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HOUSTON, WE DON'T HAVE A PROBLEM. Mike Burns, CEO of A+ Conferencing

16 August, 2003

Our publisher and executive editor, Bonnie Belvedere, interviews Mike Burns, founder and CEO of Houston-based A+ Conferencing, where Mr. Burns discusses everything from air conditioning, erosion, vacations and monetary exhibitionism. Read on!
Bonnie Belvedere: What's the funniest thing you've ever seen happen with a conference call in your career in this business?

Mike Burns: One of the funniest things that happened in my previous company was an operator-assisted call where two departments of the same company were hosting simultaneous calls. As the conferees dialed in, they asked to be placed in the company call, not knowing that there were two calls going on. One of our operators also did not know that there were two calls going on for the same company. Therefore, many of the conferees were placed in the wrong call. What was funny was that when you listened in to the call, the conferees were trying to make sense out why they were all in the call. The confusion lasted for about 20 minutes until one of our operators figured it out. They quickly replaced the people into their correct calls and everything turned out okay, but it was a stitch for a while listening to mass confusion.

BB: How did you get into the conferencing industry?

MB: When I graduated from college, I went to work for Southwestern Bell. I spent a combined 11 years working at SBC and AT&T, where I learned the applications of telemarketing and teleconferencing. In 1982, I left the Bell System and started TeleSystems Marketing, a call center business, specializing in
the telecom and non-profit industries. In 1989, I formed Conference Pros International, a teleconferencing company, that offered automated and operator-assisted conferencing. In 1999, I sold CPI to Vialog. In 2001, I started A+ Conferencing, so A+ is two and a half years old.

BB: What's the one word that describes A+ Conferencing the best?

MB: Flexibility. To elaborate, we feel that we have to be very flexible in meeting the needs of every master agent, reseller, and customer. We are willing to explore any possible relationship to realize revenue opportunities.

BB: Is A+ Conferencing primarily a wholesaler of audio conferencing services?

MB: We perceive ourselves as wholesalers and we work hard at developing master agent and reseller relationships. In actuality, if you examine our revenues, the alternate channel brings in about 50% of the revenues to A+. The other half comes from advertising and telemarketing.

BB: What percentage of revenues come from private-labeled resellers?

MB: Less than 10%. Most of our revenue from the alternate channel comes from master agents selling the A+ brand.

BB: How does your own A+ conferencing service compete with your resellers and their private-label services?

MB: This is one area where A+ has a nice fit with the alternate channel. A+ does some advertising, web
marketing, telemarketing, and some trade shows. We do not have any direct sales people on the street. Our direct sales force is our agents and resellers. We defer to them. If there ever is a conflict, we always side with the agent/reseller.

BB: Which PSTN audio bridging systems do you use, and why?

MB: We use the Multi-Link 700 and the Voyant (Octave 1000) platforms. We started with the Multi-Link platform because we were familiar with these systems at Conference Pros. We then added the Octave bridges. We feel that these bridges are the most reliable and have the best price performance.

BB: Which web-conferencing technologies do you use and why?

MB: At A+, we have a concept called "the web conferencing store", where a customer can come to our web page and shop for the technology that they are looking for. We offer Raindance, WebEx, Placeware, LoudEye, and WebDialogs. We have a lot of customers that come in and are familiar with a certain web technology and we want to be able to accommodate them.

BB: What do you do when your customers want video conferencing services?
MB: We outsource our video conferencing to a specialized vendor; however it is not a large part of our business.

BB: What does A+ Conferencing do for the "high-touch" operator-assisted requirements in conferencing?

MB: We have our own operator services department here at headquarters in Houston. Our operators have an average of 8 years experience in handling high-touch Q&A calls and investor relations calls. We also use outsource vendors on occasion, when the traffic warrants an extensive use of operators. Our operator services traffic is growing, but is a small percentage of the business
compared to reservationless service.

BB: What's the organizational structure at A+?

MB: Our major departments are agents/resellers, telemarketing, operations, billing, and MIS. We are
very light at the top and we believe in empowering our department heads to run their shops as they see fit. "If you've got a problem, fix it!" Don't worship the process and seek permission to act. "Forgiveness is better than permission!"
BB: Can you take vacation and not call in?

MB: Yes, but they always seem to find me. These cell phones reach everywhere.

BB: What's your view of price erosion for automated audio and web conferencing services?

MB: Price erosion is a fact in the industry. You can simply look at what has happened to long distance rates and predict that the same will occur in the conferencing space. That being said, there are some ways that providers can combat price erosion and protect their margins. One way is to provide more value added services, like teleservices, seminar registration & fulfillment, affinity programs. These are programs that differentiate your service from the 100 one-person websites out there that offer generic cheapcalls. Another way is through creative pricing methodologies, like flat rate pricing, where you give the customer unlimited usage for one price per month. What we are finding with flat rate pricing is that it is like " the health club plan". The customers pay you each month whether they use it or not. We are amazed at how many flat rate customers we can stack onto a bridge and not busy it out.

BB: How will price erosion affect your business and the businesses of your resellers over the next three years?
MB: I think that price erosion is having an effect on our businesses now, but with our efforts in providing value added services, creating new pricing methods, and adding new services, such as voice messaging services and desk top video, we will do fine in the future. Price erosion also forces us to examine our expense structure continually in an effort to remain a low cost provider of services.

BB: How do you compete against the larger conferencing services companies? What are the differentiators of A+ Conferencing in the market?

MB: I feel that A+ is effective in competing with the larger service agencies in terms of flexibility - the philosophy and corporate culture to meet the customer's needs on their terms; value-added services - providing extra services that larger companies do not offer, and pricing alternatives - offering flat rate pricing, port leasing plans, and bridge management.

BB: What's your opinion of VOIP technologies, and when will it have an impact in the market? What is A+ doing now to deal with the prospective impact of VOIP conferencing?

MB: VOIP has been evolving for quite some time now and it is currently being deployed in carrier networks. At A+, we use exclusively PSTN services because of the high quality. Also, pricing for long distance services on PSTN is now in the sub two cents per minute area so why not have the best quality service available at an equally low rate as VOIP. My concern is the quality level of 500 conferees on a conference call over VOIP. I think the quality will eventually be there and we will be monitoring its development.

BB: What's your take on Microsoft's Live Meeting as a competitive threat to A+ Conferencing and the entire conferencing industry?

MB: I think that Microsoft's purchase of Placeware placed a gold stamp on the legitimacy of the conferencing market. It has emerged from a niche market into becoming an everyday tool in the business arena. Even if Microsoft were to give the service away for free, there would still be a need for audio bridging, operator assisted calling, and future services such as desktop video.

BB: What about Do you think they are a long term threat to the conferencing industry?

MB: I compare the free services to the likes of NetZero, who used to give away internet access for free until they went bankrupt with the dot com bust. NetZero now offers internet service for $9.95 per month, like the rest of their competitors. I don't consider them to be a threat in the industry.

BB: What's the long term growth plan for A+ Conferencing? Are you going to continue growing organically? Will you acquire other companies or be acquired?

MB: We plan on growing A+ Conferencing organically, both wholesale through acquiring new agents and resellers and retail through telemarketing. I think that in 2004, M&A activity will pick up in the telecom and conferencing area. Our eventual strategy will be to be acquired by a larger company, but in the meantime we are having a great time enjoying the business and growing it like mad.

BB: So what's the price to acquire A+ Conferencing?

MB: "Show me the money!" as so eloquently stated by Rod Tidwell in Jerry McGuire.
BB: What's another company out there in the conferencing space that you admire and why?

MB: One company that I have always respected is Premiere Conferencing. They have always had a great reputation in the industry and their sales force is recognized as one of the best out there. They provide quality service with quality personnel.
BB: Hmmm. I'm having an image of Bo Jones showing you his money over drinks at the Ritz Hotel in Buckhead, but I digress. What's the best thing about living in Houston, Texas in the summer?
MB: Air conditioning.

BB: Well then, I guess you could take your air conditioner to Atlanta. Thanks for the interview, Mike! Like the nuns used to give me in grammar school, you get an A plus! Good luck with A+ Conferencing.


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