Fonality is Cash Flow Positive in March, Attains 162% Average Annual Growth

Strongest Financial Position Ever and New Products Attract Larger Customers

CULVER CITY, Calif. - Fonality, Inc. (www.fonality.com), the number one commercial grade vendor of open-source IP phone systems, announces strong financial results and product innovation. Cash flow was positive in March with 162% annual growth, zero debt, and 8 figures of cash reserves in the bank.

“The secret to a great business is to enter a big market with a better product, at a lower price, and to do so profitably. Fortunately, the technology sector makes this formula more possible than in any other industry," says CEO Chris Lyman. "And, we aren't stopping there. In the first quarter of 2009 we invested 16% of revenue back into R&D. Compare that to Avaya at 8% and you see how serious we are about continuing to innovate."

Financial results have come from increased sales of applications, call center software, and larger customers purchasing multi-site systems. Since the economic downturn sales from companies with over 20 employees have increased by 52%. With such growth has come the demand for an even richer feature-set. Today, 51% of Fonality’s customers are using its Call Center Edition product. To build on this success, Fonality recently introduced two new products:

• Unified Agent Edition: for the first time ever customers can connect Salesforce.com to their phone system in a meaningful way. Agents receive desktop alerts of how many dollars a call is worth before they answer the phone, while supervisors use the Salesforce.com interface to find out how long it takes to call leads back, which salespeople are the most productive, and which customers are being neglected.
• HUD Queues: call center supervisors and agents can, in real-time, instantly see the health of their queues including information on agents, holding callers, abandoned vs. completed call stats, and more.

Chris Villar, President of FrontPoint Security Solutions was floored by the results. “We’ve seen the benefit of employing HUD queues within the first 24 hours. We set an expectation that our employees are to answer a call within 30 seconds. In the unlikely event that a call is abandoned, the HUD interface invokes a pop-up that allows for an instant call back. Customers are amazed by our level of service. It’s no wonder that HUD has become a verb in our office,” says Villar.

Internally, Fonality holds itself to the same operational excellence standard touted to its customers, due to using its own applications. With the recently launched customer care team, inbound technical support calls are monitored through HUD Queues. The application has led to call abandonment reduction by 37% and improved customer satisfaction by 17%.

"2009 is the year you have to grow by being smarter; not by doing the same thing for longer,” added Lyman. “At Fonality, we are committed to building products that improve not only our efficiency, but yours as well.”

Pricing and Availability

Fonality products are available through Fonality direct sales, Fonality's Ultimate Channel Program network of resellers, and through Dell at dell.com/voip. Fonality products start at a list price of $995, depending on system configuration, applications, and endpoints. Deploying a Fonality solution averages 60% less cost than a traditional, proprietary PBX system.

About Fonality

Fonality, the number one commercial grade vendor of open-source IP phone systems, uses its Hybrid Hosted™ approach and Anywhere Management™ architecture to create the reliability and quality of a premise-based system with the convenience and cost benefits of a hosted system. Founded in 2004 and headquartered in Culver City, Calif., the company has over 44,000 systems deployed worldwide. Investors include Draper Fisher Jurvetson, Intel Capital, and Azure Capital Partners. More information can be found at www.fonality.com.