Businessmodel of Verint Systems

Customer Segments

Verint Systems has a niche market business model, with a specialized customer segment. The company targets its offerings at any firm that seek analytics software, but its solutions are primarily used by law enforcement and government agencies.

In 2015 one-third of its revenues were generated from contracts with local, regional, and national agencies around the world.

Value Proposition

Verint Systems offers four primary value propositions: accessibility, innovation, performance, and brand/status.

The company creates accessibility by offering a wide variety of options. It has acquired numerous firms over the past decade, including MultiVision Intelligent Surveillance Limited, a provider of networked video security solutions; CM Insight Limited, a provider of customer management solutions; Mercom Systems, a provider of interaction recording and performance evaluation solutions; ViewLinks Euclipse, a provider of link analysis and data mining software solutions; Witness Systems, a provider of enterprise workforce optimization solutions; and Iontas, a provider of desktop analytics solutions. These additions have enabled it to significantly diversify its portfolio.

The company places a strong emphasis on innovaton. In the past decade it spent over $1.0 billion on R&D, and has 700 patents worldwide. It also maintains the Verint Open Innovation Network, which  promotes innovation and collaboration on an industry scale. Firms that are members of the network can use Verint’s patented technologies in their solutions to create enhanced offerings for consuemrs.

The company has demonstrated strong performance through tangible results. High-profile examples of positive outcomes for specific clients include the following:

• New York Life implemented Verint Workforce Optimization, resulting in a 24% drop in attrition, higher first-call resolution, and a percentage point increase in customer satisfaction
• Elavon utilized Verint Quality Monitoring with Speech Analytics, resulting in the saving of nearly 600 accounts worth about $1.7 million in revenue within the first three months
• Technology Services Industry Association (TSIA) used Verint Enterprise Feedback Management, resulting in a more than 150% increase in completed customer survey responses
• VSP Vision Care used Verint Workforce Optimization, resulting in reduced call handle time, increased customer satisfaction ratings, and savings of $3 million in the first year alone
• Securitas Direct used Verint Speech Analytics to improve its understanding of client perceptions and improve the customer experience, resulting in a 100% ROI in a single year The company has established a strong brand due to success. It generates over $1 billion in annual revenues and has over 5,000 employees globally. It serves over 10,000 organizations in 180 countries, including more than 80% of the Fortune 100. Lastly, it has won many honors, including the 2016 CRM Excellence Award, the 2016 CEO World Award in the “New Products, Upgrades, and Innovations” category, and recognition as CRM Magazine’s Service Winner for nine years in a row.

Channels

Verint System’s main channels are its direct sales team and its indirect channels, which include distributors, value-added resellers, systems integrators, and original equipment manufacturer partners.

Indirect channels account for approximately half of its overall sales. The company promotes its offering through its social media pages and seminars, forums, symposiums, summits, expos, and conferences.

Customer Relationships

Verint System’s customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:

• Support Services – The company offers a wide range of maintenance support plans that include phone, online, and email access to technical personnel up to 24 hours a day, seven days a week. Depending on level, plans also offer upgrades when and if available and on-site repair/replacement.
• Implementation/Training Services – The company utilizes service organizations, authorized partners, and resellers to assist in implementing customers’ systems. Specific services include project management, system installation, and commissioning. It also offers training programs for its solutions that are provided at public training centers and on the client’s site. Lastly, it offers certification programs that enable students to sell, install, and support its solutions.
• Consulting/Managed Services – The company provides management consulting services that include business strategy, process excellence, performance management, and project/program management components.
  Despite this orientation, there is a self-service component. The company enables customers to participate in its training program online in a self-paced format. Furthermore, its website features a “Resources” section that includes data sheets, eBooks, infographics, and videos.

Key Activities

Verint’s business model entails designing and developing its software for customers, and manufacturing products where necessary. Its internal manufacturing operations primarily involve installing its software on externally purchased hardware components, assembly, repair, and testing.

Key Partners

While having its own manufacturing operation, Verint also utilizes manufacturing subcontractors to supply specific proprietary hardware components and produce, assemble, and deliver certain hardware products and solutions. In addition, the company relies on third parties such as hosting providers and other cloud-based service providers to deliver certain services to its customers.

The company maintains two formal partnership programs:

Customer Engagement Optimization Partners – Firms that work with the company to deliver solutions for contact center/back-office/branch operations, trading floors, and public safety organizations. They include the following:

• Channel sales partners that sell Verint’s products to their customers
• OEM partners that bundle Verint‘s workforce optimization solutions with sales of their converged communication infrastructure hardware solutions
• Hardware and technology alliance partners that integrate Verint’s solutions with theirs for streamlined deployment, added functionality, and more seamless operation Specific partners include TimeTrade, Avaya, and Unify.

Cyber Intelligence Partners – Firms that add extra value to Verint solutions. They include system integrators and distribution partners that deploy and support Verint networked IP video solutions across a wide range of operating environments. Specific partners include Dell and EMC.

Partners receive a wide variety of benefits, including access to resources such as brochures, data sheets, and product video clips; training certifications; and access to the Partner Portal.

Key Resources

Verint’s main resources are its human resources, who include the technology employees that design and develop its software, the sales employees that promote it, the training/consulting staff that provide instruction and advisory services, and the customer service employees that provide support. The company maintains manufacturing facilities in the U.S., Germany, Israel, and Cyprus.

Lastly, it places a high priority on intellectual property, with over 700 patents and applications worldwide.

Cost Structure

Verint has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent product enhancements.

Its biggest cost driver is cost of revenue, a variable expense that includes cost of product and cost of service/support. Other major drivers are in the areas of sales/administration and research/development, both fixed costs.

Revenue Streams

Verint has two revenue streams:

• Product Revenues – Revenues generated from the sale of hardware products (including software that works with the hardware to deliver the product’s functionality) and licensing of software products.
• Service and Support Revenues – Revenues generated from installation services, post-contract customer support (PCS), hosting services, project management, SaaS, product warranties, application managed services, business advisory consulting, and training services.