Last quarter, 8×8 suffered a revenue drop of two percent year over year (YoY).
Reacting to the news, Samuel Wilson, CEO of 8×8, blamed: “Continued challenges in our CPaaS business in the Asia Pacific region and higher-than-expected churn in our Fuze customer base.”
Moreover, he underscored increased carrier pricing for SMS and the pressing need to downsize Fuze contracts as significant obstacles to its CPaaS business.
Thankfully, this quarter, 8×8 bounced back to revenue growth, reporting a two percent rise (YoY) – while its stock increased by 31 percent after a 24-month slump.
Now, Wilson believes its CPaaS business and Fuze transformations are in a much better place.
Discussing the latter during an earnings call, Wilson stated:
I think last quarter is probably the worst. It got a little bit better this quarter… we saw a quarter-on-quarter significant improvement in the number of logo churn.
“We’re still dealing with a little bit of rightsizing, especially as we upgrade the customers to 8×8. I think it will get better in the next quarter and the quarter after.”
Wilson also described each of the top 400 Fuze customers as “a little bit of a snowflake” when going into more detail about the “upgrade” process.
Yet, he said defiantly: “I’m not going to force that top 400 to move over.”
Moreover, Wilson was much more buoyant about 8×8’s CPaaS business, praising the performance of the APAC team after previously noting teething issues in the region.
“CPaaS killed it in Southeast Asia,” he said. “Their pipeline activity is up. The revenue produced was up. It was a great quarter in CPaaS, and there’s a lot of room to run there… We’re in the box for just some super large CPaaS deals.”
Importantly, Wilson also noted how CPaaS has become the backbone of its CCaaS and UCaaS platforms – helping each to grow new arms and legs.
Sharing an example, he said: “We recently introduced Remote Fix, a prepackaged second-generation video escalation solution targeting field service organizations.
We also introduced Omni Shield to our customers, safeguarding enterprises from fraudulent SMS activity.
“Now more than ever, I believe our CPaaS business will prove to be a competitive advantage for us.”
Finally, Wilson took questions about possible downselling head-on – with reports across the CCaaS industry suggesting some vendors oversold seats when businesses first moved to the cloud.
For this reason – and others – February 2023 Metrigy research suggested that 48.2 percent of companies now using cloud-based platforms (either CCaaS or hosted/managed cloud dedicated servers) are changing, planning to change, or evaluating a shift in providers by the end of the year.
As such, customer loss or – at best – downselling seems a significant risk for several providers.
Thankfully, Wilson confirmed that downselling – with Fuze as the possible exception – hasn’t posed a significant revenue threat to 8×8.
“I’ve seen a little bit of down-sell pressure… where 100 seats becomes 97 seats because they’ve shrunk their play… but it’s not meaningful,” he said.
Such shrinking is likely the result of a rise in contact center AI and self-service usage.
Meanwhile, increased use of agent-assist tech is also helping contact centers lessen their loads, with Metrigy naming it the “biggest driver” of the seven-year high in fully-staffed contact centers.
Elsewhere at 8×8, the vendor debuted a voice self-service solution, workspace upgrades, and a deeper salesforce integration earlier this week.