they use in your application. And then the last one on here, notifications. This is a huge part of Teams as well. People within Teams, they're chatting all day long, being able to see when something requires attention, you would often use some element of notification. And the one that we talk about most within Microsoft is proactive notifications, where the user hasn't first initiated something. You're actually sending some information to Teams from your external application. Now in combination with this, you would use something called adaptive cards, which instead of just seeing a piece of text, you see a really nice kind of UI element. And on there, you can have buttons that give you call to actions and things like that. So again, we see this really, really often now and then being used more and more because it allows the user to action something directly in the chat, which is phenomenal, really. If you consider that usually, you'll get some kind of notification that reminds you to go to an external website or application, sign in, make the change and submit the data, whatever. And then you go back to Teams and it takes you a while to kind of get back into where you are. But actually, if you're working within Teams already, you have your notification, you're selecting the notification, you get your toast pop-ups and everything else, you immediately get that call to action directly there in front of you. And there are some native functionality within things like adaptive cards to allow it to capture input directly from that card as well. So again, really, really, really powerful. All of this stuff is built using what's called the bot framework. And there's a couple of ways that you would build this. One would be via what's called a bot composer, which is a kind of a nice application with a kind of what you see is what you get kind of UI around building conversational bots. Underneath that, there's the actual SDK itself. It's called the bot framework SDK. It's available in a host of languages. And these are used -- or if you build a bot application or application containing a bot, it's the bot framework SDK that you use that would interact with the bot service, allowing you to receive and send messages to Teams and handle the additional functionality. So there's an awful lot in here I can't cover because we don't have time, but there's a lot of bot functionality you can add. To meeting apps, for example, you can interpret what's being said. You can bring up side panels, you can bring up pop-ups. So there's so much you can do. And it's all based on the idea of this bot. And a bot really is a single API endpoint. It's a really, really simple thing to get up and running with, there's loads of samples on GitHub around it. And yes, you can go from nothing to a fully functional bot in no time at all already because of the -- they're available. Now as well as this, one of the powerful things of Teams and using bots is the interaction and the integration points you have available with other applications as well. So because it's your application, this is your API endpoint essentially, you can interact with any service you want in order to pull data in. But there's an awful lot natively available to interact with the first-party applications. So we've got bot framework here, for example, web technologies, any web technology you want to use, to surface UI through tabs and tabs modules you can use because it's just an iframe. SharePoint is a native or natively kind of integrated with Teams anyway because things like files are stored there. You can now create what are called loop components, which are editable components that are hosted by SharePoint. But actually, anyone in the conversation can see the edits live. Again, really, really powerful, think of to-do lists and those kind of things. Power Platform. Again, it's -- there's a native integration there with Power Platform. The Power Apps that end users create can surface those within Teams as applications. They're not store apps. They're actually an application for Power Apps if you searched your app through. But you get the same kind of native experience, and being able to bring that directly into Teams, again, increases productivity, reduces the need to switch out to other applications and things like that. And the final thing I'll touch on here is Graph. Now Graph API is the API that is -- that sits in front of data, essentially, the Microsoft -- or the data that lives within your Microsoft tenant. So access and information about the user or the organization or when you're talking to SharePoint, or even just Teams directly, putting out messages, sending new messages, all of this stuff is done via a Graph API. There's loads of SDKs around Graph API. There is an SDK and there's documentation around Graphs API to make it really, really easy. And all this together for its a really, really nice native experience for end users. And so we go into the Final slide. And again, this covers or touches on the area that I didn't really talk about just because it's another huge area. But we talked about bots within third-party apps, around chat and around messaging expansions, extending the UI and we've got that. But there's a huge part of bots which is around the meeting itself. So you can actually add a bot as a participant of a meeting. That bot can then receive the audio and the video within there, and you can process that and you can send a different video back and all that kind of stuff. It's really good for recording, detecting who the current speaker is and those kind of stuff. This is being worked on all the time to improve it. In the future, I think it will be backed by Zero Communication Services as well, making it even easier and more flexible. And you can talk to other channels. As well as you can use your bots to -- using as your communication service, you can talk out to other video platforms as well. You don't have to save in Teams if you -- if the end customers aren't using Teams, they can communicate through Teams and still have the bots involved in the call. So overall, just to kind of summarize really, Teams is a super-powerful, powerful platform. It's not just chat and video. The fact that you can bring these third-party applications into your -- into the platform that you use every day, all day, every day, the highly collaborative features within there to share content; being able to discuss that content; and importantly, being able to send data back to the application as well without having to leave Teams, particularly powerful here. So with that, I'm going to say thanks very much. It was kind of quite short and sweet. So there's an awful lot to talk about when it comes to Teams, apps and bots in particular. I spend an awful lot of time working with partners around bots. It's a huge use. But hopefully, that's kind of given you a flavor of some of the things that you can do in Teams, and I guess the flexibility that you have when you're bringing your application into Teams and trying to surface that third-party data to make everyone's lives easier.

That was great. Thank you very much, Scott. Appreciate that. And there's a lot more to Teams integration than meets the eye, and I think you highlighted that wonderfully in your presentation. And for some of the folks on the call, that might have been a little bit deep, but I get lots of questions about what does native Teams integration mean? And I would just point out the fact you did not hear Scott talk about Amazon Web Services or Google Cloud, and he didn't talk about taking voice out of Teams or using your own instant messaging or your own conferencing platform. So everything is within Microsoft Teams or Azure, and that's really -- that's where Altigen is. Everything Scott went over is how we build our applications. And so while it might be a little bit deep for this call, and I apologize if we got a little bit too deep, everyone, but I will tell you that our business partners, our Microsoft business partners, understand everything Scott talked about. Our customers understand everything Scott talked about. These are the questions we get. And if you're not down the line with Microsoft, and they are, you're not doing business with them. So that's where we're coming from, from our stuff -- from our solutions, I should say. And Mark Allen will highlight that a little bit more just slightly later in the presentation. But at this time, I would like to introduce Mr. Joe Selveraj, the Director of Information Technology at Fiserv, who's done yeoman work for us in setting up the data center and getting our applications ready to go with Fiserv. So Joe, you have the floor.

Sure. Yes, thank you. I'm Joe Selveraj, I'm Director for IT for ConvergeIT deployment or delivery. Fiserv is a Fortune 500 company, where we service a lot of financial institutions for their credit card issuing, debit cards, banking, credit union solutions and merchants. And we use ConvergeIT -- or it's an Altigen implementation of brand that we use of ConvergeIT here. That is even branded desk ConvergeIT, that is, it's underlying applications are Altigen applications. So the solutions that we are offering here in the name of ConvergeIT are like a YPAR PBX, omnichannel contact center and an IVR platform. In the PBX platform, we have a number of hosted clients in our Fiserv data center. Like earlier, just told, like we are moving towards a cloud solution and Fiserv as a private cloud. And we are rearchitecting or we are using the MAX cloud version of Altigen's PBX platform to host a multi-tenanted environment, and so that we can scale up quickly to meet our client requirements. And you just got all the standard [ Y ] features, but added new features in the new platform are instant messaging and web and video chat as well. Those are being added currently. And our omnichannel or contact center platform, they use Altigen's FrontStage, that's where we have the agent front-end, where it currently can be used for voice, SMS, chat and e-mail support. And we are integrating all these applications with Fiserv security standards. We need to have Tier 1 authentication. So both PBX and omnichannel are, the agents -- since the agents are in the bank sites, they need to get authenticated before they can get into the application server side. And that's done in the Tier 1, and we don't allow anyone beyond Tier 1 without that authentication. So that's one of the integrations. And other integrations are we are also integrating with our CRM and reporting solutions to -- internally to Fiserv. And that, we provide reporting, billing services to the clients. And on the IVR or self-service side, we have about 2,000-plus financial institutions we serve using Altigen platform. And most of them are hosted in Fiserv data center. And this also is going through an upgrade, in the sense, we are creating clusters to have active-active environment, where if we lose a data center or if we lose a few servers, we can continue to serve our customers. And we are -- this Altigen platform is integrated with multiple Fiserv account processing platforms in the back end. We have about 15 different banking, crediting in platforms in the back end, and Altigen product is integrated with all of them. And in the advanced feature side for the self-service. Recently, we have added Trust ID feature, which allows to authenticate the caller right when they call. And also the new feature for voice biometrics also helps to identify the caller and prevent any fraud. And we are also continuing to improve further on the natural language processing side. That's something we are expecting to add on here. And we are excited about Teams integration that's going to be added with this contact center platform. And we are continuing to -- our business and sales is excited about all the new features and functionalities so that they can be sold to either the existing customers, existing clients who are not using the new features or to new clients so we are continuing to be growing. Thank you.

Okay, Joe. Well, thank you very much. We appreciate that. And I just want to clarify for our audience, that I'm not sure we've made this clear. That the Altigen solutions, when Fiserv sells the solutions, are branded under their brand name of ConvergeIT. So when Joe is referring to ConvergeIT, these solutions are all underlying Altigen software. So we've obviously enjoyed a very good relationship with Fiserv in the past and expect even bigger and better things to come with the new solutions that we're rolling out, as Joe discussed. So thank you very much, Joe.

Yes, no problem. Thanks.

Okay, everyone. So we're going to switch gears here a little bit and talk about the overall -- we're going to get a little less technical and talk about the overall market opportunity with Microsoft Teams. And we're pleased to have Mike Hejsak, the CEO of UC365, join us to give us that overview. Mike, it's all yours.

Thanks, Jerry. Good morning, good afternoon, ladies and gentlemen. Thanks again, Jerry, for inviting me along to give you a little market overview. Before I start, let me just give you a quick overview of who I am. Been in IT for over 40 years. I started my own UC consultancy company about 3 years ago mainly because I spent 22 years in BT Global Services, where I built out and managed the Microsoft One practice and proposition to market. And during that time, we revenued pretty much $200 million of Microsoft services during that time, but it was a means to an end for BT because the pull-through on voice and network was over $1 billion. So you can quickly see that some of the larger telcos in the marketplace are picking up the products really quickly from a Microsoft perspective. And you're seeing Tier 1 telcos now actually providing a lot of network and voice services behind the team's direct routing and operator client models, which I'll expand upon. So what does the market context look like? So if I may just move on. What we're seeing is COVID has a massive impact on the way people are working today. It's unfortunate, but it's driven the adoption for people to work from home. Whilst that's the case, it also brings itself a lot of new challenges. The telecoms industry has benefited from this in the increase in voice and network uptake, especially around the ISPs and the cloud-based services. That then leads itself to a lot more security focus because it's very evident that, with the larger uptake of cloud-based services over the Internet, customers and companies of customers or customers -- or companies rather, are becoming much more prone to cyber attacks. So these organizations are spending more time around the security, and not only of their own service interactions, but also the customer interactions, too. So it's taken very seriously, and there's a lot of money being spent around upgrading their security elements. I talk about seamless and integrated experience. It's not only about the customer interaction journey, but it's also around the journey within the organization that makes them more optimized and more efficient in the way they work. So being much more effective in communications between employees and the way it works, Microsoft Teams absolutely lends itself to that scenario. For example, I'm currently working with a financial institute, they have 5 different desktop clients. And that's not efficient. The support behind that, the training becomes more cumbersome. And it doesn't lend itself to user behavior. So having a seamless and integrated experience, not only towards your customers, but the way you work internally, really does help. I'm also talking about integration, which is seamless as well. So as an example, Microsoft Teams client and direct routing, specifically around the Altigen and the calling bots, because I'm not seeing anyone else doing this type of work in the marketplace, it all sits within the Microsoft stack. And when I say Microsoft stack, Office365 and Azure. But as soon as you start to reroute some of these calls into other services on AWS or Google, sorry, Jerry, I had to mention them, but it also introduces more complexity and other layers of escalation. And that just adds cost in the way they work. So Altigen does this really well. It operates within the Microsoft stack using all the components. And lastly, the mobile workforce. I think that you're seeing a big swing towards people working from home, much more compelling reasons for doing this. And people become much more efficient when they do work from home. I'm just going to cover quickly a study that IDG did. And I'm going to go through some of the key takeouts, if you like. This report -- is that a build, Jerry? I think I'm missing a couple of bits on the slide. Let me talk around it anyway. So the IDG report...

Animation?

Yes, I just don't know how that's that. Oh, that's it. That's the one, perfect. I'm not used to this, I'm used to Teams, Jerry.

I hear you.

There you go, put it all together for you, all right. So IDG undertook the study with approximately 800 IT leaders in 250 lines of business, so it's quite extensive. But a majority of them, 82% of the interviewees reported that they're implementing new technologies and strategies and methodology due to this pandemic. 73% have made no change or increased their budgets due to the pandemic. So we know there's money in the marketplace for this to be adopted. 81% have increased their focus on IT innovation to accommodate remote working. And again, when you look at what Scott was saying around Teams, it really does lend itself nicely. It's very well integrated with the Outlooks, the SharePoints, all your Office suites. It's probably the market leader in the fully utilized or unified communications tool. So when we look at some of these other stats, top technology innovations. I mentioned security, 51% are improving or trying to improve the way they operate over the Internet because this service now is just generally delivered over the Internet or VPNs, so they're more prone to these attacks. 35% are implementing new practices for remote working, along with their cloud-first strategies. We're seeing a lot of people move. And some of the earlier slides that Jerry showed, they've gone away from the hard PBX environment, hardware PBX environments, to a software, cloud-based. So a lot of organizations are moving there. You've got business -- top businesses initiatives around security, again. Improvements in the customer experience is always going to be a priority and always was. They will continue to strive for the excellence around the easier use of journeys for customers. Not only for customers, but their internal ways of working. Transforming business processes, becoming much more efficient at the same time, they all sit in hand-in-hand. One can't -- you can't improve one without affecting the other. That's probably the best way of putting it. And top revenue-generating aspects. In many ways, this is very relevant to Altigen, automating the business and IT processes, it's going to be really key for Altigen to do this because I can only see volumes of business coming their way. And when you start to onboard these customers, you want to do it in the most efficient, effective and -- because you -- Altigen won't have the capacity to handle all the volumes that I'm expecting. The interaction with customers through portals. This allows them greater flexibility to change and manipulate all those call flows that you're going to hear about in the solution designs. And it's critical to the success in their products and services, making it intuitive, it will only get bigger and wider. The next slide is what I've seen in the marketplace, and these are a few of the stats that are available. The key one here for me is the 270 million monthly active users on Teams, right? It's Microsoft's flagship. It's their biggest-growing product ever. And there's so much potential in terms of revenue opportunity for Altigen, and let me explain why. Microsoft have calling plans. The uptake of those calling plans has been less than 5%. So 5% of 270 million isn't a lot. Microsoft introduced a direct routing solution, an operator connect model, and they tend to be through solution providers or telcos. Those telcos are taking what's probably another 25% of that market, which means there's an astonishing 119 million monthly active users aren't able to make or receive a PSTN call. That's a huge amount of revenue potential there. And I can only see that happening more and more when that starts -- that product starts to grow. That huge potential is also saturated in a market where telcos and solution providers are providing these solutions, but they're not voice experts. So Altigen are very well positioned to try to pick up a lot of this action, if you like. So really good opportunity. The next slide is more about -- let me just get to the next slide, is what's happening with the Microsoft license resellers. So in the CSPs in Microsoft license -- and they're not just U.K. actually, they are actually global. These guys see a lot of the action in terms of licensing, everything gets pushed through a lot. So a lot of these companies here actually renewed licensing. But they're also being asked whether they can provide some of the services. Now the margins for licenses are getting less. And a lot of these organizations that you see in front of you are basically looking for service providers to supplement some Teams direct routing, operator console and some applications that sit in that space. So you've got some really large ones there. I've highlighted 2, Bites, the software one; a couple of the biggest ones in Microsoft's portfolio. And I'm working very closely with these guys around some of the solution sets that Altigen provide. And the same can be said for operator connect partners and players in this space. So there's a list there that you can see. which provide you -- predominantly telcos, they're predominantly providing calling plans in an operator connect model. It's only going to get bigger and wider and more breadth and depth of terms of where their reach is. But to help some of these guys, they need to start having a USP, something unique, something that's going to be different and a cut above the rest. And again, I've highlighted BT, mainly because of my background, I know the guys well. We are trying to onboard Altigen into the BT stack for their products and services. We know Pure IP, Gamma. A lot of these players play in the U.K. and global markets. So again, just the opportunity to sell Altigen services to service providers is huge. And then finally, where is Altigen going to win? So they're addressing a market requirement, and I don't see a lot of players in this space, specifically the way they're doing it. And again, I think Mark is going to cover some of the solution sets for you. The seamless and intuitive user experience, it all sits in Teams. Again, you're not going to find a lot of contact centers per se that actually work within Teams using a bot framework that Scott talked about. The integration is far simpler, far easier. Gone are the days where you're spending 30, 40 days of professional services to integrate some of these applications, they're going to disappear quite quickly. And smaller customers just don't want to pay for it. Then the application. Once the application is in, it stays there, it actually grows. And that's very attractive because once you start to put piloting, it just doesn't disappear, it starts to get bigger. Market price points. Hugely attractive when you compare it to some of the other applications that are similar but not exactly the same way delivered. And where Altigen is going to win is through reseller channel growth. And there's a huge, again, a huge opportunity, and I can't stress this enough. There's so much opportunity to resell this product through these resellers, the CSPs, these telcos, that really do like some of the products. So Jerry, I hope that's given an overview for everyone.

That's great. Thank you, Mike. And I just want to -- a few points of clarification for our audience, as I will say that Paul Fullman, our VP of EMEA, who you'll meet shortly; and to a lesser extent myself; for Mike, I believe the better part of 10 years, tried to get our solutions into British Telecom while you were there. And you're quite cordial about it, but you said, "Hey, guys. Your stuff is just not closely enough aligned with Microsoft for me to be able to endorse you." And I believe, Mike, that has changed with CoreInteract in the solutions we...

Yes, absolutely. It is completely changed to something that I really, really do like, but I've left BT. But the fact is I still know a lot of people there and still have a lot of influence on what they should be doing and how they should be doing it. And actual fact, believe it or not, I'm still contracting into a part of BT to do this. So that relationship, I can't see ending any time soon. And the fact that we're working with some other mobile operators in the U.K. is, again, a very large opportunity for you, Jerry, and the team.

Absolutely. Well, Mike, I will tell you -- I will share Mike's personal goals is a house in Bermuda with an elevator, and we're going to help them get there through revenues. We appreciate that, Mike.

You're very welcome. Thank you, Jerry.

Yes. Thank you. Okay. So moving on then, and thank you to all of our speakers, by the way. You all did fantastic jobs, and thank you so much for providing those overviews in your various areas. So as we proceed ahead in the Investor Day, I want to speak for a few moments on our strategic positioning and the business opportunities that Altigen sees as a result of that going forward. So first and foremost, I think it's important to point out our focus, right? So this has changed from where we were in the past as a, let's say, as a sort of a hosted PBX provider. We're looking, going forward, and I'll just read this because I can't say anything better than what we have on our slide, is to deliver progressive technology solutions which automate business and communications process that increase employee productivity and enhance the customer experience. And I can say today that there are probably no higher topics in the C-level suite than increasing employee productivity, particularly in a remote workforce and providing a better customer -- end customer experience. And we are spot on with what we're doing with our solutions. So let me just talk about how we deliver on that. So first, I just kind of want to review. This is our -- this is what we review with our customers. And we talk about what's going on in your business today. And for most of our customers, they have a UCaaS platform, phone system/UCaaS platform, and they have some type of contact center. But these are 2 distinct and separate solutions, right, to meet their customer communication requirements. Now -- sorry, I'm waiting for the slide to build here. The interesting thing is that the PBX is pretty inexpensive and pretty much in use by all the employees. But the reason we're focusing on this contact center, it's very expensive for most organizations. And it's only used by a small percentage of the employees. It delivers a lot of functionality, but it's really only used by a small percentage of the employees. So what we have seen here, and I think perhaps we're maybe the only ones that have seen this, is that there's a huge functionality and price gap between UCaaS and CCaaS. [ If it's ] all you saw here today in the market, and you guys look at -- "you guys," I'm saying the audience, I apologize -- you'll hear a lot about the UCaaS vendors, and you'll hear a lot about the CCaaS vendors. But [ where ] they're addressing sort of opposite ends of the spectrum in the enterprise, and the middle portion of that is really wide open. It's not addressed at all today as we see it. So what we do, and we do have, I should first point out, that we do have solutions, our UCaaS product, and we build our solutions on top of Teams, and we do have our front-stage contact center. So yes, we do fulfill those 2 requirements. But more importantly, what we do is we really fill that enterprise communications gap. So we're not for the general employees, we're not for the contact center agents. We are very much focused on customer-facing employees. And in most companies, this will be 40% to 60% of the people, right, that actually are customer-facing. So we deliver, and I'll try to simplify this, we deliver contact center-like functionality to the enterprise user at price points that are closer to the PBX user. This is a winning combination, right? And we're just getting started on this. Nobody else is doing this and we built it on top of Teams. And this is one of the reasons we're so excited with our CoreInteract platform because this is a brand-new market. In fact, it's so new that you won't even hear the analysts talk about Customer Engagement as a Service. It's too new. We're doing it, right? So -- but we'll collectively say that our solutions between the UCaaS platform and the CCaaS platform and the -- our customer engagement as a service, that comprises our suite of customer experience solutions. And we do hear about that. But the key missing point, right, is this middle piece that really is the great opportunity for Altigen that we're going to capitalize on with our CoreInteract solution. Okay. So let me talk about what that means, okay? So great, we're going to capitalize on how do we do that? Well, we have a pretty unique solutions suite. In fact, I am personally not aware, and I don't believe anybody at Altigen is aware, of any other company anywhere in the world that delivers a complete suite of customer experience solutions sitting on top of Teams. And what that means for us is that we provide the SIP trunks or direct routing, so we provide the communications, but we'll work with other communications providers as well. And as Mike talked about, the Microsoft Connect partners. And by the way, I'll just do a quick aside: those Connect partners are, Microsoft said, for the big telcos, yes, we're going to allow you to connect directly to Teams so we can drive more business. And we're fine. We work with those partners as well. Mike showed you a bunch of boxes there that we're working with, because they will also sell our solutions into their customers. But our complete suite starts with the communications, the SIP communications. We have an operator console, every company needs one, Teams doesn't have one. We do the call reporting. We do the contact center. We do enterprise customer engagement with CoreInteract and we do call recording. So essentially, every aspect of communications that an enterprise needs to communicate with their customers, Altigen has addressed from a single vendor, and that's unique. And I will point out one additional piece, that we also have our MaxCloud solution that acts as a PBX extension for Teams. So I would like to just speak for a moment on that. That's totally different than some of our competitors that claim they're integrated with Teams, which they're really not. We don't -- our integration with Teams is -- in many organizations, every single user does not have a -- it used to be Office 365, now it's Microsoft 365. They don't have those licenses. And you've got a lot of warehouse workers or field workers, et cetera. They only have e-mail. They don't have -- they don't need Word and PowerPoint and Excel. And so without that -- without those -- the full 365 license, they can't really get a phone system. But our PBX is integrated into Teams so we can deliver for those users the PBX capabilities. So we're not trying to displace Teams, we work with Teams and extend Teams. And that's a completely different story than what our competitors are trying to do, going head-to-head with Microsoft. And you guys all know who they are and say, choose me instead of Teams. Well, that, I think we've seen, based on their stock performance, is probably not a great strategy. But we have all of these applications and then we wrap those applications with our portal to make it that much simpler to do business with us. So with that in mind, I just want to talk about how Altigen is evolving from an SMB -- primarily SMB customer base to the enterprise base. And in the SMB world, they -- yes, they like the UCaaS products. They use most of the capabilities, if not all the capabilities in the UCaaS. And by the way, when we say Unified Communications as a Service, we're talking about phone calls and instant messages and web conferencing, desktop sharing those capabilities. Well, that requires expertise in SIP, and SIP is the communications protocol, and unified communications, and of course, we have to manage this in the back end in the cloud. We're very good at this. So we can deliver all these capabilities. And what it requires on the technical side is to deliver the SIP trunk services, we install our solution and we provide support. And typically in an SMB, we're in and out in a day or 2, right? And we're done and everyone's happy. So -- but what is interesting from that perspective is that from an SMB, the way they look at things, they adapt their business processes to the software, right? They're not going to call up Adobe or Microsoft or even Altigen and say you're going to -- you need to change the way your product flows because it doesn't work for my small business. Nope. Your business is going to work the way the product works. So with that in mind, it's a totally different ball game in the enterprise space that we are currently pursuing. So in the enterprise space, it's far more complex. The solutions require assessment and consulting services upfront, right? It's not just a simple project, in a couple of hours we can figure it out and get something deployed. No, this is a major deal. This is going to impact all parts of the organization. We have to do project planning and we develop scopes of work with -- in conjunction with our customers. And they do some things and we do some things. We do most, but they do some things as well to get prepared. And then we have implementation and deployment services. And these services can maybe take 30 or 60 days to roll out. And then there's always the requirement from a customer to do integration. Oh, can you integrate with my Microsoft Dynamics 365 or Salesforce or ServiceNow or some homegrown application I've built. And this is part of the -- when we talked about our focus, automating the business processes and integrating those business processes with the communications processes. Every enterprise wants it. And we have to be able to deliver if we want to win those deals. And then of course, before we're done, we have to do both technical and then user training to make sure everyone's up to speed. And then, of course, technical support services, and this is, for the large companies, 24/7. This is why I mentioned early on that we've got our support organization available globally that we can provide those support services. And so it's critically important. And in this case, for the customers that we sell to, it requires a lot of expertise in consulting, project management, and let's don't forget the most important part, in the entire Microsoft technology stack. It's not just -- we're not just deploying a UCaaS platform. This impacts everything the company is doing. And so we need those skill sets to be able to compete in that environment. And so in an enterprise world, the solution is adapted to the business processes for these customers. They're going to pay for it. And just to give you an example, a typical deployment for an SMB is about $2,500. The typical deployment for an enterprise customer is $50,000 to $100,000, right? That's how much more complex it is, and they're willing to pay for it because their IT staff, they don't have IT staff sitting around doing nothing, waiting to deploy solutions. Eventually, we'll train them and they'll support the solution, but they need the services upfront to get our solutions live. And I will tell you, this is the #1 reason that we have been looking for a Microsoft partner to acquire and it took us more than a year to find the right company with the right skill sets that are complementary to what we do. And I'm very pleased to announce, as we announced earlier today that we have signed a definitive agreement with ZAACT Consulting to come on board with Altigen, so we're going to acquire ZAACT. So [ as they ] come on board because we're going to work very closely as a team. And I'd like to introduce Mr. Ryan Day, Founder and CEO of ZAACT, to talk about the ZAACT business proposition and how it fits with Altigen. Ryan, the floor is yours.

Thank you, Jerry, and thanks for having us, and I'm very humbled and excited for this opportunity. We -- this presentation has actually worked very well with my understanding of how we fit into the organization and how Altigen will continue to go forward and very, very excited about that. Just for background and reference about ZAACT Consulting. We have been around for about 11 years now, focusing 100% on the Microsoft stack. Companies hire us to come in and help them implement their Microsoft products that they have purchased. So we come in and we help implement those products. We help them understand those. We help them build business process automation on those. And that's -- just this first sentence there and where we deliver comprehensive business solutions built on the Microsoft technology stack. So my personal background is in software development. I worked for a large health care company and some other large companies building a lot of very, very significant software packages for them. And so when we say we deliver comprehensive business solutions, understand that our solutions are really geared for the end user and for the end user to be productive. A lot of times, and this is what I used to say, a lot of times, software out of the box was very unusable, and specifically when it came to Microsoft or SharePoint or other specific things. And so we wanted to really understand what the business is trying to do, and to use those tools that Microsoft provides to build very, very good business technology solutions. And so I know I'm kind of giving some background here, and then I'm going to go through the overview as well. But historically, we have built a lot of intranets. And I would say recently within the last 2, 3, maybe even 4 years, as Teams has come around, we have really been focusing on building applications on Microsoft Teams. Specifically, if you recall, the presentation that Scott talked about from Microsoft, all of the amazing things that you can do with Teams with bots, all the functionality there. That's what we do. We build those for companies. They hire us, we come in and we analyze and understand and architect and build those solutions for those companies. And that's part of our history. That's part of what we're known for. We work in various industries, but let me just kind of go through the bullet points here, so I don't miss something. So we do provide a lot of very customized development architecture. Obviously, business process integrations and cloud implementations. Now if you understand software development, all of those go together because there's a lot of times when, let's say we're building an application on Teams, well, on the back end, it's really tying to an Azure service that might be doing something for it. But the reality is, that Teams application is really solving a business process. And so what we end up doing a lot of times is we're analyzing the business processes, is we're really fixing -- we're fixing flaws that the business is doing. So we're walking through the business process very, very -- trying to simplify some very heavy processes at times and trying to document those, trying to understand those. And that's when we really start seeing some key deliverables, is when we're able to really fully understand that the process they want can be simplified using technology and softwares. It allows us to build that and be very successful in there. As you can see, we've got extensive expertise. Our gold competencies, our silver competencies, we -- we do -- I'm just going to talk briefly about each of these application development in SharePoint. My specific background is in SharePoint. That's what I understand. That's what I know. That's what I have developed on inside and out for several years. That is a background technology that we use quite a bit now. I would say it used to be kind of more of the implementer, that we wanted everybody to go to a SharePoint site, but now that's really changed to more of a Teams interface. Application integration. A lot of times, there's third-party applications. There's all kinds of different ways to tie information together using various applications, and we want to make sure that we have the capability to integrate those applications. Cloud productivity, Microsoft 365, obviously, that's kind of a big one, and we're going to talk more about that. Collaboration and content, and this is a big concept. And the concept here is that as an employee with the enterprise organization, you want to be able to collaborate with other employees, you want to be able to add content. You want to be able to have workflows. And all of that is very simplified using the Teams interface and perhaps a SharePoint background or some bot deliverables that we might develop. And so there's just a lot of potential in each of these areas. The cloud platform, we've really used Azure for a lot of dev back-end stuff that maybe we can't do on a front end, but we can tie it into a service that we've built somewhere. And I'm going to go into a little bit more detail on that as well. Some of the key areas that we have very -- we've had a lot of success on has been the financial services. We've got one of the largest credit unions in the nation, America First Credit Union, that we have been doing work for, for about 4 years, and we're excited to be able to now do some work with them on the Fiserv side. But primarily, we've been working with their teams and their Teams implementation and building bots for them. Health care, transportation, we do a lot with departments of transportation in states. We do a lot with major, major health care industries across the nation. Continuing on here. Our company, I would say, is relatively small. We have about 25 employees. The majority of our employees are all very technically -- their background is very technical, whether it's a project manager, a developer, an architect. We have very, very technical, very deep capabilities within our company. And we have been -- we have really been growing tremendously over the past few years, specifically because we have focused on the Microsoft stack and we are giving a lot of attention to what Microsoft is doing with Teams. I'm at next slide here. Let's see here. What this slide kind of shows you is what the Microsoft services are that, that consult team has really been focusing on. Some of these go together and some of them need to really be called out specifically. I'm going to start with SharePoint development. And historically, and even now, a lot of development that companies want to do when it comes to business process automation is using either a SharePoint front end or a back end or both. So for example, if you have document management needs, SharePoint is the document management solution that Microsoft has. And it's a phenomenal solution. It's a very nice solution to go in and modify, and apply maybe a workflow to a document, or apply some custom interactions to that document or whatever you might need to have there, and SharePoint is a very, very nice tool that we have very extensive technical expertise into. Power Business Intelligence and Apps, this is an interesting area where a lot of companies have big piles of data and all kinds of information that they want to serve up and they want to, just to share with the executives, and they want to make good decisions based on that data. The problem is, is that historically -- I'm not even going to say historically, but most companies, have these large data repositories with very, very good information, and they don't have -- they're not serving those up appropriately. And so we go in with a lot of Microsoft Business Intelligence, with Power BI. And we're able to build really nice dashboards and show insights and allow that to be sometimes part of a portal, sometimes part of a reporting structure. Sometimes we can have those e-mailed out. It just depends on what we actually understand they might need. Dynamics 365. This is Microsoft's solution to help with sales and helps with leads and helps with understanding who it is that you are working. As a company, I'm trying to sell to this person at this company, this is what we're doing with them, this is how we're doing it. This is how I can share all that information and store it within the Dynamics 365 offering that Microsoft has. We currently have a very, I would say our Dynamics 365 service is on the smaller end, but we've got really, really nice clients, and we're continuing to grow that area. And it's probably one of the biggest areas that we can grow into. Azure Bot Services, we've talked about that quite a bit in this presentation, but the key that I want to really point out is at ZAACT Consulting, we actually believe that this is a really, really nice future when it comes to Teams and bots and how that interacts with clients and teams and companies. They want to be able to just go in and find something very fast. And if you have a bot that's able to interact with them and provide that information, it saves on having to hire somebody to do that. Cognitive Services. This is a deep-dive area with Microsoft, where you can provide a lot of artificial intelligence and a lot of -- if I've got a lot of information and data, then that AI can come back and provide various information to me. We use that a lot with the bots that we work on and very, very deep technical expertise there. Obviously Azure, we generally build a lot of custom applications on the back end of Azure, so that we can tie into that. Microsoft 365 is really a holding concept that the majority of these technologies kind of fall into. And obviously Microsoft Teams, we've talked extensively about that as well. But that's really the direction that we have been going as a company, and we're seeing a lot of success and we have a lot of very, very good expertise in that. So I'm going to go to the next slide here. The exciting part of joining forces with Altigen is that we, at ZAACT, provide services. Our company is 100% built on professional services. Companies hire us to come in and build software for them. What we have been lacking is actually a very nice product suite to have as part of our services. And so from our perspective, we're excited to be able to join with Altigen and to have a nice product offering that we can actually talk about and have our clients be interested in, and then provide the integration services either initially or after that, or help them with other applications they might need. So there's some really good synergies there with the products and services. We provide services for -- the majority of our services are for mid to large enterprise customers. We have found it to be very successful to go in with an entire team, with our project managers, with our architects, with our developers and our designers, and to go in and fully understand the need that the client has and to take on big projects and to deliver those in a successful way. And so we've been very successful with that. We're also excited with Altigen because we've got some very large clients that we're excited to talk to about some of the Altigen products. And likewise, they've got some very nice clients that we're going to be able to go in and provide some services to, to help them implement and integrate various Microsoft initiatives that they might have. What we have found, and this is the next bullet point, is that if a client can count on the services that we provide, and if we can provide those services around a product, then those engagements are much more sticky. They really want to have a long-term engagement, a bigger spend on those. They want to ensure that those engagements don't just, hey, here's an installation and then we're going to see you, but it's a lot of consulting to ensure that everybody is using things the right way to implement other technologies as they might need them, and to help the company continue to go. Our alignment on the technical and with ZAACT, we -- again, we're very, very technical, but we align very well with Altigen on the vision and what they're doing and what they're trying to do specifically with Teams and with Microsoft. And I think this provides Altigen with some major credibility, specifically that we have been in this arena for several years. We're well known with Microsoft. Clients that we work with generally continue to use us over and over and over again. And so there's some major credibility there. As far as key markets, obviously, we're going to be focused on some of the financial sectors because that's where some of the Altigen products are going to be able to do some very good stuff. And we're also going to be focusing on some of the big areas that we have been working on in the past, such as health care and departments of transportation. And there's various other markets that we really want to focus on. But I would say initially, financial services is one that we're really going to key on. So let me just see. I think that's all the slides now that I had, Jerry.

Yes. That was great, Ryan. We appreciate that. Yes, we're excited on the Altigen side as well. And I just want to provide maybe a brief recap. And so the questions from, let's say investors, might be, how in the world can you grow SaaS revenues when you acquire a services company? So let me start by explaining, kind of look back a little bit. In the SMB world, the saying internally is one and done, right? We deploy something in a day and we're done. There's nothing else to sell to that customer. Either that customer grows and they get more revenue, the customer stays the same, and we don't get any more revenue than we've gotten. Or in many cases it's tough for SMBs, they decline, and we lose revenue. The enterprise world is totally different. The enterprise world, the terminology is land and expand. And what that means is when you're an enterprise, you're typically not -- your initial engagement is not the entire enterprise. It's typically a particular department or a group that has a need, a crying need for the solutions and services that Altigen and ZAACT offer. Now we love the fact that ZAACT has this consulting orientation, because once you get into a customer, and we've not done a good job with this at all. Once you get into a customer, which is what ZAACT does a great job of, and I'm telling you, when I say great job, I'm talking about starting out at $25,000 on an engagement and growing that to more than $1 million in annual services. That's a great job. And when they do that with Altigen, that also drives additional SaaS revenue, because now we can permeate throughout the entire organization with our solutions. So it's really -- these -- our solutions and ZAACT services are hand in glove, and you cannot really penetrate and knock out a big enterprise opportunity without what we're doing -- what we are going to be doing together. So if that's fair for you, Ryan, I'll let you make a final comment, and then we'll move on to Mark.

No, that's very fair. And it's not only fair, but it's relevant, and that's what we do at companies. As we go in initially, we provide, here's ZAACT, here's an application to provide -- that will help you with your solution right now. But what we find, though, is that as we get in, as companies trust us and they like us and they see that we're very capable and that we are able to give them what they're looking for, some of the opportunities just start opening up more and more. And what we find is they pretty soon, just like use us, and we get things done for them way faster and better than they could internally and it provides success for everybody going forward. So yes, thank you.

Yes. Thank you, Ryan. Okay. So we're going to transition now to our Solutions Roadmap with Mark Allen, our CTO. And Mark, hopefully, I properly set the stage for you with a very, very detailed Microsoft Teams overview by Scott. And so I think you're going to probably start out with a more simplified view to bring that home. But Mark, you've got the floor.

Thank you, Jerry, and thanks, Ryan. We are extremely excited to be working with ZAACT and the potential that, that brings to us and our product road map. And I hope during my short section here, I can express during the presentation how our products align with services and how that will drive additional revenue and why this was such a, I think, an exciting opportunity for us with ZAACT. And so as I weave that in, I think this is the first time also that if someone has heard our product road map previous, it might make more sense now with the preceding speakers we've had and the items they've shared, as to why we've gone the direction we have with the products. So with that, I'll jump into our product road map. I'll also be hopefully showing a few live recorded demos we did. This platform doesn't allow us to share screens, so we very recently recorded a live demo to show these products in use that we're working on as we're launching them. So let me, if I can, start out by reiterating a little bit about what it means to be a Native Teams architecture for Altigen versus Teams "integrated", and what that means to our customers. This is a major differentiator and a key differentiator that we pose. I think Mike Hejsak brought that up very nicely in his presentation. So it's important that we truly understand what that differentiator is and why that drives and how that stacks up against our competitors. So let me put it in slightly different terms than has been shared to this point. But if you look at what it means to be Native Teams architecture with how Altigen's solutions are working. You can basically break it up into kind of 3 questions. The top line being who provides your e-mail? Your web chat? Your voice? With direct routing? Your SMS? Where do those come from? Where do those originate? Who's the provider? In Altigen solutions, we use Microsoft as the originating voice carrier, or through us through direct routing to Teams or Teams Chat or Microsoft 365 e-mail. We're using Microsoft solutions to be the starting point of those communications, as they are the market leader in each of these areas. We then bring their native provider tools and channels into our applications via the bot framework. We've talked that extensively on this call. But to be more specific, CoreInteract and our other applications reside in Microsoft's Azure platform, cloud platform. And again, I'm going to come back and explain the difference here with our competitors' architectures. But by building our solutions in Azure through the Bot framework, you can see Microsoft has invested a significant amount of dollars and focus and resources into this market. And we can build our solutions in this Azure, taking advantage of the Bot framework and driving as we build features and functions through the Azure platform. And then last but not least, we deliver the customer experience of our applications into Teams. In the Microsoft presentation earlier, they expressed how Microsoft is investing heavily in this Teams play or platform as a single home, a single home to receive your communications, interact with your business, do your business workflows. And as you can see, ZAACT is very experienced in that exact arena. And so as we deliver our solutions natively into Teams with those 3 components, we start to differentiate ourselves from our competitors. So let me -- I, too, am not [ connected ] with this platform. Okay, here we go. So let me explain the difference between what our competitors are currently doing versus what we are doing, and why that gives us a competitive edge. So as I noted in the beginning, the first layer is what originates or where do the communications originate. Virtually all of our competitors have built legacy PBX and phone solutions, PBX and voice solutions that they bring their voice or e-mail or chat through, right? They're not using Microsoft as the provider for those services. They have, over the years, built up a massive phone and PBX solution and they're trying to retrofit that into Teams. Second of all, unlike Altigen, their solutions are built, typically, on virtual servers and other things in AWS. Microsoft told me early on that we were -- CoreInteract was the only contact center, they didn't have a better word for it at the time, contact center solution in the market built in Azure. And as anyone knows, AWS is Microsoft's largest competitor, and that is where the true battle is being had. Being the only provider of a solution in Azure helps them sell our solution, and the partners understand our solution better. And then last but not least, they then try to deliver their experience into the Teams interface. And while it may look like it was part of Teams because of the Presence and things, that's really the only point in which they are integrating, is when it finally gets down to the end user chat level. And so while a complicated topic, the Microsoft partners we do business with truly understand this. And why? Because what it does is it actually allows them to truly extend or leverage their Microsoft investment. Most companies have invested in M365, they've invested in Teams. They're paying for voice. They're paying for these services. And to have to go pay for a secondary provider to do all these extras is a huge gap that Jerry identified well in the market. And the reason that exists is because while Microsoft's solutions were released, they are missing a few key features that allow companies to fully go that direction for customer engagement and tools, which is where we sit, right? Also, as noted in the Microsoft presentation earlier and in Mike Hejsak's presentation, we can consolidate our Azure management and security by keeping things inside the Microsoft Azure Active Directory authentication components, right? We can keep the users truly single sign-on in the application, not having to leave externally to a third-party cloud and link that back into Microsoft, then try to link that solution, opening holes for hackers and other things. So we maintain a much higher security. And then obviously, last but not least, based on Microsoft's extremely large investment in the bot framework and Teams, we have better application extensibility. We can take and really drive our solutions forward with modern AI and modern technology, leveraging Microsoft's investment and making the best of it. So now that we truly understand the difference between a Native Architecture and Teams "Integrated" application, let's jump to our solutions and kind of look at our road map: where we've gone, how we've gotten to them, and we'll walk through the solutions individually. So first, just a recap of where Altigen has been and the foundation upon which it was built and where we've changed this last year. So the old Altigen is, sometimes we refer to it, is a very reliable PBX and small business solution. While little innovation happened, the product was very complete and a very reliable, again, PBX solution. In the roughly 9, 10 years from '98 to '07 as Altigen launched their primary PBX solution, it was a hardware-centric, very proprietary device that you deployed on-premise. And again, little innovation happened other than the feature sets that were existing. From 2008 through 2014, so roughly 7 -- 6, 7 years, Altigen made the move to shift this to a software-based PBX as opposed to specific to hardware. However, again, while little innovation happened on the application itself, it was moved to a software solution so that you could put it on Windows hardware or other servers, as opposed to being dedicated proprietary hardware. And then in -- from 2015 to '20 is where we really started setting the groundwork for where we are today. The first was to move that legacy PBX out of the data centers of the individual customers and move those to the cloud, eliminating any on-premise or hardware requirements, and that over roughly 5 years, right? Although the application generally, again, remained the same, the way we delivered it improved, and Jerry made a great decision to start our transition to the cloud. But what's now happening is the acceleration of what we can offer via the cloud. So let's talk about, now not in time frames of years, but in time frames of months, as to what's changed over this last year. So in FY '21, we -- as Altigen acquired Blue Panda, which is where I came from, we launched FrontStage as a contact center on that legacy platform, we launched a version 1 of CoreInteract and we significantly expanded our development team in preparation for -- as you see the first half of FY '22. We have completely filled our pipeline with products ready to release. We have announced a CoreAttendant for Microsoft Teams. We've announced CoreEngage for CoreInteract. We are launching Workgroup Insights for CoreInteract, and we'll go through each of these here shortly, including moving FrontStage to our new MaxCloud platform instead of just MaxCS and into Teams. We've introduced new high-level security and caller authentication types for Fiserv, our partner; and including our new PBX and UC platform, MaxCloud, which has a lot more features and functionalities than our previous offering. And then moving forward, for the second half of this year, we're going to really continue our rapid innovation and product releases by introducing our services portal to make it easy for all levels of business, whether it's carrier level, whether it's partner level or customer level to come in, order services, provision services and have things ready to go at their fingertips. We want to extend CoreInteract's functionality with channels that can communicate with across the bot framework. We want to integrate CoreInteract with our other contact center applications as well. And then also now, with ZAACT involved, we are going to really deep dive into adding cognitive and AI technologies into our products across the board and then, of course, adding things like call recording based on customer demand and feedback. Okay. So let's quickly run through each of the products I've mentioned, and I will really go over highlights. Obviously, more questions are welcome at the end, and we can send out those later, starting with Core Attendant. We, at Altigen, got our feet wet with a freemium model, something to seed the market to find out who in the market is using Teams as a voice platform. So we launched a free tool, Core Attendant, because everyone needs one to have a receptionist console, and operator console, embedded native to Teams that people can quickly receive and transfer calls in other company. We wrote this on top of CoreInteract so that people could have functionality that they previously wouldn't have had in their organization, but a light version to, again, to open the door for us to who is using these Microsoft Voice Teams platform. So it has performed exactly as we expected. It's really been a lot of interest, especially in the U.K., and people are really coming to us looking at this as a free tool to understand. And that tells us, again, who is using Teams Voice and opens doors for us on that front. Moving on to the product we've mentioned many times on this call, CoreInteract. It was the first digital customer engagement platform for Microsoft Teams, again, written fully in Teams and Azure, fully native to the bot framework. We route, we queue, we analyze and report on all interactions throughout the customer engagement process and deliver those into Teams, improving your customer service, increasing employee productivity work, so keeping them in the tool that they're living in, which, again, earlier in the Microsoft presentation, you saw that, that is Microsoft Teams and not having to swivel seat to different windows and solutions to perform all these functions and enhances the management insight and deployability of the Microsoft voice and chat functionality. So I'm going to attempt to show a recorded live demo that we did just previous, and what I'm going to show in this demo is how easy it is to build a communications workflow integrated to Microsoft Dynamics, and I'm going to show this in less than a minute on a video. And our customers who have made the choice to go to Teams Voice with Teams native functionality have felt this was a big miss, and they are very happy when they see how easy it is here to perform this function in CoreInteract. So I may leverage the pause button here, so bear with me. Hopefully, this works. What you can see here is I'm going to go through, and I'm creating from scratch a white canvas to create an inbound communication flow of a main phone number to a company. You'll see I have named it my main line. I've given it a revision number. And I'm choosing Teams Voice as a channel, which, as noted earlier, in our native solution, this is coming straight from Microsoft's calling plans or direct routing. I'm going to then enable CRM, which means I've already configured a connection to Microsoft Dynamics. And as you can see, I'm going to add a logic card so that as a call from Microsoft teams comes in to CoreInteract, I'm going to look to Dynamics. I'm going to look for the customer phone number, and I'm going to look up just if it exists. It's that simple for us in this visual builder to create a call routing and flow integrated to Microsoft Dynamics to then deliver the call based on various things like hours of operation. As you can see, I'm doing here, what happens if it's a holiday, what happens if it goes to a menu, and you can quickly just drag and drop and create these on the fly. This has been well received in our CoreInteract 1.0 version released to our customers. And you can see how easy that is, and that has been to do. So jumping to that. Next product is CoreEngage. So as we released CoreInteract and while everyone was happy about how easy it was to configure the back end, we received immediate feedback that they would like to see a client front-end or client application in Teams to be able to have more views as to what's going on and who they're receiving inbound communications from as well as a great place to display the integration with Dynamics and display who's calling and what's coming in. So we created CoreEngage as that productivity app for the employees that are customer-facing to be able to receive long track customer interactions and one quick access to look at their call history or their communication history, their workgroup, their voice mails and collaborate with other workgroup members to see who's communicate, also with customers in the moment if they're busy, what your staffing looks like and how your customer experience is going. And it starts to bring contact center functionality into Teams, as Jerry noted, at a much better price point. I will attempt again to do another recorded demo here, to just kind of show how that looks. You'll see, first of all, that we are natively in the Teams application. We've opened CoreEngage as an application. A call has started to come into Teams. Our application, actually presents to the user who is calling with detail about that customer before the call even is fully presented to them. So almost as a screen pop. This is where we're extremely excited. We've built this application and this workspace to be able to work with ZAACT, to go into customers and let them customize this experience to bring in other business processes and workflows all throughout, even the workflow builder, I showed in the previous CoreInteract, all the way into this application so that we can have process automation and other things. Obviously, with this demo I'll just show what it looks like to receive this call from Teams, native Teams experience. We received the call. I can take notes about this particular caller. You'll see I'll take notes here. And then I can complete the call. I can do things like log that to a particular account code or put it in a category. And you can see it shows me my history of conversations with this particular customer, I can see notes. And all of this can be integrated with customers' back-end solutions through ZAACT. And so this is why we're so excited, again, to have ZAACT involved in this discussion. We believe that this application will also drive quite a few professional services. Yes.

I apologize for interrupting. The videos aren't playing. So I thought will give you heads up. Yes. They might be playing except they're not playing for, I believe, the audience.

We are worried about that. So maybe I'll just skip the demo then and talk to the screen. Okay.

Okay.

Next, we've recently announced and released Workgroup Insights. This has been a huge demand, again, from our customers because what Teams failed to deliver out of the box was the ability to see in real-time what is going on with your customer service people, the people engage with your customers. What are they doing in real-time? Are they taking too long to help? Are they responding? Are customers dropping out before abandoning? Are they abandoning as they are waiting to talk to customers? What are your stats and what's going on in that environment? This is -- so this is what Workgroup Insight fills. It gives a daily summary each day with performance metrics. You can set goals and SLAs that you're trying to meet as a team. And again, with companies like ZAACT, we're going to drive this data home into their other business applications and really start to display data that helps the customer with their customer engagement. We can enable performance monitoring for remote employees and those that are home, as we talked about this move to employees being mobile workers and what that -- how this helps say, a supervisor or someone manager to sit and view what's going on with their team. They can also -- you'll see us expand this as we build out innovation and technology and Microsoft works with us to add more supervisory-type functions to this product. Sounds like the videos aren't working, so I'm going to skip, but I was showing an incoming call with the stats displaying, et cetera. Okay. And then...

Mark, just for the attendees to click on the animation and they can play it for themselves.

Oh, great. Okay. Do I need to go back to that? Or should we just...

Maybe just go back one and try it and it did work for me. So maybe if everybody sees in the lower left-hand corner, the arrow, the play arrow and click that and hopefully that works for everybody.

Okay. I'm going to click play right now and talk through to yourself, the audience is clicking play and watching. You can follow along this one again is a little less inactive as we're just watching a workgroup set up with me and Jerry and Mike. We set up again previous to receive an inbound call. You'll see the stats will change in real-time as the call comes in. You'll see that Mike has now picked up the call. You'll see he's -- I know it's very small, and I apologize, but you'll see all the stats of live conversations in total. It's in real-time, providing great value to our customers. Okay. And I think the slides can be shared later so we can play these videos at will. As Jay noted, we do also have our full fledged contact center solution via FrontStage. We have been diligently working to get this also into Teams natively as well as integrated to our new PBX platform, MaxCloud. And this is, again, the full-blown contact center that meets that high-end need. That 5 -- 10% of employee base that needs very specific contact center needs, applications, monitoring and tools and reporting. And this is a design for, again, those high-volume customers. It is omni-channel today built with voice, video, SMS, web chat and social media. And this experience you're seeing on the screen, as you can see it, again, small, but is in Teams natively, not having to leave your Teams' experience to get a much more detailed information. Also why it's so small is because there is so much information on the screen. But again, very detailed contact centers really enjoy this type of information on a very competitive price -- at a very competitive price point, even cheaper than some of the major high-end contact center solution providers. So just a couple of screens from this as the videos aren't working. You can see here in this screen, again, native to Teams. End user is receiving an inbound customer service e-mail. You can see on the side here the various inbound calls or e-mails or texts that this agent is dealing with. You can see your time and how fast you're responding and doing those types of things. You can see you can fully respond via e-mail in the full Teams' experience, love them to get to what phase and category and subtopic, et cetera. So very detailed and a very native Teams' experience with that. And then here, very robust reporting, which is, I think, most critical for the high-end contact centers. They -- high-end contact centers live and die by efficiency of their agents in the call center. So reporting is critical, and FrontStage does a great job of delivering this KPI metrics and call data insight of Teams through a football context. I can see where they're at, what they're doing and keep up with the demand of their high-volume contact center. So that's all I have. No, wait. One more, apologies. Oh yes. With Fiserv, we have taken the time this year to build what we call easy access, call authentication with biometrics. This is a platform that allows our Fiserv and financial institutions to block fraud or detect fraud prior to it coming into the agents in the banks. This is a huge vulnerability today. Most fraud in the banks is performed by calling in and tricking a contact center agent and then disclosing information about bank accounts and other things. And we have worked with a technology called TRUSTID to authenticate the caller and validate callers enrolling in this program with various voice, print and trusted source information so that before that call is presented to an agent in the bank, they are shown on the screen. I know it's kind of small, but they're shown in the screen on a very large display if it is authenticated or if it's a trusted user, eliminating at least some risk that this person calling in is of a trusted source. This is something we've worked on for a while and is now rolling out to all of our customers at Fiserv as well as we grow our financial services software portfolio. And this is a unique model. It's paid for per call. And so there are no real, I want to say, deployment cost with this as much as it is if banks adopt this. To be displayed as authenticated, they quickly can integrate this into their call flows, and we can display whether or not the call is trusted. So again, that is, I think, all I have officially. And I hope it now is a little more clear as to why our strategy with Teams what looks like why we're developing native solutions and how ZAACT is going to help customize these solutions to our customers' needs and drive that spend up and deeper into those customers. So with that, I'll turn it back to Jerry, who will probably turn it to Paul.

Yes. Thank you, Mark. Good job. And just...

Jerry, if you don't mind, this is...

Okay. Gary, go ahead.

This is Q&A moderator, I apologize. Just so everyone is aware, yes, these slides will be posted on our website after the conference concludes, and those will include the video snippets that Mark was referring to. Apologies for that. Thank you. I'll turn it back over to you, Jerry.

Thanks, Gary. Yes. And I guess, I'm probably the chief violator here. If something is not in Teams, we don't know how to use it. And so there are apparently some technical snafus with playing these video clips. But yes, in addition to seeing those video clips, we're also happy to schedule either a group or individual demos with any of our applications with anyone on the call today. So we appreciate that. Okay. So we've talked about all the wonderful things that we're doing. And yes, these are quite exciting, and I'm not sure some of that -- maybe we're getting a little bit technical, so I apologize if we're getting too technical, but we think it's really important to share with you what we're really doing here and why we think it makes a difference. And I can assure you from the market perspective, it does make a difference from what we're doing and the partners we're signing, the customers that we're engaging with. So with that, I'm going to turn it over to Paul Fullman, our Vice President of EMEA and to give a brief overview of business activity on the other side of the pond. Paul, take it away.

Great. Thank you, Jerry. Hello, everyone. So yes, talking about our go-to-market strategies. Well, I'm just getting my slide go on here. So key for us here, some key objectives that we've got coming in this year and actually building on that initially is looking at growing our channel partner base, right, from 10 this year to get to 15. How are we going to do that? It's been a challenge, right, and it always is a challenge for organizations like ourselves to actually just keep hold of our resellers, right? Because there's always other solutions out there. There's always somebody else trying to pitch similar types of solutions that we provide, and it always comes down to a kind of a price point thing. Right now, we're in a fantastic place because we have an opportunity to be able to increase that channel because we're providing something that no one else is able to provide. So looking at getting to that 15 base, right, this year, targeting voice and data resellers, and Microsoft resellers in particular, is key for us. When you look at our products, CoreInteract and FrontStage, particularly CoreInteract, we're also aiming at getting to 2 CoreInteract sales per month, right? And in terms of how we're going to actually achieve that is, again, a lot of these partners, right, you've seen it from Mike, you've seen it from Mark earlier, the difference between our solutions is that a lot of organizations, particularly over the COVID period, have adopted Teams somewhat. Now they're looking at really trying to switch Teams on and replace their existing voice systems. So they're having a challenge to do that because these key features that Mark was talking about, that really are important for business continuity for these organizations. So we're able to provide that. We're able to go through these partners to existing customers that either have already migrated to Teams or are looking to migrate and provide these key solutions that enable them to deliver these key features that allow them really to continue as they have been when they used to use their legacy systems but actually doing it through a Teams environment. When it comes to FrontStage. FrontStage is a contact center solution, an omni-channel contact center solution. Key here is the same thing. One of the things we keep hearing and have heard over the years from customers, in particular, is, don't show me a solution that isn't native to Teams, right? There's an awful lot of options out there and there's a lot of customers that are moving away from those solutions because there are problems, right, in complexities in having these third-party solutions that have some way of connecting to Teams but not fully integrated. They want to see it as an integrated solution. And if you have a look at some of the capabilities and the native integrations with Teams with the FrontStage, that's something that is resonating with our customers. So aiming at one sale per month, right, for that enterprise contact center capability is part of our solution. Go-to-market plans in terms of how we're getting the message out. So webinar workshops right with strategic Microsoft partners. We kicked off one this year with one of the organizations that Mike showed on his slide earlier, a company called Bytes, who have thousands of Microsoft customers that they sell Microsoft licenses to. Again, this goes to understanding how we position our products to provide them with capabilities to give their customer solutions that are unique. What that does is it provides them with a sticky service, right? We kind of mentioned that in terms of they need to be sticky, right? So their version of Teams, for example, is going to have our capabilities and our advanced features in there that means that it's going to be seen as the norm, right? It means that they're always going to be there, and that's one of the biggest challenges for all of these partners, is trying to retain those customers because everybody is always trying to eat at their base. So they see this as a really good way of being able to safeguard those and to upsell solutions to existing customers that already have Teams that is not quite doing it for them, right? They also then can see how this is going to increase productivity for those customers and also drive ROI, right, by using our applications within their Microsoft Office framework. Direct engagement with Microsoft is one of the key things here that's really valuable here in the U.K. The reason for that is because there's a number of Microsoft key personnel that deal with specific sectors so finance, education, public sector being 3 key ones. All of those capabilities that we're talking about, all of the stuff that Scott talked about earlier, where they're evangelizing the bot framework, they're talking about marketplace, so talking about ways of adding these capabilities seamlessly natively aim into that Teams environment. To help them drive their own revenues means that it puts us squarely in front when it comes to Microsoft, once you recommend us into opportunities. So we're having conversations with end users and each of those main sectors being driven by the Microsoft engagements that we have here in the U.K., which has been tremendous. And the final piece here on this is that Jerry mentioned earlier and Mike was talking about, direct engagement with large enterprise customers. This is extremely valuable to us. Why? Because we're talking about thousands of users, right? It can be thousands of users here in the U.K. or could be spread over different regions. And the challenge in the past has always been how you deliver our solutions, right, with some of the complexities in some of these large numbers of users and the requirement for the integrations, all those things have been challenges for us. When you have products like CoreInteract that's native and you're talking about a product, right, in its voice handling and routing can be deployed in about an hour, right? It's part of an Azure service. It means that these large enterprises have a migration that's already either happening or it already happens to Teams. We're able to add our solution seamlessly into that environment. So -- and these are organizations that see the value in this and they see how much they would normally pay for this, right? So it gives us, again, a tremendous opportunity to sell into these environments. And all of these customers are looking at typical plans or typical contracts that start around 5 years. So not only is it safeguard, the fact that we're getting that SaaS revenue every month, but as Mark showed to you, right, when the new capabilities, features start coming out, there's upsell opportunities in there all the way along. So it's pretty exciting. I was at a sales event from one of our new partners. They had about 15 sales guys in there, and we've been talking about contact center for a long time because Microsoft contact center solutions have always been kind of similar. Our own MaxACD solutions, we've had over the past 10 years have been similar to other solutions out there. And one of the things that the sales director said to me was, "You keep talking about FrontStage, which is fantastic, by the way, because it's an omni-channel solution. But you get really excited when you talk about CoreInteract." And I said, "Yes, because the reason for that is that the experience I get when I'm actually showing this stuff to your customers, right, where we're on these calls, when I say, look, I'm not going to show you a PowerPoint presentation anymore. I'm just going to show you my client log in to the administrator and show you how simple this process is and then allow them to call in to a number I've just created." And you can see how they buy into it, right? You can see how excited they get in terms of the opportunities that you can see that this can enhance how they do things within their business. Anyway, that's our strategy. It's an exciting one, and it's already starting to pay dividends now. So thank you.

That's great, Paul. I just want to clarify one point because I added your slides, and I don't think I made it clear. Your objectives are per partner, right, for 2 CoreInteract sales and 2 FrontStage sales. yes. So that was my mistake on that one. And I will have to say -- I told Paul, we need more partners and he's got one partner right now that he briefly mentioned that is already booking them up for 2 or 3 customer demos a day. So I barely have time to talk to Paul, and he's got his friend, Jack Daniel's coming over every evening, so I don't want to interrupt that. But I've got to get up really early in the morning to catch Paul before he's on his appointment. So I know that things are going great guns in the U.K. And I think you did a good job explaining that, Paul.

Thank you. Thank you.

Jerry, just a couple of quick questions if you don't mind.

Sure.

The first one is related to Mark's presentation, we'll just close this one off real quick. Mark, the question was, are the products you just showed already for customer use.

All products shown are either announced or being announced this month. So yes.

I think we announced them all, Mark. We probably tracked them. We announced all of them. So yes, they're all ready right now.

I was trying to be safe. I was trying to be safe just in case we hadn't. But yes, I think they're all...

Yes. Second real quick follow-up here for Paul with regards to the objectives that you mentioned. Can you quantify those in terms of dollars? I know it's early in that process, but if you have some comment on that, that would be great.

So yes, I mean in terms of -- if you look at CoreInteract, right, then you're talking about each customer. And just taking an average because the difference between CoreInteract and FrontStage. FrontStage is very much contact center-based, right? So it's those specific contact center users, and you're talking about kind of an average around 65 agents per customer that would be spending in -- certainly in sterling anyway. So obviously, we're charging here. But around about $100 per agent per month would be your typical sort of point there in terms of the number of users. What I'm finding with CoreInteract, which is interesting is the price points are lower, so around about GBP 30 to GBP 35 per user, but the number of users fluctuates. It goes from sort of 50 to suddenly 1,600, right. So depending who the customer is. So we're kind of seeing those types of numbers, those types of -- and I would say with CoreInteract, it's right about the 200 user point is what we're seeing as opportunities that we're actually planning to proof of concept right now. Does that make sense?

Yes, I think that's very helpful. Go ahead, Jerry.

Yes. I think just a case in point, Paul, as you're talking about those ranges, it's -- CoreInteract is kind of like carpenter ads. Once they get in, it just it takes over. And we're just at the very early stages with CoreInteract. And as Mark mentioned in his presentation, and we mentioned on some of our conference calls, customers were asking us for more capabilities, when we originally released CoreInteract. Because the original release was just -- we'll do all these wonderful call routing things, we'll deliver the call in Teams. I said, well, I want a UI, I want reporting. This is what came out with CoreInteract -- pardon me, CoreEngage and Workgroup Insights, which are now available for customer deployment. So -- but we start small, like I said, in the enterprise world, and it might be a single work group or a small group of users, 25, 50. But the typical enterprise organization has thousands of users that need this solution. It's just -- you can't herd all the cats at one time to hit that deal because they're all different departments under a different line of business managers or C-level executives, but it does permeate throughout the organization. So that's the land-and-expand strategy really with CoreInteract more so than FrontStage. Because FrontStage is more we're going to deploy your contact center. Yes, hope you grow. We'll make some nice revenue but CoreInteract is that seeding strategy that can permeate throughout the enterprise. And I think that's what you were saying on your range, Paul.

Yes, absolutely. And we're starting to see -- I mean one example is -- and talking about how busy wherever stuff going at, we have a proof of concept, which is about to start for a company here that we spoke to 18 months ago that's looking for a contact center solution. And they tried other products, Anywhere 365 was one they tried. They kicked them out because there was issues with it. Very expensive. In the end, what we realized is that actually, although they're asking for an awful of features and capabilities, the key thing they need right now is simplicity, right, and then that enhanced capability. They're going with CoreInteract, okay, having what we have now, planning for us to give them everything else, right, by September this year. So -- and they've done that based on the fact that when they looked at how simple the product is, they said, we can work around what our original requirements were now to actually make this fit because it just works for us perfectly. Now that also started with like 40 users 18 months ago. Now they're talking about 160 users because lots of different other departments is going to be using this stuff. So it's an ever-changing, nicely for us in the right direction in terms of the revenue opportunity. And that's the typical conversations that you're getting with customers. Because CoreInteract is so new, there's nothing to compare it to. They try and compare it to small center. But as soon as they start seeing it and realizing what it gives them and how it enhances and improves the Teams' environment, that's when they start saying, "Well, I'm paying less per user, perhaps I can have more." Right? And they're great conversations.

Yes. Absolutely. And we're certainly seeing it in your pipeline. Yes. All right. Well, thank you very much, Paul.

Thank you.

Okay. So I'm going to turn the call over now to Mike Plumer, Altigen's VP of Sales. And Mike is -- he wears multiple hats for us in his VP of sales roles and not only managing our Teams business but also single-handedly managing our Fiserv business and, of course, our legacy business. So Mike, I believe you're going to talk about all 3, so you've got the floor.

Okay. Great. Thank you, Jerry. Thank you, everyone, for attending today. So just to start out, we'll kind of add on a little bit more to what Paul is just speaking about and also some of the earlier speakers, specifically Mike Hejsak. So with Microsoft Teams, there is huge momentum because of the adoption of Office 365. So now called Microsoft 365, literally hundreds of thousands of companies have deployed. Many of them are using some Teams components. But a small percent, maybe somewhere between 5% and 10% are actually at the point where they have migrated everyone off of their existing PBX platform, whether it was on-premises or hosted to Teams Phone System. And so we're at that early stage. So there's a few challenges around that, but the potential and momentum is tremendous. So if we have the right solutions and the capability to deliver, I think we will be well rewarded, but plenty of work to do there. For the customers that are considering migrating to Teams Phone System away again from their whatever platform they have today, the big challenge that they have is, first, being able to identify the gaps that are occurring between the platform they've been using and what is in Teams. So Teams is a great platform, but it is not complete, and so that's where Altigen is coming in and other solutions. Also from the partner, who's going to consult and deploy and support this technology? If I'm working with my existing Microsoft partner, they may not have any understanding of voice. That may be completely new to them. So the potential customers for Teams Phone System are searching out and trying to figure out, okay, how do we do this? And so that's where in our channel program coming in with partners, we can not only to the customer help deliver a complete solution, but we can assist that Microsoft partner who's already the trusted adviser to those companies in delivering a complete solution. So that is a lot around our positioning. Paul touched on each of the kind of the core areas. This actually makes us unique. There are companies that are offering adjunct contact centers, some are offering maybe an attendant console. They may have a product but not a deployment service. So this is a lot to bite off. But if we're successful with this being able to have a comprehensive solution, it not only simplifies things for the customer but it also makes it much easier for the partner who is trying to keep the customer and keep their other Microsoft competing partners out of that mix. So they -- and this is a constant kind of weed-and-feed evolution with the partner channel with the old kind of 20/80 rule, who's really delivering the opportunities to us. But for that 100 to 1,000 user market we're focused primarily on partners because they, again, are the trusted adviser. They're able to bring us into the opportunity, and it would be impossible to get to the right people in those organizations in any other way as effectively. And so we want to continue to grow that channel. We've signed a little more than 70 currently active partners. We want to grow that to 100 active partners. And again, it's a never-ending effort because people merge, people change focus. And so we've got to keep replacing what might fall out and keep adding to that. For the larger enterprise-sized customers, 1,000 to 5,000 employees, we're focused on those direct because it's usually the case where those large, large enterprise customers, they're able to deploy some of these capabilities in-house themselves. They're less dependent on the partner but kind of leads us to the last one, the strategic alliance with some global Microsoft partners historically, sometimes known as LARs that provide the licensing because Altigen is not providing the Microsoft licensing. We don't compete with our partners in that way. But for the large enterprise customers, they're just searching for who can provide the easiest services and most cost-effective access to that licensing. So we want to get some alliances with some global partners so they can really help us identify who is utilizing not only 365 and Teams, but who may be adding Teams Phone System licenses because we need Teams Phone System to be in place in order to sell the complementary suite of applications. So back to the go-to-market plans then. We're focusing on this unique positioning where we really can be one source complementary to the partner, supplementing what they do, whether it would be services or applications. And with our 25-plus years of expertise in the voice area and also all of that being based on Microsoft, we are also, I think, in a unique position to help -- work with a company and identify the gaps and help them work out a plan of how they could transition away from their on-premise Cisco system or Mitel system, whatever it might be, as they shift over to Teams. We will also continue to directly market again to the larger end users, and we will continue our push with not only adding partners but further developing the existing partners that we have. So that's an area that we can certainly expand, and we want to add more training in that area. Let's see if the animation works, okay. So just -- this is not a forecast, I'll warn everybody. But just to kind of put some average numbers of how we're looking at it is we're trying to budget what the opportunity is for our direct routing trunk service. So that's if the customer uses our SIP trunking versus the Microsoft calling plan. Depends, again, on the size of the customer but just we're using usually a conservative $800 a month of recurring revenue. If they have an opportunity for the FrontStage omni-channel contact center based upon the typical number of agents that we see, again, this is kind of starting out smaller. This would represent maybe 18 agents, something like that and growing. And we see, though, the biggest opportunity long term with the CoreInteract suite and the customer engagement capabilities because, as Jerry said, once we get in there and some of this is providing a solution to something they may not be aware they have a problem quite yet. But if we can provide that contact center capability to customer-facing employees that could really start making a dramatic difference, especially when we add in now some of the integration capabilities that we're gaining by bringing in ZAACT, as mentioned earlier. So the bar chart at the bottom is just showing some examples of if we had X number of customers at the average recurring monthly revenue, $37.50. What would that look like? Again, this is not a forecast. This is just to put some guidance of what the potential is if we're successful at executing the strategy. Okay. And then moving on to Fiserv and our fintech strategy. As Mark covered a little bit earlier, we've really expanded our offerings with Fiserv this year, and I'm just going to touch a little bit more on a couple of the areas that really stand out. So what makes this unique with what AltiGen is doing with Fiserv? So a key, if you see kind of the highlighted in Orange on the left side, the Fiserv IVR. That's the bank by phone application. You call into the bank and you enter your password and pin, whatever it might be. And you can get an account balance, you can transfer records. It's kind of the legacy bank by phone application. In some cases, it was viewed as maybe, in time, decreasing in use as people are using mobile and home banking. What's interesting is during COVID because of limited access that customers and members of credit unions might have had to going into the local branch, the IVR usage increased, and it was good timing for us because we have been making significant enhancements to that platform with Fiserv. So one of the enhancements is doing a major upgrade on the speech recognition, and we replaced kind of a legacy platform with Microsoft's speech capabilities through their cognitive services. We're also incorporating in -- this is still in kind of the testing stage, but we're incorporating in some AI capability to provide a more natural experience and that then leads us into the authentication area. So why do we need to do authentication? As Mark mentioned, there is a challenge if I'm someone who's going to attempt to cause fraud, I will call in and speak with an agent and mislead them get some account information that sort of thing. So that's one challenge, and that's costing banks and credit unions a lot of money. But the other area is how can we utilize the same technology to make it easier for the customer to get their routine information. And a challenge that a bank or credit union has is on average, and these are statistics we get from Fiserv, about 70% of the calls into the contact center, which are very expensive calls on average TLRs and $0.50 a call, those are calls about account balance. And especially when the stimulus checks were going out or not going out, people were calling multiple times a day to find out, has my check cleared? Has my check hit my account? So there's still a lot of use there. At the same time, the banks and credit unions are hoping to attract younger users, like under 30 years of age to self-service. And how do they do that? So there is also now a tendency for younger users to use voice-activated applications. And so when we added the authentication component, we can not only use that to validate who the caller is, but to also improve the experience on getting routine account information or even doing routine transactions. So with the easy access that's a component of the IVR, it's a service, it's enabled, it's pay-as-you-go, it's based upon usage. But if I have that enabled, and we're just rolling this out at a Fiserv customer site, the caller could be driving in the car. And they could -- if they have the phone number preprogrammed in their iPhone or their Android phone, they could say, "Siri, call my bank," Siri calls in, and it will recognize the device and the caller ID. So the hardware device is used as a token to authenticate that at least device calling in is valid. And on top of that, we give them the option of enrolling using voice biometrics. So I could have a phrase that the bank selects such as my voice is my password. And it could then say, "Thank you for calling. Your account balance is X, your last transactions are Y," whatever it might be. Or with incorporating in the AI capability, it could say, "How can I help you, today?" And I could say, "Wondering how much money I have in my checking account." "Oh, I see you have 2 checking accounts. Is it the first checking account or the second checking account?" So anything that we can do to entice the customer to be able to utilize self-service through the IVR not only helps the customer because they don't have to queue calling into the contact center, but it's technology that clearly pays for itself. Because if I'm removing the fraud component by eliminating the agent authenticating the call and I can encourage callers to get a better experience by calling into the IVR, it's probably a $0.30 cost to the bank, talking to an agent is $2.50, and so that -- we map that out to a customer, it very clearly makes sense. If I'm a bank or credit union that -- it's not just stopping the fraud, it's stopping calls from coming into the contact center and improving that overall experience. So as Joe Selveraj we work with closely mentioned, we've got a large installed base on the IVR. So we have the first pilots just beginning there for this new authentication capability, and we want to take that out to all of them. So we actually have a call Thursday with Fiserv, a little bit more discussion on rolling that out and how do we get that implemented because that is a great recurring revenue opportunity based upon usage. We also have -- just to go back to the top bullet, we have between on-premises and hosted on our earlier MaxCS platform, we have right at 100 customers that have the PPX and/or contact center. So Fiserv has made the decision that all of those customers will be migrated to the new platform, MaxCloud, and that anyone who has enabled contact center will be migrated to the new FrontStage platform. So in the past, we had just a voice contact center. Now we're moving to the omni-channel contact center. So if the customer enables any of those other channels, that's also an increase in recurring revenue that we can get from those existing customers. And because Fiserv is the largest provider of technology to banks and credit unions, there are many thousands of other Fiserv customers that we can go after. So in total, Fiserv has nearly 5,000 banks using their core account processing, but they're servicing and providing solutions to more than 10,000. So they have a huge customer base that we get to work with directly going in there. And so with our go-to-market plans, we are -- again, we work hand-in-hand with Fiserv. We join them on many of the presentations. We're in daily calls with them. There's a big effort going on right now. The data centers have been moving to be able to provide true geo-redundancy, active-active capability with these new solutions. So there's been some kind of behind the scenes heavy lifting going on. But once everything is in place, as Joe Selveraj, pointed out this morning, we're putting in the effort to put in something that is scalable. And we don't want 100 customers. We want many more than that. So we're going to earn it by putting out a good solution and having quality support and everything, but we're building the right platform. We can also continue to expand just the integrations that we have. So as Joe mentioned, we're not only integrated with all the now 15 core account platforms, but we are integrating with CRM and cross-selling platforms, home banking platforms, all kinds of things within Fiserv. And personally, I'm excited with the addition of ZAACT. In addition to all of the things, just for Fiserv alone, this could really increase our ability to deliver some custom integrations by customer, which we've generally not been in the position to do before and also maybe speed to market some of the other things that we've wanted to do in the bot area that really apply in the banking sector. And Ryan did a good job describing America First Credit Union, what they've done there developing an internal bot. That could be replicated at other customers. So some of this is a little bit of just making sure we don't bite off more than we can chew, but all of this is definitely headed in the right direction. The last comment I would make is that for Fiserv and fintech in general is banks and credit unions, specifically banks are very conservative on their technology. They're usually the last to shift. And many of the banks had enterprise agreements with Microsoft, and we're not early adopters of Microsoft 365. They are in that process now. So where companies might have been 2 years ago, they're actively migrating to Microsoft 365 now. And one of the things that we're hearing from a lot of these customers is that probably at least 70% of the banks have Cisco phone systems. They're being pushed to go to Cisco's hosted offering. But because they're already making a large investment in Office, now Microsoft 365 and starting to utilize Teams, they're wondering, "Do we go to Cisco or Mitel?" Well, Mitel's now kind of abandoned their cloud offering and is shifting to RingCentral. So that's a great shift for us because all of those former ShoreTel customers and Mitel customers are being told that the MiCloud is going away and they should be looking at the new, well, for the Mitel folks, the RingCentral platform instead. So that is very, very disruptive. So the larger customers that have on-premise deployments, they are interested in trying to understand how they could look to Teams as the phone system. And to the comment on the earlier slide, that's where we can come in. We don't care if they want to go to our MaxCloud platform, that's great. We can be a bridge even short term where they could put the contact center on either our MaxCloud platform or Teams Phone System, and then later migrate the rest of the branches and everything to Teams Phone System. So long term, there will be a major, major shift to Teams Phone System in the banking sector. And we look at, again, just kind of for our internal budget purposes. If we look at our SIP trunking average revenue per month, and the Fiserv customers can range in the size from 80 to 300 users. Generally, it's a little bit all over. But safely, we can estimate 1,500 a month in SIP services. Again, with the TRUSTID, we have the unique wrinkle on that because we're adding security, the unified communications, that is the PBX with the new enhancements, the MaxCloud platform. And then the Contact Center as a Service is the FrontStage suite. And pretty much every single one of these customers will have contact center. And again, this really expands the opportunity because we can sell the other channels. And up to this point and working with Fiserv for nearly 16 years, we have only been providing voice in the contact center. So if this partnership continues well and so far, so good, and we can really get the solutions easy to deploy and easy to support. Over time, this could be a tremendous opportunity. And then last, I'll touch on our kind of legacy customer base that the company was built on but has been transitioning now as everybody has mentioned for 5 or 6 years here, all of these on-premise small business systems that we've had. The key focus here is conversion of the existing customers. So if we take an on-premises customer, and we're receiving software maintenance from them once a year and are able to convert them to our cloud offering to MaxCloud, we're, on average, going to receive 6 to 8x the amount of revenue, possibly even more if they enable contact center. It depends on the size of the customer. So right now, the group we have here, we're reaching out to customers directly and focused on that. This is a smaller opportunity because of the size of the customer. But the SIP Trunk service, about 200. If -- the MaxCloud PBX portion, 350. And the Contact Center, 500. So that doesn't -- just all add up, it depends on what they're using on average, but we're estimating about 600 per customer. And there is also some potential for this to expand for the Microsoft partners. They may run into some customers that Teams is not the perfect fit for and they may be able to transition some of those users or, let's say, in a manufacturing environment, maybe some of those users may need to be not on Teams because they don't have the Microsoft licensing. We expect some growth there, but the primary strategy for MaxCloud is just the conversion of these existing customers on-premises and migrating the cloud customers that we have over time to be able to sell them the additional services with the expanded capability. Okay. So Jerry, I think that's all I had there.

Mike, I do have one follow-up question for you, if you don't mind.

Okay. Sure.

And this is -- yes, in regards to the partner components, when you talked about the partner part of your presentation, can you talk about some of the incentives or commission structure that we offer to partners?

Sure. If it's a Microsoft partner, we offer an agent program and a reseller program. So the agent program means that they can bring us the opportunity. They can be involved as much as they like, and we will pay 20% for the recurring services for the life of the customer. And we can do all the contracting everything, but we have some flexibility there. If they are acting as a reseller, we have stair-stepping margin based upon actual revenue success. And that, today, the program is structured so that, that can go as high as 30%, but there are also some add-on services that they have the potential to mark up. But I would say at a minimum, whether it's an agent or a reseller, they're going to be receiving 20% recurring revenue and Altigen willing to do the heavy-lifting, if necessary.

Thank you.

Yes. Maybe I'll add on to that, Mike, because that is one difference between, let's say, the legacy Altigen partner channel and the Microsoft partners, the legacy Altigen channel. By and large, these folks were experts in our solution right, and they provided all the services and completely manage the customer, so we didn't need an agent program. And I'll put a shout out to our friend in Kansas City, who's on the call that has done a fantastic job for us. But some of those folks that are, let's say the legacy partners, some are just dialing the wall, telephony folks and some like our friend in the KC area, also understands the team. So they'll be able to leverage what we're doing on both sides of the business. So yes, I think it's -- there will be some growth opportunities, but a lot of it is even when Microsoft is going to be -- I hate to -- I don't want to say dominate the market because that gets them in trouble competitively, but well, they're going to certainly be a big player. And anybody that's taking a look at RingCentral stock price and I would say ours notwithstanding, you can see that they are starting to feel the pinch for Microsoft Teams. And both our Microsoft partners and our best legacy partners understand that, and we'll shift our customers that way as well.

Okay. So I'm going to shift over now. Thank you very much, Mike. I appreciate that. I'm going to shift over, everyone, to the financial metrics, and Carolyn David. So I don't sound like Carolyn, I don't think. She's come down with COVID, and that's -- she didn't take my advice, which is some say an apple a day keeps the doctor away. I say a shot of vodka or depending, at least one shot a day will keep the doctor away, but she's learning. But today, she's out, so I'm going to review the financial metrics with everyone. Okay. Waiting for this to advance. So we've taken a look and we've got some of our shareholders that are asking a lot of questions about what are the key performance metrics, what are we tracking? So we've actually implemented a new program this fiscal year where we have 3 key considerations. One is cloud, I'll call it -- sorry, core cloud subscriber growth. Because we have some ancillary cloud customers using Office 365 and some other pieces of our solution, but the core cloud is Altigen and Fiserv. And so I just want to show this is growth. This is not -- when you see the down doesn't mean we're losing. It just means it was less than the prior year. So what we expect to see is, I think, this year will -- let me -- I'm sorry, let me point to FY '21 because it's a bit of an anomaly. We actually grew our business by over 20% in FY '21, yet our cloud revenues were about flat. So I want to deal with that for a moment. And the primary reason for this, how in the heck can I grow subscribers by that amount and have flat cloud revenues, right? And a lot of that was due -- that was really an FY '20 COVID effect where we had increased -- we didn't have some -- very much subscriber growth. In fact, we had very difficult time with churn with our SMB customers that did not get PPP and went under. But because of COVID, their usage went way up. A lot of usage went way up. So that was -- we call that a bit of an anomaly, but those subscribers are still there, and we do expect to continue to grow that subscriber base to the tune of about 16% this year. And you can see it accelerating as we roll out new products, continue to grow to over 30% in a couple of years here. So these are -- to us, that's a really important metric on how we're doing it ourselves. And then along with that, how are we doing with our core cloud average monthly revenue per customer, right? That's -- those 2 pieces really make up success or not. So we can see where we're at. This is overall -- this includes everything we do on the core cloud. So it's Altigen plus Fiserv and all of the various components. And now it is -- subtract out the Fiserv-hosted IVR revenue because it's not associated really to a particular customer. That's a multi-tenant platform. But you can see that we were up about $800 a user in FY '20. We dropped down to about $775 in FY '21, and that was really because of the reduced usage on our SIP trunks. But yes, we expect to grow that increasingly in the next couple of years, up to about $900 a year per customer in FY '24. So when you look at our subscriber growth plus our revenue per customer growth, if we're able to hit those targets, that's going to spell very good things for Altigen. Okay. So my final slide is I know something that the investors pay attention to, and it's the Rule of 40. So I want to speak for that in a moment. We were up about 35% in FY '20. In FY '21, we pretty much took it on the chin. I mean that's no surprise. We -- everyone knows our results. Primarily, we did not do a very good job of cloud revenue growth. And because of that, we had invested heavily in our new platforms and therefore had higher expenses based on revenue because we weren't able to release the products in the time that we expect to release them. So not a real good performance in FY '21, but we're expecting FY '22 the way we're tracking both in terms of cloud. This is overall cloud revenue growth, and I'm using this as not the core cloud anymore because there's no way for me to separate out adjusted EBITDA if I just do core cloud. So this is total cloud revenue growth. You'll see that we're going to start inching up or inching up on this slide, but it's actually pretty good strides over the next couple of years with our new solutions, where we expect to be ahead of the Rule of 40 in a couple of years. And as anyone knows, it looks at the statistics, if you're ahead of Rule of 40, you're doing pretty well. There's -- only the successful companies were able to achieve that metric. Okay. So this is actually the final slide before we open up to Q&A. So I just wanted to recap what we believe are the opportunities with Altigen. And we're certainly banking a lot of the new UCaaS and CCaaS solutions that we're putting out, and I'll separate those out because that's for our legacy base and for Fiserv. But in addition, with Fiserv, the new fintech solutions included the extended IVR capabilities and what we talked about is easy access with the TRUSTID and voice biometrics. Our new team solutions, we spent a lot of time on that in terms of what we're coming out with, with CoreInteract and the CoreInteract extensions as well as FrontStage. And of course, FrontStage does apply, not just the Teams, but also to Fiserv and to our legacy base. Everyone -- that's available for everyone on those platforms. And then finally with ZAACT, with what they're going to bring to us, not only in terms of revenue and -- but in terms of the -- being able to penetrate larger accounts because of the services that they can provide and the credibility they provide us in those larger accounts that we need to have in order to secure those opportunities. So in my opinion, we are really very well poised and ready to execute on an accelerated growth business plan with what we have sitting here today -- with what we have sitting here today. So at this point, I'm going to turn it over to Mr. Gary Maske, who's we've heard a couple of times. And Gary, you're going to please provide us with any Q&A that we've received from our audience today.

Thank you, Jerry. A couple of questions have come in. The first one here is a follow-up for Mike, Mike Plumer. How does the 20% to 30% that you mentioned in regards to reseller share, how does that compare to other products that our partners could sell?

In some cases, it's less. If they are a Microsoft partner, those margins are good and viewed as good. If I'm a traditional telecom reseller, and that is quite a nice sight to be open. And so you've got companies like RingCentral and others that are offering all of the commission, in some cases, upfront for 1 year, and they're also doing short-term incentives and because I think, again, there's just such extreme pressure to continue to show the growth that they've had. So yes, if I'm selling regular phone systems, there are other products that they can't -- just be open. They can't get more money upfront. Our challenge is if we do that, the numbers just don't work. And I don't know, Jerry, if you want to comment on that, but on the Microsoft side, I think we're in great shape. But yes, the old traditional telecom guys, that's tougher.

No, we certainly talk to a lot of partners, so we know where our competitors are at. And I won't mention a single competitor by name, but I believe their scrambling at the moment offering some very high margins because they're losing market share to Microsoft Teams, and I believe we see that in their financial results. But what they do differently than us is they pay on the contract term. We pay on the life of the customer. So actually, their strategy is to pay a lot of money on the contract term. And I've talked to many partners and said, "Well, okay, I worked with vendor A, competitor A. But at the end of 3 years, I'm going to push competitor B because I don't get a renewal from competitor A but I get paid again from competitor B." It's really not a very good strategy, and I believe we see that playing out now in the financial results. So I believe that our program, paying out over the life of the customer, really rewards our partners better than the short-term gains. But sometimes that's hard to see.

Excellent. Thank you. Second, I guess, kind of set of questions here, Jerry, and relative to the ZAACT acquisition. Can you talk a little bit about some of the financial details that can be shared and which will be shared at a later date? And some of those bits and pieces, I've got a number of questions here around that. But if you could talk to some of those, that would be great, and then we'll see if there's any follow-ups, sir.

Yes, absolutely. So yes, I mean some of the details we're going to disclose guys, once this closes. So that would be something on the size of the acquisition, the margin profile. I believe Ryan did comment that they've grown nearly 20% a year in the last few years. And then I can comment probably on the recurring versus onetime revenue. Right now, they are closer to -- well, pretty close to 100% onetime revenue, but actually, they have a lot of recurring revenue that they're not booking as such. So we're going to change that because they have lots of support contracts that are actually monthly recurring revenue, but they're not treating it that way. The finance -- the transaction going to be financed is approximately 80% cash and about 20% stock. Well, that's how it starts. And I just want to be clear to everybody it's, okay, boy. It's a crappy market to be issuing stock, and the way the stock is doled out is over 3 years. So the initial year, 1/3 of the 20% will be paid at the end of year 1, whatever the stock price is at that will be also 1/3 and then at the end of year 2, 1/3. And so yes, this company, I can assure you, they're nicely profitable. And yes, it will absolutely be accretive. We wouldn't do a deal that was not accretive, and it will be nicely accretive to our shareholders.

And one other question that's come in so far, Jerry. What is the plan for Ryan and the other ZAACT team to play in the overall management team at Altigen?

Yes. I would like to hesitate -- I'll hesitate to answer that just because we haven't closed yet. But each one of the -- and there's 4 members of the executive management team in ZAACT. And we were -- all of us at Altigen, all of our executive management team very impressed with the ZAACT management team -- executive management team. In fact, we were surprised they had such quality people for a relatively small organization. So I'll give you a hand, they're a little less than half our size. So that will be one piece of information for you, but these are quality people, and they are going to come in and assume executive management roles with Altigen. So -- but we haven't closed yet, so I prefer not to -- we do have titles for everybody, we do have roles for everybody. But since it's still pending, it's probably better not to talk about that at the moment until we have a guarantee, which I mean, we're 99.9%, but just to make sure it's closed before we disclose that.

Another question for you. Pretty pointed here. Why did Joe Hamblin leave?

Well, that's a good question, and I would say it wouldn't have been my first choice. I didn't ask Joe to leave. And Joe -- we did introduce Joe to a number of shareholders. And Joe was certainly part of many of our conversations, not only with ZAACT, but we interviewed many, many other companies prior to ZAACT that didn't really fit our requirements. And when we met ZAACT, it was pretty clear that their management team was going to dovetail writing with our management team and there -- and even made the comment in the press release. We would have been management top-heavy for sure because there are some very quality executive management people at ZAACT. And Joe said, "Hey, look, I think we're poised here. These guys," he said, and I'll just tell you, "Whether it's politically correct or not, these guys are younger than me. They can get the job done. They're going to run your company a lot longer than I could. This is probably a good time for me to take a high-paying income job and just kind of closed on in my career." So hopefully, if Joe is listening, he's not going to dispute that, but I believe that's what the situation is. And yes, and I said, "Fine. Hey, Joe, that's fine. We're still friends." He'll stay on us as a strategic consultant, but I can't emphasize enough how strong the ZAACT management team is, and they're going to come in. And well, we've got plenty of folks to run our business here.

We have another few seconds here. That's the last of the questions that have been posed.

Okay. I know we have -- sorry? Gary?

I'm sorry, we just had one other one pop in. I think that will have to hold off on until after the transaction closes. But valuation metric used for ZAACT EBITDA, EV versus sales. What would the sales multiple be? Any recurring revenues, which we've kind of already touched on? So I don't know if you want to talk about any of those or if we need to wait until after the close.

ZAACT actually has quite a bit of recurring annual revenue because many of their contracts are not onetime engagements. Many of their contracts are extended engagements with customers. So they do actually have quite a strong annual recurring revenue stream. But yes, until we close, I think it's better not to disclose that. We will disclose that. We'll -- everyone will know what ZAACT's revenues are and what the purchase price is, and I think everyone will be quite happy with the structure that we put together with ZAACT that will reward them for performance but also protects the shareholders and make sure that everyone is going to be a winner in this transaction.

One other question here. Can you talk about the sales cycle time? And that may be a question for Mike or Paul or Jerry. What is the sales cycle time looking like?

I'll defer to Mike on that. Mike is closer to that than I am. But Mike, if you don't mind?

Sure. I'll just kind of take it by category. If it's our existing customers that sales cycle can be fairly quick. If it's an on-premises customer once they understand the financials, it's just a decision, "Okay, can we do it or not?" On the Fiserv side, we can generally get to a decision after engaging with an opportunity with Fiserv in 3 to 4 months, but it may be tied to a larger conversion. They may be switching to Fiserv's core account processor or moving from one to another internally. So the actual time to deployment can be 6 months, 9 months after a decision is made. On the Teams side of things, it depends on the timing. So if somebody is already on 365 and ready to begin utilizing Teams Phone System and they're usually going to do it in a phased approach, then we can start getting them there pretty quickly with the direct routing capability. So again, depending on just where you're at in that process. If it's contact center, that's going to take longer to deploy. They probably would migrate contact center last. If it's CoreInteract customer engagement, we need them to be using Teams Phone System. So it will really depend by kind of area of product. Now an interesting thing with ZAACT is there may be some capabilities there to help people accelerate their migration to Teams, whether it's SharePoint or something else that they need to move over to complete. But yes, it really depends kind of by category and in the Teams' space by product type, too, of how quickly we can put something in there.

Thank you, Mike. Jerry, a question for you, sir, maybe for Ryan, if he is still on as well. Number one is, when do we expect the ZAACT acquisition to close? And the follow-up to that is, does ZAACT stand for anything?

Yes, I asked Ryan that. Ryan, are you still on?

I am on, yes.

Okay. Do you mind addressing?

I'll answer that question first. What does ZAACT stand for? So ZAACT is a play on 2 different words. It's a play on act and it's a play on the word exact. And the idea, if you kind of look at our logo, it kind of has some different colors that kind of come together throughout the Z. And then -- so they're not together and then they come together and then they form the Z. And so our concept was that we wanted to be -- we wanted people to trust us to act appropriately and to be exact on what we wanted to do. So that's the play on the words.

And then as far as closing is -- we can -- Ryan, I think you and I can best give a -- we can -- our best guess each is probably about 2 weeks, where we're just putting some additional paperwork together on due diligence and as our auditing firm is requesting various things, so we're close.

Yes.

And final question so far. A question for you, Jerry, in the financials. The Rule of 40 chart that you showed, what is the headcount growth assumptions that you made in building out that chart?

The headcount growth for those numbers, really not much, guys. I'll be honest with you because we don't have a 3-year headcount plan clearly. It's way too far to plan the headcount. But what I can tell you is that we have excess capacity in our sales organization. So what I do know, and I've talked about this on some of our earnings calls, our development expense will continue this year to be -- to decline. And we will -- we're going to take that reduced development expense as we're shifting our development resources to less expensive resources in many cases to mostly the sales and marketing. And then as we get together with ZAACT here, the additional project management account managers to penetrate accounts. So we don't have -- it's not going to be a linear number to hit that, but I can tell you my -- maybe I can better answer this by saying I believe on the Rule of 40, I'm only looking at about 15% to the bottom line in '24, which I believe is quite conservative. And you can see those, I think, on that -- on the chart. You will be able to see those in the chart once we publish because you can't see it anymore. So I think we're pretty conservative.

Very good. Other question here, is there an average size of client or a company that ZAACT works with in terms of number of seats or number of employees?

Ryan?

So I can give you the answer to that. The answer is kind of yes. The reality is what we have found is that some companies have fewer employees, but they've got some spend and they've got some needs and they want to really dig deep and develop. And they can afford that, and they want to do that. And some companies with a lot of employees, a little bit tighter on what they want to do to outsource and they bring in consultants for. I would say as a rule of thumb that we probably align ourselves pretty well with Microsoft in that either 500- or 1000-seat employers. Probably fit what we do best. Kind of the midsize or larger enterprise clients is what we tend to be very, very successful on. So maybe that's roundabout answer, but we've kind of found success with a number of different ones, primarily in the larger enterprises, though.

Yes. I think we align pretty well in that category, Ryan, where kind of the -- one of the first things we talked about, right, to make sure we're in alignment even going to market is we're both more or less calling on customers between 1,000 and 5,000 employees. And of course, there might be less, might be more, but that's kind of our sweet spot, and that's one of the good synergies we have.

One other question that just came in, Jerry. Who owns the ZAACT? Or maybe -- for Ryan, I guess. Who owns the IP that ZAACT develops, ZAACT or the client?

We spend a lot of time on that. So Ryan, I'll let you answer that one.

That's a good question. Generally speaking, ZAACT owns the IP on everything that we built. So my background is software development. The interesting thing there is you build something once, you want to retain it so that you can reuse it multiple times if you need to. Our master services agreement states that we own the IP on what we build. But obviously, we give that to the clients so they can continue using it and have that source code going forward as well. But we generally own that code. So...

All right. That's all we have for questions. Thank you. I'll turn it back over to you, Jerry, to close us out here.

Okay. Yes. Thanks, Gary. And thank you, everyone, for hanging in there with us. I know we got pretty deep early on in the call. I thought Mark did a nice job of bringing it back to say the terms at least I can understand, so I hope you guys could as well. Some of that stuff was pretty deep. But we planned on this to be -- we were guessing about 2.5 hours. It looks like we've gone closer to 3, so we really do appreciate everyone hanging in there. I believe -- and I think all of us do here, you can tell by the conviction in the folks that are speaking that we have a tiger by the tail. And I guess I'm going to just divert from my script for a moment in that one other time in my career here at Altigen, shareholders gave up on the company, and that was back in about 2014, and I made millions when they gave up. And I think we may be seeing some of the same today, and we believe that this is going to be -- we're going to be doing very well going forward. So I can only say for the shareholders exited, thank you. And for the shareholders hanging in there, I believe we're going to deliver a nice return. So -- and I'm going big, I can tell you that as well. So I do appreciate everyone's attendance here, and we look forward to updating you on our next -- I think our next call will be our quarterly earnings call in April. So thank you very much, everyone.

This concludes today's conference. You may disconnect at this time. Thank you for your participation.