What changed in this filing

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Item 1. Business

2020-09-11 compared with 2019-09-12 · 201 added, 195 removed, 119 unchanged (77% of the section changed)

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements may be identified by the use of the words such as “anticipates,”

“believes,”

“continue,”

“could,”

“would,”

“estimates,”

“expects,”

“intends,”

“may,”

“might,”

“plans,”

“potential,”

“should,”

or “will”

and similar expressions or the negative of those terms.

These statements may be identified by the use of the words such as “anticipates,” “believes,” “continue,” “could,” “would,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “potential,” “should,” or “will” and similar expressions or the negative of those terms.

The forward-looking statements include, but are not limited to, statements regarding:

the impact of the COVID-19 pandemic on our business, employees and customers;

our SaaS only business model and our belief that it affords recurring revenue visibility, more predictability and 50% faster time to value to SaaS clients;

our belief that SaaS revenue better reflects business momentum;

expectations regarding our revenue, including visibility and predictability;

our beliefs regarding the value of our platform;

the opportunities afforded by automation of contact centers, innovation in cloud and growing API economy;

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the adequacy of our capital resources and our ability to raise additional financing;

the effect of our failure to comply with our obligations under our Credit Agreement ;

the development and expansion of our strategic and third party distribution partnerships and relationships with systems integrators;

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the operational integrity and maintenance of our systems;

the effect of unauthorized access to a customer’s data or our data or our IT systems and cybersecurity attacks;

the uncertainty of demand for our products;

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tax legislation;

the effect of compliance with California privacy laws and regulations on our business and our customers;

our inability to successfully detect weaknesses or errors in our internal controls;

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Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expected.

These risks and uncertainties include, but are not limited to, those risks discussed in Item 1A “Risk Factors”

in this report, as well as our ability to manage our business plans, strategies and outlooks and any business-related forecasts or projections;

These risks and uncertainties include, but are not limited to, those risks discussed in Item 1A “Risk Factors” in this report, as well as the effect of the COVID-19 pandemic on our business;

our ability to manage our business plans, strategies and outlooks and any business-related forecasts or projections;

our ability to effectively implement and improve our current products;

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We expressly disclaim any obligation or undertaking to update any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

All references to “eGain”, the “Company”, “our”, “we”

or “us”

mean eGain Corporation and its subsidiaries, except where it is clear from the context that such terms mean only this parent company and exclude subsidiaries.

eGain and the eGain®

are trademarks of eGain Corporation.

All references to “eGain”, the “Company”, “our”, “we” or “us” mean eGain Corporation and its subsidiaries, except where it is clear from the context that such terms mean only this parent company and exclude subsidiaries.

eGain and the eGain® are trademarks of eGain Corporation.

We also refer to trademarks of other corporations and organizations in this report

eGain is an innovative software-as-a service (SaaS) provider of customer engagement solutions for a digital world.

We have operations in the United States (U.S.), the United Kingdom (UK), and India.

Some of the largest business-to-consumer (B2C) brands in the world—especially in the financial services, telecommunications, retail, government, healthcare, and utilities industries—rely on eGain to quickly operationalize their digital transformation strategies for customer engagement.

With our mantra of AX + BX + CX = DX™

, we guide them to effortless DX (digital experiences) by optimizing not just CX (customer experience), but also AX (agent experience) and BX (business experience).

A unified customer engagement hub from eGain gives them connected artificial intelligence (AI), knowledge, and analytics capabilities to automate self-service across touch points and augment a digital-first, omnichannel agent desktop to reduce service cost, increase upsell, and improve business agility.

In fiscal year 2017, we completed our transition from a hybrid model where we sold both SaaS and perpetual license solutions to a SaaS only business model.

Today, we only sell SaaS to new clients and are actively migrating our remaining perpetual license clients to SaaS.

As we continue to migrate our legacy perpetual license clients to SaaS, we expect our non-SaaS recurring revenue, primarily comprising annual maintenance and support fees for legacy perpetual license clients, to continue to decline.

We believe our go-forward SaaS business model affords us recurring revenue visibility and more predictability.

Fiscal year 2019 affirmed our view that SaaS clients adopt our product innovation much faster than the perpetual license model and get better service levels.

We believe SaaS clients enjoy up to 50% faster time to value from their eGain investment.

eGain automates customer engagement with an innovative Software as a service (SaaS) platform, powered by deep digital, Artificial intelligence (AI), and knowledge capabilities.

We are headquartered in the United States.

We also operate in United Kingdom and India.

We sell mostly to large enterprises across financial services, telecommunications, retail, government, healthcare, and utilities.

With our mantra of AX + BX + CX = DX™ , we guide clients to effortless Digital experience (DX) by holistically optimizing Agent experience (AX), Business experience (BX) and Customer experience (CX).

One hundred fifty leading brands use eGain cloud software to improve customer satisfaction, empower agents, reduce service cost and boost sales.

Industry Background

Traditional Customer Relationship Management (CRM) tools do not serve the needs of the digital world because they were designed primarily as systems of record to capture, view, and report on customer data in a phone-centric environment.

They do not offer rich applications to engage customers across digital-first touch points, nor escalate with full context across self-service to agent assistance.

They view knowledge management as document management, a monolithic content model that struggles in the personalized, media-rich, and content-heavy digital world.

In the CRM world, agents are presumed to have a high capacity to retain and update relevant knowhow across complex product portfolios in their head (with extensive training and retraining).

Finally, in-band process guidance for self-service and agent assistance are foreign to the traditional CRM world.

The reality of contact centers today, we believe, is that agents ignore 90% of the data on their screens—most of it hidden in multiple tabs—as they merely refer to post-it notes or internal chat sessions to find the right answer for a customer.

Customer relationship management (CRM) tools are not designed to serve as systems of engagement because they are primarily systems of record.

They do not offer rich applications to engage customers across digital touch points, nor do they escalate conversations with context across self-service to agent assistance.

Furthermore, CRM systems mostly view knowledge management as traditional document management - a big content model that does not work the personalized, media-rich, and content-heavy digital world.

Frontline agents, in the CRM worldview, are supposed to have super-human capacity to retain and routinely refresh all relevant knowhow across complex, expanding product portfolios and compliance-heavy processes.

Finally, the concept of in-band guidance for customer self-service and agent assistance is foreign to CRM systems.

The reality of CRM desktops in contact centers today, we believe, is that agents ignore 90% of the data piled up their application screens—most of which is hidden behind multiple tabs.

According to Gartner, 84% of agents surveyed are not satisfied with their desktop tools.

It is time to reimagine the Agent Experience.

Digital Economy Demands Modern Software

In a world selling commoditized products to information-rich customers short on time, smart customer engagement reduces cognitive effort, and can build sticky brands and boost profit.

As a result, businesses are actively seeking digital-first, modern software platforms to layer on top of their traditional systems of record like CRM.

These platforms must be agile, comprehensive, scalable, and cost-effective to help automate customer self-service, augment agent productivity, and orchestrate contact center operation in an omnichannel environment.

AI-Powered Customer Engagement Automation

Energized in the digital world by big-data, cloud-computing and open-source technologies, AI and machine learning can deliver transformational value when effectively combined with domain expertise and complementary technologies like knowledge, analytics, and digital.

In customer engagement, the ultimate goal is automation delivered on a platform that combines these powerful capabilities in a purpose-built way.

The pressing challenge for businesses is to separate the wheat from the chaff.

In the face of intense marketing from hundreds of providers—from IBM on the high end to countless startups—businesses now demand proof at scale, no-risk trials in a production setting, and outcome-based pricing tied to business-relevant metrics.

In a world selling commoditized products to information-rich customers short on time, smart engagement must automate the routine and augment the interesting across agent, business and customer.

Therefore, businesses are increasingly seeking digital-first, modern software platforms to layer on top of their traditional systems like CRM, contact centers, and content management.

Customer engagement platforms must be designed to be systems of engagement, enabling rapid innovation, delivering quick value and integrating with systems of record across the enterprise.

Agile, comprehensive, scalable, and cost-effective, they must demonstrably automate customer self-service, empower agents and easily orchestrate contact center operation in an omnichannel environment.

AI-Knowledge Powered Customer Engagement Automation

Energized by big-data, cloud-computing and open-source technologies in a digital world, AI-Knowledge can deliver transformational value, within a digital-first, omnichannel customer interaction framework.

Smart, connected experiences can be automated to successfully resolve majority of customer interactions in most B2C businesses.

The pressing challenge for solution buyers, however, is to separate the wheat from the chaff as they look for trusted, innovative and aligned partners.

They seek sustained product leadership, at-scale proof points and no-risk trials.

Contact Centers are the Battleground

Contact centers offer a significant opportunity to automate human effort in B2C businesses.

Globally, there are more than 10 million contact center agents.

Even as digital technologies help improve self-service, time-starved customers faced with sophisticated, connected products generate stubbornly high levels of request for human assistance.

The possibility of reducing significant headcount expense through automation is compelling for businesses.

Contact centers offer a significant opportunity to automate customer engagement.

Globally, there are close to 15 million contact center agents.

Time-starved customers consuming complex products and grappling with marketing offers generate stubbornly high levels of customer contact.

Furthermore, contact centers worldwide are undergoing a technology refresh cycle from on-premise voice-centric models to cloud-based omnichannel platforms.

This transition affords the opportunity to reimagine the traditional centralized, phone-based contact handling operations and move toward much greater automation of customer engagement, fueled by AI and digital technologies.

This transition affords businesses the opportunity to reimagine and design new customer contact strategies to drive digital-first automation, fueled by AI-Knowledge.

Customer Engagement Automation is a Large, Growing Market

Businesses and organizations of all sizes are investing heavily in digital transformation, with customer engagement as the largest area of investment in digital transformation.

Ease of innovation in cloud and a growing API economy present ever more exciting capability dots for enterprise to connect and operate.

Businesses are investing heavily in digital transformation, with customer engagement as a top priority.

Ease of innovation in cloud and a growing Application programming interface (API) economy present exciting capability to connect, solve, and optimize.

This is both an opportunity and a challenge.

As predicted by industry analysts, the number of customer interactions involving emerging technology such as machine-learning applications, chatbots, or mobile messaging is increasing every day.

To harness these disruptive and novel capabilities, businesses are looking toward innovative platform providers with proof at scale to deliver a solution.

To effectively harness such novel capabilities, businesses are looking toward innovative platform providers with proof at scale to guide them on their automation journey.

The eGain Approach and Benefits

What Customers Want

Technology acceleration notwithstanding, human needs for customer engagement and service change very slowly.

What customers want is help in three categories:

Technology acceleration notwithstanding, human needs for customer engagement and service change slowly.

We believe what customers want is help in three categories:

information, transaction, and situational.

Any given customer contact can move across these needs as the conversation develops.

Therefore, it is critical that an effective solution address these three types of interactions seamlessly and with context —accounting for machine-human hand-offs, channel switching, multimodal interaction, and conversational pause-and-resume.

In each of these interactions, customers increasingly want to be guided, even anticipated, because time efficiency is their #1 goal next to getting a correct answer, which is their biggest hurdle to a good experience, according to analyst surveys and our own research.

The eGain Solution

eGain offers a comprehensive, unified cloud software solution to automate, augment and orchestrate customer engagement in a digital-first omnichannel world.

Our feature rich portfolio of applications empowers businesses to holistically, flexibly, and continuously optimize the experience for agents, business and customers.

Our solution experts and partners guide clients on a customer engagement transformation journey using an agile, strategy-aligned set of sprints to activate waves of cooperating capabilities in phases.

Each sprint is measured with our analytics to surface business value, justifying the next phase of investment.

Digital-first, Omnichannel Desktop

A given customer contact can morph across these categories as the conversation develops.

Therefore, it is critical that an effective solution optimization customer contact across these three categories seamlessly and with context —accounting for machine-human hand-offs, channel switching, multimodal interaction, and conversational pause-and-resume.

During these interactions, we believe customers increasingly want to be guided, even anticipated.

Siloed solutions like transactional, simplistic chatbots without contextual escalation and supporting knowledge tend to disappoint consumers even more than non-existent self-service options.

The eGain Solution is Comprehensive

eGain offers a comprehensive, unified cloud software solution to automate, augment and orchestrate customer engagement in a digital world.

Our feature-rich portfolio of applications empowers businesses to holistically connect, flexibly solve, and continuously optimize the experience for agents, businesses and customers.

Our solution experts and partners guide clients by aligning with their strategic priorities and demonstrating quick value across a series of agile sprints.

Digital-First, Omnichannel Desktop Connect

First, our solution offers comprehensive, scalable capabilities for digital-first, omnichannel interaction within a modern, purpose-built desktop.

Rich, out of the box applications help agents efficiently interact with customers using messaging, SMS, chat, email, social media, phone, video, fax, and letter to enable connected customer journeys, offering service across all touch points.

Our enterprise-grade digital engagement capabilities are proven at scale with clients such as a leading telecommunications company that annually serves over 12 million digital customer interactions with over five thousand agents on a 24x7 basis.

AI and Knowledge Applications

Rich applications, optimized for productivity, proactively guide agents to efficiently interact with customers using messaging, Short message service (SMS), chat, email, social media, phone, video, fax, and letter.

Agents do not have to remember complex product details and detailed process steps.

Process compliance is built into the solution.

AI and Knowledge Solve

Next, our solution offers powerful AI and knowledge applications for virtual assistance for customers and agents.

These applications enable businesses to centralize knowledge, policies, procedures, and best-practices, while delivering guided, personalized solutions to customers and agents.

These applications are designed to ensure that all agents in an organization can effectively handle all types of contacts, regardless of product or procedure.

Consistent and correct responses across all touchpoints (operated by the previous layer of omnichannel applications) significantly improve customer satisfaction even as first contact resolution rates surge and an agent’s time to competency drops.

Our AI and knowledge applications deliver compelling value through large-scale self-service automation.

For example, one of our healthcare clients serves over 25 million requests every year with web self-service.

Another client improved customer NPS scores by 20 points and boosted first contact resolution by 23% using our AI and knowledge capabilities in a ten thousand agent customer service operation.

Analytics and Machine Learning Applications

Our powerful analytics capability enables clients to measure, manage and orchestrate their omnichannel service operations.

In addition, our recently announced machine learning service helps clients generate product improvement and customer preference insights from all of their customer conversation data and also identify opportunities to automate more processes.

Open, Secure APIs and Pre-built, Certified Third-party Connectors

Our open, secure platform APIs are available to clients and partners to extend and enhance our solutions and to integrate with enterprise assets and to enable a single view of the customer.

Our deep, certified connectors into platforms such as those of Avaya, Amazon.com, Cisco and Salesforce.com enable our clients to leverage their existing systems of record and communication, while building their system of engagement on the eGain platform.

Further, these applications ensure that all agents effectively resolve all contact types, regardless of product or procedure.

Correct, compliant, and consistent responses across touchpoints - automated and assisted - boost customer satisfaction.

First contact resolution surges and agent time to competency drops.

Analytics and Machine Learning Optimize

Our analytics solution enables clients to measure, manage and orchestrate their omnichannel service operations.

In addition, our machine learning service led by our digital optimization experts helps clients generate product improvement and customer preference insights from customer conversations and journey events, while spotting opportunities to improve experience and automate processes.

Open, Secure APIs and Third-Party Connectors Deliver Quick Value

Our open, secure platform APIs enable clients and partners to extend and enhance our solutions and to integrate with enterprise assets to enable a single view of the customer.

Our certified integration with platforms such as those from Avaya, Amazon, Cisco, Salesforce, and Microsoft enable clients to leverage existing systems of record and communication.

Compelling Benefits

We believe our solution delivers transformational value as clients develop their modern customer engagement capabilities on our platform.

Specifically, our solutions allow clients to:

Enhance customer experience with digital-first, omnichannel service.

Reduce operating costs through self-service automation, improved first contact resolution, and compressed agent time-to-competence.

Ensure compliance with regulations, policies, procedures, and best practices even as clients expand their product portfolio and serviced customer segments.

We believe our solution delivers transformational value.

Specifically, we help businesses:

o Enhance customer experience with digital-first, omnichannel service.

o Reduce operating costs through self-service automation, improved first contact resolution, and compressed agent time-to-competence.

o Ensure compliance with regulations, policies, procedures, and best practices even as clients expand their product portfolio and serviced customer segments.

This benefit is particularly sought after in regulated sectors like financial services and healthcare, as well as government.

Gain rich, primary insights to enhance products and design new offerings.

Analyzing and learning from customer conversations provides a unique tool to businesses looking for hyper-targeting their customers with offerings that defy commoditization by delivering better consumption and service experience.

o Deliver rich, primary insights to enhance products and design new offerings.

Analyzing and learning from customer conversations provides a unique tool to quickly respond to customer dissatisfaction or agent challenges, while generating ideas for product innovation and process automation.

Competitive Strengths

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Two of the largest federal tax services, one in North America and the other in Europe, use eGain solutions served from the eGain Cloud.

Furthermore, we offer an “Always On”

capability for businesses who cannot afford to be down at any time, day or night, for “scheduled maintenance downtime.”

Finally, we offer credits in the event of non-adherence to contracted service levels.

Transformative Value Delivered at Scale Across Large, Diversified Customer Base

Our solution delivers transformative value at scale today across a large, diversified customer base.

Furthermore, we offer an “Always On” capability for businesses who cannot afford to be down at any time, day or night, for scheduled maintenance downtime.

Finally, we offer service credits in the event of non-adherence to contracted service levels.

Transformative Value at Scale Across Diversified Customer Base

Our solution delivers transformative value at scale today across a diversified customer base.

We believe that our understanding of the customer need and our ability to fulfil it at scale and with enterprise-grade sophistication is unmatched.

From sixty thousand agents at a healthcare client using our solution on a 24x7 basis to a P&C insurer with fifteen thousand contact center advisors and thirty-thousand field agents, we are the preferred choice for the large brands looking to automate customer engagement.

Innovation at the Core Drives an Easy Consumption Model

For over twenty years we have anticipated technology and market trends and sought to consistently stay ahead of them.

We anticipated the need for AI in customer service in 2000, and we developed an omnichannel customer engagement hub over a decade ago.

With a relentless focus on the customer engagement automation market, we continue to add capabilities designed to enhance our client’s investment in eGain.

Recently, we added new customer messaging capabilities via Apple Business Chat, Facebook Messenger, and SMS.

Also, we launched our new VA 3.0, a third-generation virtual assistant powered by AI, machine learning, and knowledge applications that is seamlessly connected with the omnichannel assistance capabilities of the eGain platform.

This ability to connect dots quickly across new and existing technology capabilities, within the eGain platform and outside, distinguishes us when presenting to clients looking for quick value on a platform that can handle their future needs.

Not only do we seek to innovate more quickly than others, we stand behind our claim with a unique Innovation in 30 Days ™

offer—a 30-day guided production pilot in the eGain Cloud with no strings attached.

In May 2019, we held a Chatbot Factory at our eGain DX19 event in London.

Chatbot Factory participants went home with a starter chatbot (virtual assistant) at the end of a two-hour workshop.

Over the following weeks, we guided them by developing the starter bot into a connected state-of-the-art virtual assistant.

From over a hundred thousand users at a healthcare client using our solution on a 24x7 basis to a P&C insurer with fifteen thousand contact center advisors and thirty-thousand field agents, we are the preferred choice for large brands looking to automate customer engagement.

Market-leading Innovation with a Risk-free Trail Model

We are consistently seen as product leaders in digital engagement and knowledge management by leading analysts.

For over twenty years, we have anticipated technology and market trends.

We anticipated the need for AI in customer service early and developed an omnichannel customer engagement hub years ahead of competition.

With a relentless focus on the customer engagement automation, we continue to add capabilities to enhance our clients’ investment in eGain.

For example, to enable our clients to serve their customers across all channels, our messaging hub out of the box connects with Apple Business Chat, Facebook Messenger, Google Business Messaging, SMS and WhatsApp.

Our third-generation

virtual assistant - powered by AI, machine learning, and knowledge applications - seamlessly layers across our omnichannel platform.

Our knowledge and AI solutions lead the market.

Not only do we innovate quicker than others, we stand behind our claim with a unique Innovation in 30 Days ™ offer—a 30-day guided production pilot in the eGain Cloud – at no cost and with no strings attached.

Leveraged Go-to-market Strategy with a Growing Partner Ecosystem

We take our solutions to market through a partner-leveraged enterprise sales model.

Our enterprise sales team works closely with our channel managers to help partners qualify and sell.

Our key channel partner today is Cisco.

Through its partner ecosystem and direct sales network, we resell cloud-based, eGain-branded solutions in our target geographies of North America and Europe.

Given the reach of Cisco and its partners in the enterprise, we see growing opportunities in this ecosystem.

We enhanced our product integration and increased our go-to-market investment in partnerships with Avaya via its AI Connect program and with Amazon Connect, a disruptive cloud-based contact center proposition.

We serve a worldwide customer base across a wide variety of industry sectors, including healthcare, retail, telecommunications, financial services, insurance, outsourced services, technology, utilities, government, manufacturing and consumer electronics.

Our product is sold primarily to large B2C enterprises, which we define as enterprises with over $500 million in annual revenue.

For fiscal year 2019, domestic and international revenue accounted for 56% and 44% of total revenue, respectively, compared to 54% and 46%, for fiscal year 2018.

Our largest customer accounted for 17% of total revenue in fiscal year 2019 and 16% of total revenue in fiscal year 2018.

We compete with other application software vendors including Genesys Telecommunications, LivePerson, Inc., and Moxie Software, Inc.

In addition, we face actual or potential competition from larger software companies such as Microsoft Corporation, Oracle Corporation, Salesforce.com, Inc., and Verint KANA that may attempt to sell customer engagement software to their installed base.

We also compete with internally developed applications within large enterprises.

Finally, we face, or expect to face, competition from software vendors who may develop toolsets and products that allow customers to build new applications that run on the customers’

infrastructure or as hosted services.

We started our Original equipment manufacturing (OEM) partnership journey with Cisco several years ago.

Through Cisco’s partner ecosystem and direct sales network, we also resell cloud-based, eGain-branded solutions.

In fiscal year 2020, we announced our cloud-based OEM partnership with Avaya for our digital connect portfolio.

We are now building an active pipeline with Avaya field sales and their partners.

Finally, we partner with Amazon Connect, a disruptive cloud-based contact center solution.

Our integrated proposition delivers the best of omnichannel capabilities powered by AI, Knowledge and Analytics.

We mostly sell to large enterprises, which we define as businesses with over a billion dollars in annual revenue or government organizations.

Approximately 90% of our annual recurring cloud revenue for fiscal year 2020 came from such large enterprises.

We focus on the following verticals:

financial services, telco, retail, government, health care and utilities.

For fiscal year 2020, domestic and international revenue accounted for 62% and 38% of total revenue.

One of our largest customers, who is also a partner, accounted for 18% of total revenue in fiscal year 2020.

We compete with application software providers, including Genesys Telecommunications, LivePerson, Moxie Software, Verint, Nuance, and Oracle.

In addition, we engage in partnerships with some of our competitors, including Salesforce, Microsoft, and ServiceNow.

The market that we compete in is highly competitive and some of our competitors may have longer operating histories, greater economies of scale, greater financial resources, greater engineering and technical resources, greater sales and marketing resources, stronger strategic partnerships and distribution channels, larger user bases, products and services with different functions and feature sets and greater brand recognition than we have.

We believe the principal competitive factors in our market include the following:

proven track record of customer success;

speed and ease of implementation;

product functionality;

financial stability and viability of the vendor;

product adoption;

ease of use and rates of user adoption;

low total cost of ownership and demonstrable cost-effective benefits for customers;

performance, security, scalability, flexibility and reliability of the service;

whether the software is delivered via the cloud or on-premises;

ease of integration with existing applications;

quality of customer support;

availability and quality of implementation, consulting and training services;

vendor reputation and brand awareness.

o proven track record of customer success;

o speed and ease of implementation;

o product functionality;

o financial stability and viability of the vendor;

o product adoption;

o ease of use and rates of user adoption;

o low total cost of ownership and demonstrable cost-effective benefits for customers;

o performance, security, scalability, flexibility and reliability of the service;

o whether the software is delivered via the cloud or on-premises;

o ease of integration with existing applications;

o quality of customer support;

o availability and quality of implementation, consulting and training services;

o vendor reputation and brand awareness.

Growth Strategy

Given the progress in the migration cycle with our remaining customers, intend to scale our business by executing the following programs.

Migrate Legacy On-premise Customers to eGain Cloud

Since we transitioned our business to SaaS, we have continued to actively migrate legacy on-premise customers to the eGain Cloud.

We offer an attractive proposition to our on-premise customers to move to the eGain Cloud where we subsidize the services cost in migrating them to the eGain Cloud in exchange for their multi-year commitment to the eGain Cloud.

Given where we are in the migration cycle with our remaining customers, we expect to substantially migrate all our significant on-premise clients to the eGain Cloud by the end of calendar year 2020.

Land and Expand in the Enterprise

With the progress we have made in customer success over recent periods, we see a replicable pattern emerging:

land enterprise logos with a potentially limited footprint in one business unit, demonstrate business value, and then actively

expand in the enterprise –

activating more of our capabilities and rolling out to multiple business units.

Further, we see the opportunity to increase stickiness by integrating via our enhanced APIs with enterprise assets like enterprise collaboration platforms, CRM systems, transaction and billing, and content sources.

We are investing in multiple programs to accelerate growth.

Invest in Direct Sales and Marketing

We are enhancing our digital marketing to boost brand awareness, based on client success, product leadership and no-risk trial offers.

To complement our marketing investment, we are significantly expanding our field sales team to increase high-touch presence in target accounts.

Develop New Partner Relationships

As a business today, we have an abundance of product solutions but limited distribution.

We are well positioned to partner with existing technology platform providers (with large customer bases) to enhance their proposition with AI-powered digital customer engagement solutions.

We intend to continue to develop and deepen such partnerships to increase market reach.

We are developing new partnerships with complementary platform providers (with large customer bases) to enhance their proposition with our AI Knowledge powered customer engagement capabilities.

We have hired a new head of Business Development to lead a team to develop and operationalize such new partnerships.

Land and Expand in the Enterprise

With the sustained progress we have made in customer success, we see a replicable pattern emerging:

land enterprise logos with a limited footprint in one business unit, demonstrate business value, and then expand in the enterprise.

We are increasing the value of investment in eGain for our clients by deeply integrating our capabilities via our enhanced APIs with enterprise assets like enterprise collaboration platforms, CRM systems, transaction and billing, and content sources.

Migrate Our Remaining Legacy Customers to eGain Cloud

We offer an attractive proposition to our remaining on-premise customers to move to the eGain Cloud where we subsidize the migration service cost in exchange for their multi-year commitment to the eGain Cloud.

We expect to substantially migrate most remaining on-premise clients to the eGain Cloud by the end of fiscal year 2021.

Maintain Platform Innovation Leadership

Innovation is in our DNA and we plan to continue to build on our strength.

We plan to invest in easy-to-consume innovation with more compelling user experiences and more extensive platform APIs, so that in working with partners we can deliver differentiated and sustained value to clients.

Innovation is in our DNA.

We are developing vertical solutions on our platform to better acquire and serve customers.

We continue to enhance our core capabilities to improve usability and personalization.

Selectively Pursue Acquisitions

Historically, we have from time to time pursued inorganic strategies to strengthen our product portfolio.

Our most recent acquisition was in 2014 when we acquired Exony Limited, a provider of advanced contact center analytics software.

Moving forward, we will continue to look for possible combinations that we believe will deliver compelling value to our clients.

From time to time, we pursue inorganic strategies to strengthen our product portfolio.

In 2014 we acquired Exony Limited, a provider of advanced contact center analytics software.

Moving forward, we will look for strategic acquisitions that we believe will deliver compelling value faster than organic options.

Sales and Marketing

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Our sales strategy is to pursue targeted accounts, mostly B2C enterprises, through a combination of our direct sales force and partners.

We target our sales efforts at enterprise companies.

These enterprises have thousands of customer service agents in their contact centers and, in the aggregate, communicate with billions of customers each year.

We attempt to utilize thought leadership and other marketing events to demonstrate our leadership position in the cloud-based customer engagement software market and highlight our successes with existing customers.

Our North American direct sales organization is based at our corporate headquarters in Sunnyvale, California, with field sales presences throughout the United States.

Internationally, we have offices in India and the United Kingdom.

The direct sales force is organized into teams that include field sales representatives and sales consultants.

These enterprises typically have thousands of customer service agents in their contact centers and, in the aggregate, communicate with billions of customers each year.

We utilize thought leadership and other marketing events to demonstrate our leadership position in the customer engagement software market and highlight our customer successes.

Our direct sales force is organized into teams that include field sales representatives and sales consultants.

Our direct sales force is complemented by lead generation representatives and sales development representatives.

We also complement our direct sales force with reseller and sales alliances.

We believe we are able to leverage additional sales, marketing and deployment capabilities through these alliances.

We also complement our direct effort with sales alliances.

Marketing and Partner Strategy

Our marketing strategy is to build our brand around innovative and robust products trusted by leading enterprises.

Our marketing organization focuses on public relations, analyst relations, marketing communications and demand generation.

We employ a wide range of marketing avenues to deliver our message, including print and Internet advertising, targeted electronic and postal mailing, email newsletters, and a variety of trade shows, seminars, webinars, and interest groups.

Our marketing group also produces sales tools, including product collateral, customer case studies, demonstrations, presentations, and competitive analyses.

We accomplish this via public relations, analyst relations, marketing communications and demand generation.

We employ a wide range of marketing avenues to deliver our message, including print and digital, targeted electronic and postal mailing, email newsletters, and a variety of trade shows, seminars, webinars, and interest groups.

Our marketing group produces sales tools, including product collateral, customer case studies, demonstrations, and presentations.

In addition, the group performs market analyses and customer reviews to identify and develop key partnership opportunities and product capabilities.

We believe that our partners help extend the breadth and depth of our product offerings, drive market penetration, and augment our professional service capabilities.

We believe these relationships are important to delivering successful, integrated products and services to our customers, and scaling our business.

Our partner portal, EcoNet™, enables us to

provide comprehensive sales, support and services information for channel partners, while enabling them to collaborate with one another through an online forum.

Partner enablement is also a key focus area for our consulting and training teams.

As of June 30, 2019, we had 91 employees engaged in worldwide sales and marketing activities.

We believe these relationships are important to delivering successful, integrated products and services to our customers.

Our partner portal, eGain Econet™, provides comprehensive sales, support and services information for channel partners.

Subscription Services

Our subscription services provide customers with access to our software within a cloud-based information technology (IT) environment that we manage and offer on a subscription basis.

These subscription services allow our customers to benefit from our latest cloud innovations and to reduce infrastructure, installation and ongoing administration requirements.

We also offer cloud-based services to existing customers who previously purchased licenses to our software to access that software within a cloud-based IT environment that we manage.

This reduces infrastructure and ongoing administration requirements as an alternative to their on- premises deployment of our software.

We generally offer these services through 36-month contracts with pricing based on the number of agents and/or customer service sessions.

Consulting and Education

Our worldwide professional services organization provides consulting and education services designed to facilitate customer success and build customer loyalty.

Consulting Services .

Our consulting services group offers rapid implementation services, custom solution development, and systems integration services.

Consultants work with customers to understand their specific requirements, analyze their business needs, and implement integrated solutions.

We provide these services independently or in partnership with systems integrators who have developed consulting expertise on our platform.

Education Services.

Our education services group provides a comprehensive set of basic and customized training programs to our customers and partners in addition to online tutorial modules for ongoing refresher courses.

Training programs are offered either in-person at the customer site, or at one of our worldwide training centers.

As of June 30, 2019, we had 58 professionals providing worldwide services for systems installation, solutions development, application management, and education.

Our subscription services provide customers with access to our software on a cloud-based platform that we manage and offer on a subscription basis.

These subscription services allow our customers to easily consume our product innovation without dealing with infrastructure, installation and ongoing administration.

We generally offer these services through a 36-month contract, with pricing based on the number of agents or self-service sessions.

Professional Services

Our worldwide professional services organization provides consulting, implementation and training services to deliver business value, drive customer success and build customer loyalty.

o Consulting and Implementation Services .

Our offering includes rapid implementation services, platform-based solution extension, and systems integration services.

Our consultants work with customers to understand their requirements, analyze their business needs, and implement effective solutions.

We provide these services independently or in partnership with systems integrators who have developed expertise on our platform.

o Training Services.

We provide comprehensive training options to customers and partners.

Training programs are offered either online (remote training) or in-person at the customer site.

We also offer complementary e-learning through our eGain University education portal to our customers and partners.

Customer Support

We offer a comprehensive collection of support services designed to rapidly respond to inquiries.

Our technical support services are available to customers worldwide under maintenance and support agreements.

The customer success team uses eGain’s own software suite to provide world-class service to all our customers through support centers located in California, the United Kingdom, and India.

As of June 30, 2019, there were 63 employees engaged in worldwide customer support services and 48 employees engaged in worldwide cloud services and maintenance support.

We offer 24 x 7 customer support via online and phone channels worldwide under support agreements.

Our customer support centers are in California, United Kingdom, and India.

Research and Development

The market for our products changes rapidly and is characterized by evolving industry standards, swift changes in customer requirements, and frequent new product introductions and enhancements.

We believe that strong product development capabilities are essential to our strategy of maintaining technology leadership.

This includes enhancing current technology, providing excellent quality, performance, and functionality, as well as developing additional applications, and maintaining the competitiveness of our product and service offerings.

We continuously analyze market and customer requirements and evaluate external technology that we believe will enhance our competitiveness, increase our lifetime customer value or expand our target market.

As a result of this process, we acquired Exony Limited, a leader in enterprise contact center analytics software, in August 2014.

As of June 30, 2019, we had 160 employees engaged in worldwide product development activities.

We spent approximately $14.4 million and $14.7 million on research and development in fiscal years 2019 and 2018, respectively.

The market for our products changes rapidly and is characterized by evolving industry standards, swift changes in customer requirements, and frequent product introductions.

Our product roadmap effectively combines build, partner and buy options.

[The last company we acquired was Exony Limited, a UK-based leader in enterprise contact center analytics software, in August 2014.]

Intellectual Property

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Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.

Information About Our Executive Officers

The following table sets forth information regarding eGain’s executive officers as of September 11, 2020:

Chief Executive Officer and Chairman

Chief Financial Officer

Promod Narang

Senior Vice President of Products and Engineering

Todd Woodstra

Senior Vice President of Global Sales

Ashutosh Roy co-founded eGain and has served as Chief Executive Officer and a Director of eGain since September 1997 and as President since October 1, 2003.

From May 1995 through April 1997, Mr.

Roy served as Chairman of WhoWhere?

Inc., an Internet-services company co-founded by Mr.

From June 1994 to April 1995, Mr.

Roy worked at Parsec Technologies, a call center company based in New Delhi, India, which he co-founded.

From August 1988 to August 1992, Mr.

Roy worked as a software engineer at Digital Equipment Corporation.

Roy holds a B.S.

in Computer Science from the Indian Institute of Technology, New Delhi, a Master’s degree in Computer Science from Johns Hopkins University and a M.B.A.

from Stanford University.

Roy’s qualifications to serve on our Board of Directors include his industry experience and deep knowledge of eGain from his position as a founder of our Company and as our Chief Executive Officer for over 20 years.

Eric Smit has served as Chief Financial Officer since August 2002.

Prior to that, Mr.

Smit served in a variety of roles at eGain, including Vice President, Operations from April 2001 to July 2002, Vice President, Finance and Administration from June 1999 to April 2001, and Director of Finance from June 1998 to June 1999.

From December 1996 to May 1998, Mr.

Smit served as Director of Finance for WhoWhere?

Inc., an Internet services company.

From April 1993 to November 1996, Mr.

Smit served as Vice President of Operations and Chief Financial Officer of Velocity Incorporated, a software game developer and publishing company.

Smit holds a Bachelor of Commerce in Accounting from Rhodes University, South Africa.

Promod Narang has served as Senior Vice President of Products and Engineering since March 2000.

Narang joined eGain in October 1998, and served as Director of Engineering prior to assuming his current position.

Prior to joining eGain, Mr.

Narang served as President of VMpro, a system software consulting company, from September 1987 to October 1998.

Narang holds a Bachelor of Science in Computer Science from Wayne State University.

Todd Woodstra has served as Senior Vice President of Global Sales since August 2017.

Prior to joining eGain, Mr.

Woodstra was the Senior Vice President of Enterprise/Channels at Sparks Compass, a real time data analytics platform company, and the Senior Vice President of Enterprise Sales for Interactions LLC from January 2015 to February 2017, where he led enterprise customer sales focused on virtual assistant solutions.

From November 2009 to July 2014, Mr.

Woodstra was Vice President of Global Channel and Partner Alliances for Nuance Communications where he managed and executed business in channels and commercial enterprise, self-service, mobile, collaboration, unified communications, natural language speech recognition, voice biometrics, gesture technologies, inbound/outbound notification and voice-to-text transcription.

Woodstra holds a Bachelor of Arts in Business Administration, Management Information Systems from California State University, San Bernardino

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business