Letter from t​he ​CEO​

​ ​

Dear Fellow Shareholders,

2017 was a year of solid execution with significant advances made on our NICE2B strategic plan, which centers around NICE becoming a $2 billion revenue company.  The foundation of this plan is our four strategic pillars of cloud, omni-channel, analytics and artificial intelligence. Our strong execution and financial results reflect the success we are having in being clearly aligned between our long terms goals and these four pillars.

This success has transformed NICE into a visibly different company today than it was several years ago:   we have gone from an addressable market of $3 billion to $7 billion today, which is growing rapidly to become a more than $12 billion dollar market;  we have a fast growing cloud business, representing nearly 30% of our revenues at the end of 2017 with a clear path toward 50%; and, we now have the right offerings and very effective go-to-market assets that enable us to address the entire range of organizations from the smallest businesses to the largest enterprises.

In 2017, we further distanced ourselves from our competition with a substantial set of assets that we have gained through both rapid organic innovation and acquisitions, allowing us to effectively execute on our strategy.  One such significant step in expanding our leadership position was the launch of CXone, the industry’s first fully integrated, open, cloud customer service platform. CXone, with its open architecture and hundreds of APIs, is a platform with a complete, analytics based set of integrated applications for the customer service market.  CXone allows NICE and its growing ecosystem of partners to leverage the value of our rapid innovation to the benefit of any enterprise, large and small.  We currently have well over 100 DEVone partners developing solutions on the CXone platform, and these same partners are also offering their solutions in our application marketplace called CXexchange. CXone is the only customer service platform that fully integrates self-service, omnichannel support, analytics and workforce optimization – an ‘all-in-one’ solution for a market that was traditionally forced to purchase solutions piecemeal and expend considerable effort in stitching these solutions together.

CXone is being quickly adopted by our customers, making NICE the preeminent cloud provider in our industry, and it has helped us gain a strong foothold in the mid-market, augmenting our already leading position in the large enterprise market.  Our cloud success is reflected in our strong growth in cloud revenues in 2017 and the more than 550 new cloud customers that we won in 2017, and our platform was recognized by industry analysts as the leading customer service cloud platform.  

Cloud has also become a key strategic component in our financial crime and compliance business.  With Essentials, our cloud anti-money laundering and fraud prevention solution, we have already seen significant progress in entering the market for mid-tier financial institutions.  Moreover, one of the largest core banking providers selected Essentials as their standard market offering. This strategic partnership opens up a new and valuable distribution channel to deliver our cloud solutions to thousands of mid-tier financial institutions.

Analytics continues to play a vital role in our platform strategy, and throughout 2017 continued to be a fast growing part of our business, representing more than 60% of our new business.  In 2017, we further enhanced our analytics with the infusion of artificial intelligence.  Artificial intelligence has enabled us to provide analytics solutions that go beyond just providing recommendations to actually automating business actions. There are multiple examples throughout our portfolio. Our cognitive robotics automation solution powered by AI witnessed rapid growth in 2017 and was adopted by some of the leading enterprises worldwide for their most critical business processes. Another example is ActimizeWatch, which is part of our autonomous financial crime management offering that uses consortium data and state of the art machine learning to help defend against potential new types of fraud.  We believe that we are only scratching the surface with the potential of AI, and with thousands of customers and new technologies being developed every day, there is great opportunity for further growth in this strategic pillar.

With the momentum we generated in 2017, we are entering 2018 with a clear strategy, execution plan and endless energy. As we step into 2018 and beyond, we are well positioned for continued success, and to capitalize on our expanding addressable market. We have the industry’s leading technology assets, we have talented and passionate people, and we are in one of the strongest competitive positions that we have ever been.  All this, together with the healthy end markets, makes us excited about the opportunities ahead.

I would like to thank our customers and partners who give us such positive feedback and continue to show such strong support for our business. Whether it is through customer surveys or reference calls, our customers and partners make us feel great about the work we are doing and the impact we are making, and they continue to recognize us as their trusted business partners.

I would like to thank our shareholders for their continued support.  We are incredibly proud of what our company stands for and what we have delivered, but we are even more excited for what the future holds for NICE.

And, I want to recognize our employees.  You run the ship day in and day out, and there is no one more important to NICE than the people that make it what it is today – the clear market leader in our industry.  Thank you for the hard work, new ideas and unrelenting dedication and determination to seeing us succeed.



   Barak Eilam,
   Chief Executive Officer

   March 30, 2018

​ ​​​​​​​​​