----

----

|   | R | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|---|-----------------------------------------------------------------------------------------|

|   | o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|---|------------------------------------------------------------------------------------------|

| Indiana(State or other jurisdictionof incorporation or organization)                                   |   | 35-1933097(I.R.S. EmployerIdentification No.) |
|--------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|
|                                                                                                   |   |                                          |
| 7601 Interactive WayIndianapolis, IN 46278(Address of principal executive offices, including zip code) |
|                                                                                                   |   |                                          |
| (317) 872-3000(Registrant’s telephone number, including area code)                               |
|                                                                                                   |   |                                          |
| Not Applicable                                                                                         |
| (Former name, former address and former fiscal year, if changed since last report)                     |

----

| Yes     R | No       ̈ |
|------------------------------------|----------------------------------------------|

| Yes      ̈ | No       ̈ |
|-----------------------------------------|----------------------------------------------|

| Large accelerated filer |  ̈ |   | Accelerated filer | R |   | Non-accelerated filer (Do not check if a smaller reporting company) |  ̈ |   | Smaller reporting company |  ̈ |
|-------------------------|--------|--------|-------------------|---|--------|---------------------------------------------------------------------|--------|--------|---------------------------|--------|

----

----

----

| PART I. FINANCIAL INFORMATION |                                                                                                        | Page   |   |
|-------------------------------|-------------------------------------------------------------------------------------------------------------|--------|--------|
|                          |                                                                                                        |   |   |   |
| Item 1.                       | Financial Statements.                                                                                       |   |   |   |
|                          |                                                                                                        |   |   |   |
|                          | Condensed Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009                        |   |   | 1 |   |
|                          |                                                                                                        |   |   |   |   |
|                          | Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2010 and 2009 |   |   | 2 |   |
|                          |                                                                                                        |   |   |   |   |
|                          | Condensed Consolidated Statement of Shareholders’ Equity for the Nine Months Ended September 30, 2010 |   |   | 3 |   |
|                          |                                                                                                        |   |   |   |   |
|                          | Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2010 and 2009       |   |   | 4 |   |
|                          |                                                                                                        |   |   |   |   |
|                          | Notes to Condensed Consolidated Financial Statements                                                        |   |   | 5 |   |
|                          |                                                                                                        |   |   |   |   |
| Item 2.                       | Management’s Discussion and Analysis of Financial Condition and Results of Operations.                |   |   | 10 |   |
|                          |                                                                                                        |   |   |   |   |
| Item 3.                       | Quantitative and Qualitative Disclosures About Market Risk.                                                 |   |   | 18 |   |
|                          |                                                                                                        |   |   |   |   |
| Item 4.                       | Controls and Procedures.                                                                                    |   |   | 18 |   |
|                          |                                                                                                        |   |   |   |   |
| PART II. OTHER INFORMATION    |                                                                                                        |   |   |   |
|                          |                                                                                                        |   |   |   |   |
| Item 1.                       | Legal Proceedings.                                                                                          |   |   | 18 |   |
|                          |                                                                                                        |   |   |   |   |
| Item 1A.                      | Risk Factors.                                                                                               |   |   | 18 |   |
|                          |                                                                                                        |   |   |   |   |
| Item 6.                       | Exhibits.                                                                                                   |   |   | 19 |   |
|                          |                                                                                                        |   |   |   |   |
| SIGNATURE                     |                                                                                                        |   | 20     |   |

----

|                                                                                                                                                                                        |   | September 30,2010 |    |   | December 31,2009 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|------------------|--------|
| Assets                                                                                                                                                                                      |   | (unaudited)       |    |   |             |   |
| Current assets:                                                                                                                                                                             |   |              |    |   |             |   |
| Cash and cash equivalents                                                                                                                                                                   |   | $                 | 49,688  |   |             | $      | 48,497 |   |
| Short-term investments                                                                                                                                                                      |   |              | 35,842  |   |             |   | 16,482 |   |
| Accounts receivable, net of allowance for doubtful accounts of $1,060 at September 30, 2010 and $1,094 at   December 31, 2009                                                     |   |              | 32,417  |   |             |   | 32,092 |   |
| Deferred tax assets, net                                                                                                                                                                    |   |              | 5,499   |   |             |   | 5,808 |   |
| Prepaid expenses                                                                                                                                                                            |   |              | 7,754   |   |             |   | 5,976 |   |
| Other current assets                                                                                                                                                                        |   |              | 5,039   |   |             |   | 3,935 |   |
| Total current assets                                                                                                                                                                        |   |              | 136,239 |   |             |   | 112,790 |   |
| Property and equipment, net                                                                                                                                                                 |   |              | 8,925   |   |             |   | 8,499 |   |
| Deferred tax assets, net                                                                                                                                                                    |   |              | 6,870   |   |             |   | 6,505 |   |
| Other assets, net                                                                                                                                                                           |   |              | 4,844   |   |             |   | 4,874 |   |
| Total assets                                                                                                                                                                                |   | $                 | 156,878 |   |             | $      | 132,668 |   |
|                                                                                                                                                                                        |   |              |    |   |             |   |   |   |
| Liabilities and Shareholders’ Equity                                                                                                                                                  |   |              |    |   |             |   |   |   |
| Current liabilities:                                                                                                                                                                        |   |              |    |   |             |   |   |   |
| Accounts payable and accrued liabilities                                                                                                                                                    |   | $                 | 14,511  |   |             | $      | 11,903 |   |
| Accrued compensation and related expenses                                                                                                                                                   |   |              | 5,669   |   |             |   | 4,946 |   |
| Deferred product revenues                                                                                                                                                                   |   |              | 4,950   |   |             |   | 5,567 |   |
| Deferred services revenues                                                                                                                                                                  |   |              | 40,456  |   |             |   | 36,225 |   |
| Total current liabilities                                                                                                                                                                   |   |              | 65,586  |   |             |   | 58,641 |   |
| Deferred revenue                                                                                                                                                                            |   |              | 6,398   |   |             |   | 6,420 |   |
| Total liabilities                                                                                                                                                                           |   |              | 71,984  |   |             |   | 65,061 |   |
|                                                                                                                                                                                        |   |              |    |   |             |   |   |   |
| Commitments and contingencies (Note 7)                                                                                                                                                      |   |              | --      |   |             |   | -- |   |
|                                                                                                                                                                                        |   |              |    |   |             |   |   |   |
| Shareholders’ equity:                                                                                                                                                                 |   |              |    |   |             |   |   |   |
| Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding                                                                                               |   |              | --      |   |             |   | -- |   |
| Common stock, $0.01 par value; 100,000,000 shares authorized; 17,568,613 issued and outstanding at September 30, 2010  and 17,276,990 issued and outstanding at December 31, 2009 |   |              | 176     |   |             |   | 173 |   |
| Treasury stock, at cost; 524,252 shares as of September 30, 2010 and 815,875 shares as of December 31, 2009                                                                                 |   |              | (3,973  | )      |             |   | (6,242 | ) |
| Additional paid-in capital                                                                                                                                                                  |   |              | 100,199 |   |             |   | 92,815 |   |
| Accumulated deficit                                                                                                                                                                         |   |              | (11,508 | )      |             |   | (19,139 | ) |
| Total shareholders’ equity                                                                                                                                                            |   |              | 84,894  |   |             |   | 67,607 |   |
| Total liabilities and shareholders’ equity                                                                                                                                            |   | $                 | 156,878 |   |             | $      | 132,668 |   |

----

|                                         |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|----------------------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                                         |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
| Revenues:                                    |   |                            |   |   |                           |   |   |   |   |   |   |   |
| Product                                      |   | $                               | 20,586 |   |                           | $      | 15,557 |   |   | $ | 54,484 |   |   | $ | 45,100 |   |
| Services                                     |   |                            | 21,245 |   |                           |   | 17,613 |   |   |   | 61,181 |   |   |   | 50,441 |   |
| Total revenues                               |   |                            | 41,831 |   |                           |   | 33,170 |   |   |   | 115,665 |   |   |   | 95,541 |   |
| Cost of revenues:                            |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Product                                      |   |                            | 6,198  |   |                           |   | 3,950 |   |   |   | 16,499 |   |   |   | 12,320 |   |
| Services                                     |   |                            | 6,767  |   |                           |   | 5,549 |   |   |   | 18,552 |   |   |   | 16,758 |   |
| Total cost of revenues                       |   |                            | 12,965 |   |                           |   | 9,499 |   |   |   | 35,051 |   |   |   | 29,078 |   |
| Gross profit                                 |   |                            | 28,866 |   |                           |   | 23,671 |   |   |   | 80,614 |   |   |   | 66,463 |   |
| Operating expenses:                          |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Sales and marketing                          |   |                            | 12,106 |   |                           |   | 9,696 |   |   |   | 33,939 |   |   |   | 28,877 |   |
| Research and development                     |   |                            | 7,193  |   |                           |   | 6,135 |   |   |   | 20,562 |   |   |   | 17,747 |   |
| General and administrative                   |   |                            | 3,960  |   |                           |   | 3,562 |   |   |   | 11,859 |   |   |   | 10,166 |   |
| Total operating expenses                     |   |                            | 23,259 |   |                           |   | 19,393 |   |   |   | 66,360 |   |   |   | 56,790 |   |
| Operating income                             |   |                            | 5,607  |   |                           |   | 4,278 |   |   |   | 14,254 |   |   |   | 9,673 |   |
| Other income (expense):                      |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                              |   |                            | 120    |   |                           |   | 50 |   |   |   | 228 |   |   |   | 232 |   |
| Other income (expense), net                  |   |                            | 337    |   |                           |   | 480 |   |   |   | (1,029 | ) |   |   | 706 |   |
| Total other income (expense), net            |   |                            | 457    |   |                           |   | 530 |   |   |   | (801 | ) |   |   | 938 |   |
| Income before income taxes                   |   |                            | 6,064  |   |                           |   | 4,808 |   |   |   | 13,453 |   |   |   | 10,611 |   |
| Income tax expense                           |   |                            | 2,561  |   |                           |   | 2,005 |   |   |   | 5,627 |   |   |   | 4,488 |   |
| Net income                                   |   | $                               | 3,503  |   |                           | $      | 2,803 |   |   | $ | 7,826 |   |   | $ | 6,123 |   |
|                                         |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net income per share:                        |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                        |   | $                               | 0.20   |   |                           | $      | 0.16 |   |   | $ | 0.45 |   |   | $ | 0.36 |   |
| Diluted                                      |   |                            | 0.19   |   |                           |   | 0.15 |   |   |   | 0.42 |   |   |   | 0.34 |   |
|                                         |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Shares used to compute net income per share: |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                        |   |                            | 17,524 |   |                           |   | 17,148 |   |   |   | 17,431 |   |   |   | 17,038 |   |
| Diluted                                      |   |                            | 18,695 |   |                           |   | 18,486 |   |   |   | 18,731 |   |   |   | 18,125 |   |

----

|                                               |   | Common Stock |   |   | Treasury |   |   | AdditionalPaid-in |   |   | Accumulated |   |   |    |    |
|----------------------------------------------------|--------|--------------|--------|--------|----------|--------|--------|-------------------|--------|--------|-------------|--------|--------|---------|---------|
|                                               |   | Shares       |   |   | Stock    |   |   | Stock             |   |   | Capital     |   |   | Deficit |    |   | Total |   |
| Balances, December 31, 2009                        |   |         | 17,277 |   |     | $      | 173    |              |   | $      | (6,242      | )      |   | $       | 92,815  |   |   | $ | (19,139 | ) |   | $ | 67,607 |   |
|                                               |   |         |   |   |     |   |   |              |   |   |        |   |   |    |    |   |   |   |   |   |   |   |   |   |
| Stock-based compensation                           |   |         | --     |   |     |   | --     |              |   |   | --          |   |   |    | 3,002   |   |   |   | -- |   |   |   | 3,002 |   |
| Exercise of stock options                          |   |         | 277    |   |     |   | 3      |              |   |   | 2,149       |   |   |    | (127    | ) |   |   | (195 | ) |   |   | 1,830 |   |
| Issuances of common stock                          |   |         | 15     |   |     |   | --     |              |   |   | 120         |   |   |    | 141     |   |   |   | -- |   |   |   | 261 |   |
| Tax benefits from stock-based payment arrangements |   |         | --     |   |     |   | --     |              |   |   | --          |   |   |    | 4,528   |   |   |   | -- |   |   |   | 4,528 |   |
| Comprehensive income:                              |   |         |   |   |     |   |   |              |   |   |        |   |   |    |    |   |   |   |   |   |   |   |   |   |
| Net income                                         |   |         | --     |   |     |   | --     |              |   |   | --          |   |   |    | --      |   |   |   | 7,826 |   |   |   | 7,826 |   |
| Net unrealized investment gain                     |   |         | --     |   |     |   | --     |              |   |   | --          |   |   |    | (160    | ) |   |   | -- |   |   |   | (160 | ) |
| Total comprehensive income                         |   |         | --     |   |     |   | --     |              |   |   | --          |   |   |    | (160    | ) |   |   | 7,826 |   |   |   | 7,666 |   |
| Balances, September 30, 2010                       |   |         | 17,569 |   |     | $      | 176    |              |   | $      | (3,973      | )      |   | $       | 100,199 |   |   | $ | (11,508 | ) |   | $ | 84,894 |   |

----

|                                                                                         |   | Nine Months EndedSeptember 30, |    |
|----------------------------------------------------------------------------------------------|--------|--------------------------------|---------|
|                                                                                         |   | 2010                           |    |   | 2009 |   |
| Operating activities:                                                                        |   |                           |    |   |   |   |
| Net income                                                                                   |   | $                              | 7,826   |   |   | $ | 6,123 |   |
| Adjustments to reconcile net income to net cash  provided by operating activities: |   |                           |    |   |   |   |   |   |
| Depreciation                                                                                 |   |                           | 3,107   |   |   |   | 3,139 |   |
| Stock-based compensation expense                                                             |   |                           | 3,002   |   |   |   | 2,547 |   |
| Tax benefits from stock-based payment arrangements                                           |   |                           | (4,528  | ) |   |   | (2,814 | ) |
| Deferred income tax                                                                          |   |                           | (56     | ) |   |   | 884 |   |
| Accretion of investment income                                                               |   |                           | (407    | ) |   |   | (172 | ) |
| Changes in operating assets and liabilities:                                                 |   |                           |    |   |   |   |   |   |
| Accounts receivable                                                                          |   |                           | (325    | ) |   |   | 2,872 |   |
| Prepaid expenses                                                                             |   |                           | (1,778  | ) |   |   | 1,009 |   |
| Other current assets                                                                         |   |                           | (1,104  | ) |   |   | (1,928 | ) |
| Other assets                                                                                 |   |                           | 30      |   |   |   | 281 |   |
| Accounts payable and accrued liabilities                                                     |   |                           | 7,143   |   |   |   | 1,969 |   |
| Accrued compensation and related expenses                                                    |   |                           | 723     |   |   |   | 1,043 |   |
| Deferred product revenues                                                                    |   |                           | (717    | ) |   |   | (1,349 | ) |
| Deferred services revenues                                                                   |   |                           | 4,309   |   |   |   | (566 | ) |
| Net cash provided by operating activities                                                    |   |                           | 17,225  |   |   |   | 13,038 |   |
|                                                                                         |   |                           |    |   |   |   |   |   |
| Investing activities:                                                                        |   |                           |    |   |   |   |   |   |
| Sales of available-for-sale investments                                                      |   |                           | 15,565  |   |   |   | 13,100 |   |
| Purchases of available-for-sale investments                                                  |   |                           | (34,678 | ) |   |   | (11,550 | ) |
| Purchases of property and equipment                                                          |   |                           | (3,540  | ) |   |   | (1,275 | ) |
| Acquisition of intangible and other assets, net of cash and cash equivalents                 |   |                           | --      |   |   |   | (2,249 | ) |
| Net cash used in investing activities                                                        |   |                           | (22,653 | ) |   |   | (1,974 | ) |
|                                                                                         |   |                           |    |   |   |   |   |   |
| Financing activities:                                                                        |   |                           |    |   |   |   |   |   |
| Proceeds from stock options exercised                                                        |   |                           | 1,830   |   |   |   | 1,812 |   |
| Proceeds from issuance of common stock                                                       |   |                           | 261     |   |   |   | 189 |   |
| Tax benefits from stock-based payment arrangements                                           |   |                           | 4,528   |   |   |   | 2,814 |   |
| Net cash provided by financing activities                                                    |   |                           | 6,619   |   |   |   | 4,815 |   |
|                                                                                         |   |                           |    |   |   |   |   |   |
| Net increase in cash and cash equivalents                                                    |   |                           | 1,191   |   |   |   | 15,879 |   |
| Cash and cash equivalents, beginning of year                                                 |   |                           | 48,497  |   |   |   | 34,705 |   |
| Cash and cash equivalents, end of year                                                       |   | $                              | 49,688  |   |   | $ | 50,584 |   |
|                                                                                         |   |                           |    |   |   |   |   |   |
| Cash paid during the year for:                                                               |   |                           |    |   |   |   |   |   |
| Interest                                                                                     |   | $                              | 1       |   |   | $  |  -- |   |
| Income taxes                                                                                 |   |                           | 716     |   |   |   | 533 |   |
|                                                                                         |   |                           |    |   |   |   |   |   |
| Other non-cash item:                                                                         |   |                           |    |   |   |   |   |   |
| Purchase of property and equipment payable at end of period                                  |   | $                              | 22      |   |   | $ | 42 |   |

----

| 1. | FINANCIAL STATEMENT PRESENTATION |
|----|----------------------------------|

| 2. | SUMMARY OF CERTAIN ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS |
|----|-----------------------------------------------------------------------------|

----

| 3. | FAIR VALUE MEASUREMENTS |
|----|-------------------------|

| ·   | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.   |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                             |   | Fair Value Measurements atReporting Date Using |   |
|--------------------------------------------------|--------|------------------------------------------------|--------|
| Description                                      |   | Total                                          |   |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   |   | SignificantOther ObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Cash & cash equivalents:                     |   |                                           |   |   |   |   |   |   |   |   |   |   |
|      Money Market Funds |   | $                                              | 19,880 |   |   | $ | 19,880 |   |   | $ | -- |   |   | $ | -- |   |
|      Total              |   | $                                              | 19,880 |   |   | $ | 19,880 |   |   | $ | -- |   |   | $ | -- |   |
|                                             |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term investments:                          |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial Paper                                 |   | $                                              | 849    |   |   | $ | -- |   |   | $ | 849 |   |   | $ | -- |   |
| Agency Bonds                                     |   |                                           | 8,830  |   |   |   | -- |   |   |   | 8,830 |   |   |   | -- |   |
| Corporate Notes                                  |   |                                           | 19,765 |   |   |   | -- |   |   |   | 19,765 |   |   |   | -- |   |
| T-Bills                                          |   |                                           | 6,398  |   |   |   | -- |   |   |   | 6,398 |   |   |   | -- |   |
| Total                                            |   | $                                              | 35,842 |   |   | $ | -- |   |   | $ | 35,842 |   |   | $ | -- |   |

| 4. | NET INCOME PER SHARE |
|----|----------------------|

|                                                    |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|---------------------------------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                                                    |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
| Net income, as reported (A)                             |   | $                               | 3,503  |   |                           | $      | 2,803 |   |   | $ | 7,826 |   |   | $ | 6,123 |   |
|                                                    |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares of common stock outstanding (B) |   |                            | 17,524 |   |                           |   | 17,148 |   |   |   | 17,431 |   |   |   | 17,038 |   |
| Dilutive effect of employee stock options               |   |                            | 1,171  |   |                           |   | 1,338 |   |   |   | 1,300 |   |   |   | 1,087 |   |
| Common stock and common stock equivalents (C)           |   |                            | 18,695 |   |                           |   | 18,486 |   |   |   | 18,731 |   |   |   | 18,125 |   |
|                                                    |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net income per share:                                   |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic (A/B)                                             |   | $                               | 0.20   |   |                           | $      | 0.16 |   |   | $ | 0.45 |   |   | $ | 0.36 |   |
| Diluted (A/C)                                           |   |                            | 0.19   |   |                           |   | 0.15 |   |   |   | 0.42 |   |   |   | 0.34 |   |

----

| 5. | STOCK-BASED COMPENSATION |
|----|--------------------------|

|                                          |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|-----------------------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                                          |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
| Stock-based compensation expense by category: |   |                            |   |   |                           |   |   |   |   |   |   |   |
| Cost of services                              |   | $                               | 86     |   |                           | $      | 71 |   |   | $ | 228 |   |   | $ | 186 |   |
| Sales and marketing                           |   |                            | 332    |   |                           |   | 352 |   |   |   | 971 |   |   |   | 890 |   |
| Research and development                      |   |                            | 285    |   |                           |   | 254 |   |   |   | 881 |   |   |   | 726 |   |
| General and administrative                    |   |                            | 326    |   |                           |   | 298 |   |   |   | 922 |   |   |   | 745 |   |
| Total stock-based compensation expense        |   | $                               | 1,029  |   |                           | $      | 975 |   |   | $ | 3,002 |   |   | $ | 2,547 |   |

|                                                     |   | Nine Months EndedSeptember 30, |          |
|----------------------------------------------------------|--------|--------------------------------|---------------|
| Valuation assumptions for non-performance-based options: |   | 2010                           |          |   | 2009 |   |
| Dividend yield                                           |   |                           | --            | % |   |   | -- | % |
| Expected volatility                                      |   |                           | 67.75 - 69.10 | % |   |   | 67.88 – 69.08 | % |
| Risk-free interest rate                                  |   |                           | 1.72 - 2.06   | % |   |   | 1.64 – 2.36 | % |
| Expected life of option (in years)                       |   |                           | 4.25          |   |   |   | 4.25 |   |

----

| Valuation assumptions for performance-based options: |   | 2010   |   |   | 2009   |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Dividend yield                                       |   |   | --     | %      |   |   | -- | % |
| Expected volatility                                  |   |   | 67.81  | %      |   |   | 67.35 | % |
| Risk-free interest rate                              |   |   | 2.30   | %      |   |   | 1.77 | % |
| Expected life of option (in years)                   |   |   | 4.75   |   |   |   | 4.75 |   |

|  Valuation assumptions for annual director options: |   | 2010   |   |   | 2009   |   |
|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Dividend yield                                           |   |   | --     | %      |   |   | -- | % |
| Expected volatility                                      |   |   | 64.43  | %      |   |   | 71.48 | % |
| Risk-free interest rate                                  |   |   | 1.41   | %      |   |   | 2.01 | % |
| Expected life of option (in years)                       |   |   | 3.50   |   |   |   | 3.50 |   |

|                                           |   | As of September 30, 2010 |               |
|------------------------------------------------|--------|--------------------------|--------------------|
|                                           |   | Options                  |               |   | Weighted-AverageExercise Price |   |
|                                           |   |                     |               |   |   |   |
| Balances, beginning of year                    |   |                     | 3,425,743          |   |   | $ | 9.36 |   |
| Options granted                                |   |                     | 566,500            |   |   |   | 19.61 |   |
| Options exercised                              |   |                     | (276,774           | ) |   |   | 6.61 |   |
| Options cancelled, forfeited or expired        |   |                     | (37,451            | ) |   |   | 25.96 |   |
| Options outstanding                            |   |                     | 3,678,018          |   |   |   | 10.95 |   |
| Option price range                             |   | $                        | 2.51 – 38.75 |   |   |   |   |   |
| Weighted-average fair value of options granted |   | $                        | 10.57              |   |   |   |   |   |
| Options exercisable                            |   |                     | 2,385,425          |   |   | $ | 8.70 |   |
| Options available for grant                    |   |                     | 1,742,554          |   |   |   |   |   |
|                                           |   |

| 6. | CONCENTRATION OF CREDIT RISK |
|----|------------------------------|

| 7. | COMMITMENTS AND CONTINGENCIES |
|----|-------------------------------|

----

| 8. | INCOME TAXES |
|----|--------------|

|                                                                            |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|---------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                                                                            |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
| Expected income tax expense at 35% tax rate                                     |   | $                               | 2,122  |   |                           | $      | 1,674 |   |   | $ | 4,709 |   |   | $ | 3,705 |   |
| State taxes, net of federal benefit                                             |   |                            | 424    |   |                           |   | 249 |   |   |   | 952 |   |   |   | 563 |   |
| Stock-based compensation expense related to non-deductible stock option expense |   |                            | 72     |   |                           |   | 147 |   |   |   | 238 |   |   |   | 395 |   |
| Research tax credit                                                             |   |                            | --     |   |                           |   | (63 | ) |   |   | -- |   |   |   | (189 | ) |
| Disqualifying dispositions                                                      |   |                            | (74    | )      |                           |   | -- |   |   |   | (251 | ) |   |   | -- |   |
| Other                                                                           |   |                            | 17     |   |                           |   | (2 | ) |   |   | (21 | ) |   |   | 14 |   |
| Income tax expense                                                              |   | $                               | 2,561  |   |                           | $      | 2,005 |   |   | $ | 5,627 |   |   | $ | 4,488 |   |

| 9. | ACQUISITION |
|----|-------------|

----

| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
|---------|----------------------------------------------------------------------------------------------|

|           · | Forward-Looking Information |
|---------------------------------------------------------------|-----------------------------|

|           · | Overview |
|---------------------------------------------------------------|----------|

|           · | Financial Highlights |
|---------------------------------------------------------------|----------------------|

|           · | Historical Results of Operations |
|---------------------------------------------------------------|----------------------------------|

|           · | Comparison of Three and Nine Months Ended September 30, 2010 and 2009 |
|---------------------------------------------------------------|-----------------------------------------------------------------------|

|           · | Liquidity and Capital Resources |
|---------------------------------------------------------------|---------------------------------|

|           · | Critical Accounting Policies and Estimates |
|---------------------------------------------------------------|--------------------------------------------|

| ·   | Multichannel contact management and business communications (voice and messaging) using the Session Initiation Protocol (“SIP”) global communications standard that supports VoIP; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Business process automation (“BPA”) using a communications-based approach; and |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | Content management, including document as well as workflow management. |
|--------------------|------------------------------------------------------------------------|

----

| ·   | The Contact Center |
|--------------------|--------------------|

| ·   | Enterprise IP Telephony |
|--------------------|-------------------------|

| ·   | Business Process Automation |
|--------------------|-----------------------------|

|                                       |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|--------------------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                                       |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                                       |   |                            |   |   |                           |   |   |   |   |   |   |   |
| Net income, as reported                    |   | $                               | 3,503  |   |                           | $      | 2,803 |   |   | $ | 7,826 |   |   | $ | 6,123 |   |
| Non-cash stock-based compensation expense: |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Cost of services                           |   |                            | 86     |   |                           |   | 71 |   |   |   | 228 |   |   |   | 186 |   |
| Sales and marketing                        |   |                            | 332    |   |                           |   | 352 |   |   |   | 971 |   |   |   | 890 |   |
| Research and development                   |   |                            | 285    |   |                           |   | 254 |   |   |   | 881 |   |   |   | 726 |   |
| General and administrative                 |   |                            | 326    |   |                           |   | 298 |   |   |   | 922 |   |   |   | 745 |   |
| Total                                      |   |                            | 1,029  |   |                           |   | 975 |   |   |   | 3,002 |   |   |   | 2,547 |   |
| Non-cash income tax expense                |   |                            | 2,410  |   |                           |   | 1,913 |   |   |   | 5,196 |   |   |   | 4,257 |   |
| Non-GAAP net income                        |   | $                               | 6,942  |   |                           | $      | 5,691 |   |   | $ | 16,024 |   |   | $ | 12,927 |   |
|                                       |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Operating income, as reported              |   | $                               | 5,607  |   |                           | $      | 4,278 |   |   | $ | 14,254 |   |   | $ | 9,673 |   |
| Non-cash stock-based compensation expense  |   |                            | 1,029  |   |                           |   | 975 |   |   |   | 3,002 |   |   |   | 2,547 |   |
| Non-GAAP operating income                  |   | $                               | 6,636  |   |                           | $      | 5,253 |   |   | $ | 17,256 |   |   | $ | 12,220 |   |
|                                       |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Diluted EPS, as reported                   |   | $                               | 0.19   |   |                           | $      | 0.15 |   |   | $ | 0.42 |   |   | $ | 0.34 |   |
| Non-cash stock-based compensation expense  |   |                            | 0.06   |   |                           |   | 0.05 |   |   |   | 0.16 |   |   |   | 0.14 |   |
| Non-cash income tax expense                |   |                            | 0.12   |   |                           |   | 0.11 |   |   |   | 0.28 |   |   |   | 0.23 |   |
| Non-GAAP diluted EPS                       |   | $                               | 0.37   |   |                           | $      | 0.31 |   |   | $ | 0.86 |   |   | $ | 0.71 |   |

----

| Period                                    |   | Revenues |   |   | SequentialGrowth % |   |
|-------------------------------------------|--------|----------|--------|--------|--------------------|--------|
| Three Months Ended:                       |   |     |   |   |               |   |
| September 30, 2010                        |   | $        | 41.8   |   |               |   | 8 | % |
| June 30, 2010                             |   |     | 38.8   |   |               |   | 11 | % |
| March 31, 2010                            |   |     | 35.0   |   |               |   | (3 | )% |
| December 31, 2009                         |   |     | 35.9   |   |               |   | 8 | % |
| September 30, 2009                        |   |     | 33.2   |   |               |   | 1 | % |
|                                      |   |     |   |   |               |   |   |   |
| Year Ended December 31:                   |   |     |   |   |               |   |   |   |
| 2010 year-to-date (9 months vs. 9 months) |   | $        | 115.7  |   |               |   | 21 | % |
| 2009                                      |   |     | 131.4  |   |               |   | 8 | % |
| 2008                                      |   |     | 121.4  |   |               |   | 10 | % |
| 2007                                      |   |     | 109.9  |   |               |   | 32 | % |

----

|                        |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|-----------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                        |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
| Revenues:                   |   |                            |   |   |                           |   |   |   |   |   |   |   |
| Product                     |   |                            | 49     | %      |                           |   | 47 | % |   |   | 47 | % |   |   | 47 | % |
| Services                    |   |                            | 51     |   |                           |   | 53 |   |   |   | 53 |   |   |   | 53 |   |
| Total revenues              |   |                            | 100    |   |                           |   | 100 |   |   |   | 100 |   |   |   | 100 |   |
| Cost of revenues:           |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Product                     |   |                            | 15     |   |                           |   | 12 |   |   |   | 14 |   |   |   | 13 |   |
| Services                    |   |                            | 16     |   |                           |   | 17 |   |   |   | 16 |   |   |   | 17 |   |
| Total cost of revenues      |   |                            | 31     |   |                           |   | 29 |   |   |   | 30 |   |   |   | 30 |   |
| Gross profit                |   |                            | 69     |   |                           |   | 71 |   |   |   | 70 |   |   |   | 70 |   |
| Operating expenses:         |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Sales and marketing         |   |                            | 29     |   |                           |   | 29 |   |   |   | 29 |   |   |   | 30 |   |
| Research and development    |   |                            | 18     |   |                           |   | 18 |   |   |   | 18 |   |   |   | 18 |   |
| General and administrative  |   |                            | 10     |   |                           |   | 11 |   |   |   | 10 |   |   |   | 11 |   |
| Total operating expenses    |   |                            | 56     |   |                           |   | 58 |   |   |   | 57 |   |   |   | 59 |   |
| Operating income            |   |                            | 13     |   |                           |   | 13 |   |   |   | 13 |   |   |   | 10 |   |
| Other income (expense):     |   |                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Interest income, net        |   |                            | --     |   |                           |   | -- |   |   |   | -- |   |   |   | -- |   |
| Other income (expense), net |   |                            | 1      |   |                           |   | 1 |   |   |   | (1 | ) |   |   | 1 |   |
| Total other income          |   |                            | 1      |   |                           |   | 1 |   |   |   | (1 | ) |   |   | 1 |   |
| Income before income taxes  |   |                            | 14     |   |                           |   | 14 |   |   |   | 12 |   |   |   | 11 |   |
| Income tax expense          |   |                            | 6      |   |                           |   | 6 |   |   |   | 5 |   |   |   | 5 |   |
| Net income                  |   |                            | 8      | %      |                           |   | 8 | % |   |   | 7 | % |   |   | 6 | % |

| Product Revenues         |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|-------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                          |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                          |   | ($ in thousands)                |   |
| Product revenues              |   | $                               | 20,586 |   |                           | $      | 15,557 |   |   | $ | 54,484 |   |   | $ | 45,100 |   |
| Change from prior year period |   |                            | 32     | %      |                           |   | 6 | % |   |   | 21 | % |   |   | 1 | % |
| Percentage of total revenues  |   |                            | 49     | %      |                           |   | 47 | % |   |   | 47 | % |   |   | 47 | % |

----

| Services Revenues             |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|-------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                          |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                          |   | ($ in thousands)                |   |
| Services revenues             |   | $                               | 21,245 |   |                           | $      | 17,613 |   |   | $ | 61,181 |   |   | $ | 50,441 |   |
| Change from prior year period |   |                            | 21     | %      |                           |   | 15 | % |   |   | 21 | % |   |   | 11 | % |
| Percentage of total revenues  |   |                            | 51     | %      |                           |   | 53 | % |   |   | 53 | % |   |   | 53 | % |

| Cost of Revenues                           |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|--------------------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                                       |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                                       |   | ($ in thousands)                |   |
| Cost of revenues:                          |   |                            |   |   |                           |   |   |   |   |   |   |   |
| Product                                    |   | $                               | 6,198  |   |                           | $      | 3,950 |   |   | $ | 16,499 |   |   | $ | 12,320 |   |
| Services                                   |   |                            | 6,767  |   |                           |   | 5,549 |   |   |   | 18,552 |   |   |   | 16,758 |   |
| Total cost of revenues                     |   | $                               | 12,965 |   |                           | $      | 9,499 |   |   | $  | 35,051 |   |   | $ | 29,078 |   |
| Change from prior year period              |   |                            | 36     | %      |                           |   | (3 | )% |   |   | 21 | % |   |   | 1 | % |
| Product costs as a % of product revenues   |   |                            | 30     | %      |                           |   | 25 | % |   |   | 30 | % |   |   | 27 | % |
| Services costs as a % of services revenues |   |                            | 32     | %      |                           |   | 32 | % |   |   | 30 | % |   |   | 33 | % |

----

| Gross Profit                  |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|-------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                          |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                          |   | ($ in thousands)                |   |
| Gross profit                  |   | $                               | 28,866 |   |                           | $      | 23,671 |   |   | $ | 80,614 |   |   | $ | 66,463 |   |
| Change from prior year period |   |                            | 22     | %      |                           |   | 17 | % |   |   | 21 | % |   |   | 8 | % |
| Percentage of total revenues  |   |                            | 69     | %      |                           |   | 71 | % |   |   | 70 | % |   |   | 70 | % |

| Sales and Marketing                |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|------------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                               |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                               |   | ($ in thousands)                |   |
| Sales and marketing expenses       |   | $                               | 12,106 |   |                           | $      | 9,696 |   |   | $ | 33,939 |   |   | $ | 28,877 |   |
| Change from prior year period      |   |                            | 25     | %      |                           |   | 2 | % |   |   | 18 | % |   |   | (3 | )% |
| Percentage of total revenues       |   |                            | 29     | %      |                           |   | 29 | % |   |   | 29 | % |   |   | 30 | % |
| Percentage of net product revenues |   |                            | 84     | %      |                           |   | 84 | % |   |   | 89 | % |   |   | 88 | % |

| Research and Development          |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|-----------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                              |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                              |   | ($ in thousands)                |   |
| Research and development expenses |   | $                               | 7,193  |   |                           | $      | 6,135 |   |   | $ | 20,562 |   |   | $ | 17,747 |   |
| Change from prior year period     |   |                            | 17     | %      |                           |   | 6 | % |   |   | 16 | % |   |   | 10 | % |
| Percentage of total revenues      |   |                            | 17     | %      |                           |   | 18 | % |   |   | 18 | % |   |   | 19 | % |

----

| General and Administrative          |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|-------------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                                |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                                |   | ($ in thousands)                |   |
| General and administrative expenses |   | $                               | 3,960  |   |                           | $      | 3,562 |   |   | $ | 11,859 |   |   | $ | 10,166 |   |
| Change from prior year period       |   |                            | 11     | %      |                           |   | 5 | % |   |   | 17 | % |   |   | (9 | )% |
| Percentage of total revenues        |   |                            | 9      | %      |                           |   | 11 | % |   |   | 10 | % |   |   | 11 | % |

|  Interest Income, Net                                  |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|-------------------------------------------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                                                        |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                                                        |   | ($ in thousands)                |   |
| Cash, cash equivalents and short-term investments (average) |   | $                               | 80,538 |   |                           | $      | 57,031 |   |   | $ | 75,255 |   |   | $ | 52,760 |   |
| Interest income                                             |   |                            | 120    |   |                           |   | 50 |   |   |   | 228 |   |   |   | 232 |   |
| Return on investment (annualized)                           |   |                            | 0.60   | %      |                           |   | 0.35 | % |   |   | 0.40 | % |   |   | 0.59 | % |

| Other Income (Expense), Net |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|-----------------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                        |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                        |   | ($ in thousands)                |   |
| Other income (expense), net |   | $                               | 337    |   |                           | $      | 480 |   |   | $ | (1,029 | ) |   | $ | 706 |   |

| Income tax expense |   | Three Months EndedSeptember 30, |   |   | Nine Months EndedSeptember 30, |   |
|--------------------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|               |   | 2010                            |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|               |   | ($ in thousands)                |   |
| Income tax expense |   | $                               | 2,561  |   |                           | $      | 2,005 |   |   | $ | 5,627 |   |   | $ | 4,488 |   |

----

|                      |   | September 30,2010 |   |   | December 31,2009 |   |
|---------------------------|--------|-------------------|--------|--------|------------------|--------|
|                      |   | ($ in thousands)  |   |
| Cash and cash equivalents |   | $                 | 49,688 |   |             | $      | 48,497 |   |
| Short-term investments    |   |              | 35,842 |   |             |   | 16,482 |   |
| Total liquidity           |   | $                 | 85,530 |   |             | $      | 64,979 |   |

|                                            |   | Nine Months EndedSeptember 30, |    |
|-------------------------------------------------|--------|--------------------------------|---------|
|                                            |   | 2010                           |    |   | 2009 |   |
|                                            |   |                           |    |
| Beginning cash and cash equivalents             |   | $                              | 48,497  |   |   | $ | 34,705 |   |
| Cash provided by operating activities           |   |                           | 17,225  |   |   |   | 13,038 |   |
| Cash (used in) provided by investing activities |   |                           | (22,653 | ) |   |   | (1,974 | ) |
| Cash provided by financing activities           |   |                           | 6,619   |   |   |   | 4,815 |   |
| Ending cash and cash equivalents                |   | $                              | 49,688  |   |   | $ | 50,584 |   |

----

| Item 3. | Quantitative and Qualitative Disclosures about Market Risk. |
|---------|-------------------------------------------------------------|

| Item 4. | Controls and Procedures. |
|---------|--------------------------|

| Item 1. | Legal Proceedings. |
|---------|--------------------|

| Item 1A. | Risk Factors. |
|----------|---------------|

----

| Item 6. | Exhibits. |
|---------|-----------|

|   | (a) | Exhibits |
|--------|-----|----------|

|           |   |                |                                                                                                                                                                                                 | Incorporated by Reference |                            |   |    |
|----------------|--------|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------|---------------------------------|--------|---------|
| Exhibit Number |   | Exhibit Description |                                                                                                                                                                                                 | Form                      |                            |   | Exhibit |   | Filing Date |   | Filed Herewith |   |
|           | 3.1    |                | Restated Articles of Incorporation of the Company, as currently in effect                                                                                                                            |                      | S-1(Registration No. 333-79509) |   |    |   | 3.1 |   | 5/28/1999 |   |   |   |
|           |   |                |                                                                                                                                                                                                 |                      |                            |   |    |   |   |   |   |   |   |   |
|           | 3.2    |                | Amended By-Laws of the Company, as currently in effect                                                                                                                                               |                      |                            | 8-K    |    |   |   | 3.2 |   | 7/28/2009 |   |   |   |
|           |   |                |                                                                                                                                                                                                 |                      |                            |   |    |   |   |   |   |   |   |   |   |
|           | 31.1   |                | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  |                      |                            |   |    |   |   |   |   |   |   |   | X |   |
|           |   |                |                                                                                                                                                                                                 |                      |                            |   |    |   |   |   |   |   |   |   |   |   |
|           | 31.2   |                | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  |                      |                            |   |    |   |   |   |   |   |   |   | X |   |
|           |   |                |                                                                                                                                                                                                 |                      |                            |   |    |   |   |   |   |   |   |   |   |   |
|           | 32.1   |                | Certification of the Chief Executive Officer, pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                        |                      |                            |   |    |   |   |   |   |   |   |   | X |   |
|           |   |                |                                                                                                                                                                                                 |                      |                            |   |    |   |   |   |   |   |   |   |   |   |
|           | 32.2   |                | Certification of the Chief Financial Officer, pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                        |                      |                            |   |    |   |   |   |   |   |   |   | X |   |

----

|                                    |   |   |   |   |   | Interactive Intelligence, Inc.(Registrant)  |
|-----------------------------------------|--------|--------|--------|--------|--------|---------------------------------------------|
|                                    |   |   |   |   |   |                                        |   |   |
| Date:   November 9, 2010 |   |   |   | By:    |   | /s/     Stephen R. Head |
|                                    |   |   |   |   |   |                                        |   | Stephen R. HeadChief Financial Officer,Vice President of Finance and Administration,Secretary and Treasurer(Principal Financial Officer and Principal Accounting Officer) |

----