A VIEW FROM THE CORNER OFFICE

Year in Review

By Ari Sonesh, CEO -  2005 was an incredible year of profitability, organization building, growth in revenue, and growth in market share. Our revenue from 2005 operations grew about 70% over 2004, with most of the growth from software license sales.

2005 was especially important as CosmoCom maintained its momentum in increasing market share. We have continued to demonstrate our leadership in the hosted space by adding first tier telco Telefonica Spain and several smaller but aggressive CCOD providers. We received a very large order from a mobile operator in Mexico. We signed up one of the largest outsourcers in Germany, and implemented a call center for one of the largest airlines in the world.  We will announce the names behind these wins as soon as possible. In addition, many of our telco customers chose 2005 to for the commercial debuts of their offerings based on CosmoCom's innovative technology. NTT Communications in Japan, and VSNL in India have officially launched their CCOD services. 2005 was also a year of significant increase in business for many of our existing customers/channels such as France Telecom, BT, Telefonica Germany, DT, PLDT, CHT, KT and others.

2005 was a year of great progress in attracting new partners, such as IBM, Telefonica Soluciones, T-Systems, Datacraft, Tatung, and Intelleca. Significant progress was also achieved with our technology partners, as evidenced by a new joint project with Voxpilot, the introduction of UniFrame based on Microsoft's Customer Care Framework, and the launch of our integration with Microsoft CRM 3.0. Additionally, we integrated and implemented an ASR application utilizing Nuance, and CosmoCom also sponsored Broadsoft and RightNow user groups.

If we look at the profile of our customers, we see that the market is moving in several directions. CCOD is taking off, outsourcers are finding value in VoIP, and last but not least, the enterprise is moving to virtual call centers enabled by VoIP. Nearly all of our premises installations are virtual, geographically distributed contact centers. Furthermore, CosmoCom's offering is very successful in the telecom's call centers, enabling telcos to win twice…first by utilizing the CosmoCall platform to offer call center technology as a service from their networks, and second by implementing the technology for their own customer service needs.

Looking at the market needs from a functionality point of view, there is no doubt that VoIP as a virtualization enabler is Number One. Immediately following is the need for true multi-tenancy which enables service providers to offer the technology as not only a service, but also enables the enterprise to implement many applications on one platform. Other highly attractive features include ease of integration, self administration, ability to easily reprogram call flows, and broadly inclusive functionality such as IVR, CTI, and recording.

In 2005 video (finally) entered the call center space, creating lots of new interest. While CosmoCom from its inception offered video call centers, we have this year added IVVR (Interactive Video and Voice Response), which not only supports all video applications in general, but is interesting in particular to the mobile 3G operators who are very aggressively introducing video calling applications. In fact, a year-end surprise for CosmoCom was the order we received for a Video Call Center from a Tier 1 US fixed line carrier.  We'll disclose the name as soon as we can.

2005 was also a year of building our organization. Ronald Rubens joined CosmoCom in early 2005 to manage the EMEA (Europe, Middle East, and Africa) region. By end of the year, Ronald's contribution was so evident that management elected him the MVVP (Most Valuable Vice President). 2005 also marked the first full year for Mark Lepko, our VP Americas, who, along with his team, overachieved and sold significantly more that his target. Congratulations and thanks to Mark and Ronald! In 2005, CosmoCom opened an office in The Netherlands, now our EMEA headquarters. Several regional directors joined CosmoCom this year. Mike Goode came on board to manage the UK, Wolfhart Kirschke joined us to manage Germany, Tetsuo Hotchi joined to manage Japan, and in the final days of the year, Kiran Maini joined to manage India.

We have also grown our technical capabilities. Eyal Manor was promoted to VP Software Development, and Natan Stein is managing our International Technical Operations. Under the supervision of CTO Steve Dellutri, we have begun to build up our Product Engineering organization, and Ilya Malinovsky joined us as Director of Product Management. In the area of G&A I want to welcome Ting Shi, who joined us as Assistant Controller. Of course we didn't just increase our management capacity.  Overall employee growth was about 5%.

To summarize, CosmoCom is entering 2006 as a very strong company, ready for any challenge, and expecting aggressive growth. Our goal for 2006 is to surpass the growth we experienced in 2005, while maintaining both our profitability and the strength of our balance sheet.

In closing, I would also like to mention the upcoming "CosmoCommunity" in May 2006 here on Long Island. Everyone is invited to this milestone event, and I hope to see all of you here. Read more about it at http://www.cosmocommunity.com

COSMOCOM STRENGTHENS PRESENCE IN CENTRAL EUROPE

Appoints Wolfhart Krischke Managing Director

In response our success and growth in Europe we recently announced that Wolfhart Krischke will serve as Managing Director for the DACH region. DACH, literally Germany (Deutschland), Austria, and Switzerland (Schweiz), also includes the Czech Republic, Hungary, and other important emerging economies. DACH is home to many of the world's leading corporations and is recognized as one of the most dynamic and economically significant regions in Europe. Mr. Krischke will lead the CosmoCom organization for the region from CosmoCom's offices in Frankfurt, and reports to Ronald Rubens, CosmoCom Regional Vice President for EMEA.

"Our growth in Germany alone in conjunction with major players such as DTAG (Deutsche Telekom AG) and Telefonica Deutschland mandated the addition of a strong leader like Wolfhart Krischke to the EMEA team," explained Rubens. "Krischke brings more than 20 years of telecommunication and contact center experience with a strong track record in sales and sales management, channel management, broad international knowledge, and also project management. This rare combination of skills and experience equips him to be a leader and a major contributor to CosmoCom's growth in his region."

To learn more about the announcement and Wolfhart Krischke, read the full press release at: http://www.cosmocom.com/pressreleases/PressReleases2006/pr01242006.htm

GLOBAL MEETINGS KICK OFF 2006

For a week in early January, CosmoCom employees from around the globe once again gathered for our annual Global Sales Meeting (GSM) and Global Sales Engineering Meeting (GSEM). The events were designed to bring our widely distributed organization together under one roof to exchange ideas and information on our products, the needs of our customers, and the continuous improvement of our technology. As in years past, energetic exchanges focused on customer needs and the growing market for Contact Center On-Demand.

The week began with the GSM at which the salespeople shared presentations on proven successes and key opportunities. Guest speakers from two of CosmoCom's most valued customers made the trip to Long Island to give the group firsthand accounts of their experiences with our technology. Representing Telefonica, Spain, was Mr. Jorge Astray, CRM Business Development Manager. Telefonica's mission statement is "to become the largest and best integrated telecommunications group in the world" in terms of customer orientation, innovation, operating excellence and professional services, and CosmoCom is very proud of the confidence they have placed in the ability of our technology to help them achieve their goals.

Our other guest speaker at the GSM was Mr. Segar Annamalai, CIO of Westwood/Alta Colleges in Denver. With college admissions at record levels, institutions such as Alta Colleges Inc, the parent company of Westwood College, are turning to new technologies to effectively manage the enormous volume of telephone calls, emails and Web-based inquiries they receive. With 18 colleges located across five states and a growing online campus, Alta chose CosmoCom's CosmoCall Universe Version 4.5 to enable it to better manage communications and raise the level of its responsiveness to current and prospective students.

Following on the heels of the GSM, was the GSEM (Global Sales Engineering Meeting) where our international and domestic sales engineers held two days of more technically oriented meetings, discussing customer and prospective applications in detail, and seeing demos of planned new product features that are still in development.

At the close of the sessions, the general consensus was that the GSM/GSEM had been a resounding success. The meetings proved to be a welcome sounding board, while the evening team building events were a great success in fostering camaraderie and a healthy dose of competition…all in all a true jumpstart to a new year!

COSMOCOM UK ON THE MOVE

For CosmoCom UK, a move to larger a facility was in keeping with their growing organization.

After researching various possible locales, the choice was narrowed down to the area of Reading in Berkshire, the heart of the UK "silicon valley". The new building is state-of-the-art, located within Green Park, an easily accessible high tech office park which has the UK's largest wind turbine -- a useful landmark when directing visitors. It shares the neighborhood with other high tech companies such as Cisco, LogicaCMG, Microsoft, and Oracle.

The first week of January was chosen for the actual move. Packing, moving and unpacking took several days. Now CosmoCom Ltd has settled in nicely. The new premises include a fully-equipped customer demo room/board room, sales offices, an engineering lab, and management offices.  Other onsite facilities include conference and training rooms that will accommodate up to 100 people. Complete with a ground floor atrium, a full cafeteria, and an outdoor terrace, the building boasts a delightful parkland setting with lakeside views conducive to a lunchtime stroll.

Reading has direct access from Heathrow Airport by a frequently running Railbus connecting to Green Park, which is close to the M4 motorway, the UK southern road network, and London.

No doubt this strategic move has been well received by the CosmoCom UK team.  We wish you much success in your new home!

COSMOCOM'S CEO HONORED AT AWARDS LUNCHEON

On January 13th, The Long Island Capital Alliance (LICA) held it's Business Person of the Year awards luncheon. LICA has been stimulating business development on Long Island for over twenty years, and, through their organization, has been providing entrepreneurs and investors an opportunity to network in a business-friendly environment. At their annual awards luncheon, the Herman Fialkov award is presented, and this year, CosmoCom's CEO, Ari Sonesh, in recognition of his pioneering leadership of CosmoCom that has made it one of  the region's fastest growing companies, was one of three honored finalists.  Congratulations to winner David Hershberg, CEO of CosmoCom customer Globecomm Systems.

Herman Fialkov is one of the founding members of LICA. A list of his investments reads like a timeline for the technology boom on Long Island. He is also recognized as one of the first investors in Intel Corp. Mr. Fialkov was on hand for the presentation of the awards bearing his name.

DON'T MISS COSMOCOMMUNITY 2006

Register Now to Learn, Network, Share...

The new year is upon us and CosmoCommunity 2006 is shaping up nicely. Earlybird registration is still available for this world-class gathering of everyone who provides, implements or uses CosmoCom technology and related or complementary technologies. Be sure you're part of this unique opportunity to learn, network and share at Long Island's beautiful Hyatt Regency Wind Watch Hotel, set in a stunning, resort-like setting with an 18-hole championship golf course.

Sponsors are lining up, and a growing base of attendees is looking forward to the event that takes place May 17-19, 2006. At CosmoCom HQ, we're finalizing an agenda with exciting speakers and three breakout tracks offering something for every kind of attendee.

For the technically inclined, we've just added several days of complimentary technical training at our Melville training center for registered attendees (subject to availability) in the days before and after CosmoCommunity 2006 at no charge to attendees.

For more information and to register online please visit http://www.cosmocommunity.com 

PARTNERS SPOTLIGHT: VOICEGENIE

Speech Enabled VoIP Contact Center

By Leron Polani, VP Business & Corporate Development - The simple, SIP-based integration of CosmoCom and VoiceGenie solutions delivers the benefits of open standards-based speech applications and an all-IP universal access contact center system to deliver improved customer satisfaction, reduced costs and new revenue opportunities in contact centers.

The VoiceGenie Media Platform supports sophisticated VoiceXML speech-enabled contact center applications that allow the caller to control their interaction using their spoken voice. For telecom service providers this can include applications such as directory assistance, change of address, order status and automated prepaid calling. Enterprise applications include shipment status, account balance and password reset.

In the telecom call center, the VoiceGenie Media Platform delivers speech-enabled call center applications with CosmoCall Universe™. This is a powerful way for telecom providers to differentiate themselves in a highly competitive marketplace by delivering compelling content and services to their customers beyond basic customer care. It also enables service providers to leverage Contact Center On-Demand™ and offer speech-enabled applications to their enterprise customers, improving both their customer care and their bottom lines.

By providing speech recognition technologies easily integrated with CosmoCall Universe™ Enterprise Call Centers, the VoiceGenie Media Platform improves ROI while increasing caller satisfaction. Greater self-service automation rates reduces queue hold times, leading to a better overall service level.

To learn more about VoiceGenie, please visit www.voicegenie.com 

 MEMBERS CHOICE AWARDS VOTING CLOSES SOON

If you haven't voted in the ContactCenterWorld Members Choice awards, there is still time, but not much. Voting has been extended to February 17, but that will be here before you know it. Why not take a moment to cast your vote. Please visit ContactCenterWorld.com at the URLs below to vote for and honestly evaluate CosmoCall Universe in the "Best Multi-Channel Contact Center Solutions" and "Best ACD/Switch" categories. It takes only two minutes. Plus, your vote automatically enters you in a drawing for a $1000 USD cash prize.

• The link for Best Multi-Channel Contact Center Solution is http://www.contactcenterworld.com/mca2006/BestMulti-ChannelContactCenterSolution-cosmocom.htm
• The link for Best ACD/Switch is http://www.contactcenterworld.com/mca2006/BestACD-cosmocom.htm 

We hope we can count on the support of our satisfied customers in both categories. Thank you in advance

 BITS & PIECES: SOME VOIP FACTOIDS

Hosted VoIP Services Market Growing
The market for hosted VoIP services will grow more than 10-fold over the next four years, reaching $1.27 billion by 2009, finds a report by market research firm In-Stat. The report shows the hosted VoIP market's tremendous potential, says David Lemelin, the report's author and an In-Stat senior analyst. Lemelin notes that the hosted VoIP market's primary drivers are cost savings and the enhanced feature sets available from VoIP applications.

From VoIP Magazine
Yankee Group reports VoIP service to be a fast growing segment, predicting its leap to almost $3.3 billion by 2010 from $840 million at the end of 2005. Dividing the market into three categories, Yankee projects:

• Hosted VoIP to increase to $1.2 billion by 2010 from $233 million in 2005
• VoIP over VPN (Virtual Private Network) to increase to $1.25 billion by 2010 from $268 million in 2005
• VoIP real-time QoS bandwidth to grow to $822 million in 2010 from $338 million in 2005

The research firm expects that the overall U.S. retail business VoIP market will increase at a CAGR of more than 31 percent between 2005 and 2010, and overall the percentage of enterprises' off-net phone traffic traveling over IP will grow to 12.5 percent in 2010 from 2 percent in 2005.

For more on this study read the VoIP Magazine article

NEW MEMBERS OF THE COSMOCOM FAMILY

CosmoCom Headquarters

Ronald Schwarz joined CosmoCom in December as the newest member of the Technical Documentation team.
Ronald has worked as a technical writer in telecommunications and data communications applications in Israel. He also has worked for companies developing products for chip manufacturing quality assurance, telecommunications, data communications, IT - including video surveillance, and video distribution.

CosmoCom UK

Martin Granger joined the UK/Eire sales team at the beginning of the year. Formerly with Avaya (AT&T / Lucent Technologies), where he worked for over twelve years, Martin brings with him extensive sales and global account management experience.

CosmoCom Israel

Lev Roiterstein has joined CosmoCom, working in the the Israel office as Sales & Markets Development Manager for the former Soviet Union countries. Lev holds a Masters Degree in Computer Engineering and brings with him a vast experience in the CRM market He has managed successful Amdocs and ClarifyCRM sales to the former Soviet Union countries.

CosmoCom India

Kiran Maini joined CosmoCom in early January as Country Manager for India. He will be based at our new office-in-progress in New Delhi, India and brings with him 10 years of experience and a successful track record in Sales Leadership roles. Most recently Kiran was the Sales Manager of South Asia for Cincom Systems and previously with Siemens. Kiran holds a Bachelor of Engineering Degree and Masters Degree in international business.

TRADESHOW NEWS: COMING ATTRACTIONS

	SPEAKING ENGAGEMENT Internet Telephony Conference and Expo IP Contact Center Summit January 24th -- 27th, 2006 Ft. Lauderdale, Florida, USA http://www.tmcnet.com/voip/conference/voip-06 Panelist: Roman Lewis, AVP Central and Western US, CosmoCom  Topic: "IP Contact Center Shootout"  When: Wednesday, January 25th, 2:00 - 2:45 p.m.
	Middle East Call Centre 2006 Exhibition Jan 29th - 30th, 2006 Crowne Plaza Hotel Dubai, UAE http://www.insights-me.com/mecc2006/ Make sure to visit CosmoCom and Intertec Systems for a demo of CosmoCall Universe.
	SPEAKING ENGAGEMENT Spring 2006 VON Purple Apps March 14th - 17th, 2006 San Jose, CA, USA http://www.von.com Panelist: Steven Kaish, VP, Technical Operations, CosmoCom  Topic: "Purple Apps"  When: Friday, March 17th, 1:20 - 2:45 p.m.
	Customer Management Asia Congress 2006 March 21st - 23rd, 2006 Berjaya Times Square Hotel & Convention Centre Malaysia Booth 45 http://www.customermanagementasia.com/ CosmoCom and partner DataCraft will be demonstrating CosmoCall Universe in booth 45. Plan to visit us.
	CosmoCommunity 2006 May 16th - 18th, 2006 Hyatt Wind Watch Hotel and Resort Hauppauge, NY, USA   CosmoCom's premiere partner and user event. Learn more and register.
	RECORDED WEBINARS
	View recordings of our recent Webinar events including "Hosted Contact Center for Outsourcers", "Contact Center On-Demand" and "Telecom Customer Care"

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	SUPPORTNET UPDATES
	CosmoCom continues to improve CosmoCall Universe. The latest support updates are now available on SupportNet including, new Hot Fix bundles and Microsoft updates have passed QA for CosmoCall Universe deployment. SupportNet is CosmoCom's online support extranet for customers and partners. If you have not yet obtained your secure login information, please contact your CosmoCom representative or send an email to supportnet@cosmocom.com.

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