Few in our industry deny that SIP has succeeded in becoming the protocol of choice for session management and given the much reduced cost of providing VoIP using SIP, few deny the tremendous cost savings. However, as we communicate SIP and SIP Trunking to a market without technical IP savvy, ANPI and other SIP Trunking service providers may as well be inhabitants of a tower of Babel. SIP, concurrent call session, talk path, channel, trunk, latency, jitter and many other terms associated with VoIP and SIP are not commonly used by our target market, SMBs. Even some of the benefits often listed as reasons for buying can be unclear or unknown to most SMBs. The most often used benefit is cost savings over traditional phone service. However, even that can become mired in an educational session if TDM versus IP is mentioned or the discussion leads to the need for IADs, routers, or an IP PBX to support native SIP. None of these words are part of the common vernacular of most SMB decision makers.

Wikipedia describes SIP Trunking as “… a Voice over Internet Protocol (VoIP) and streaming media service based on the Session Initiation Protocol (SIP) by which Internet telephony service providers (ITSPs) deliver telephone services and unified communications to customers equipped with SIP-based private branch exchange (IP-PBX) and Unified Communications facilities.“ Good luck with using that to clarify what a SIP trunk is and why a small business owner should want one.

Whenever I hire someone from outside our industry I am reminded of the complexity of our industry terms and acronyms. It is very important to use terms that can be easily communicated by our sales teams and understood by our target market. Cost savings, avoiding service interruptions, anywhere access, consolidation of services, remote presence, phone line replacement and many other terms are better suited for non-technical people.

We have made great strides over the last 5 years to market, sell and install SIP Trunks and SIP associated technology and applications. As an industry, we need to continue to develop marketing collateral, articles, case studies, etc. that educate using as little jargon and few industry specific terms as possible. A vast market awaits our SIP Trunks. Communicating with it may be our only barrier.

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President Barack Obama announces the nomination of Tom Wheeler, right, as Chairman of the Federal Communications Commission (FCC), in the White House, May 1, 2013. (Official White House Photo by Lawrence Jackson)

Last week it was announced that President Obama would nominate Thomas Wheeler to replace Julius Genachowski as FCC Chairman. On the surface Thomas Wheeler does not seem like a questionable choice but given the state of things in Washington one can never be sure of anything. Wheeler has been a lobbyist for the wireless and cable industries and served as the president of the National Cable Television Association and CEO of the Cellular Telecommunications and Internet Association. So, he comes into the position rather well versed about the issues facing the industry.

The FCC was established by the Communications Act of 1934 with the mission of regulating interstate and international communications by radio, television and wire. Over time satellite and cable were added to the list. However, the essence of the rules guiding the FCC remained unchanged until the Telecommunications Act of 1996. The principal purpose of the Act of 1996 was to open the telecommunications industry to a broader range of competitors to fuel innovation improving services and pricing for consumers. It has achieved the objective of accelerating innovation and new services but prices continue to rise unabated. Moreover, like so many things written decades ago, the rules governing our industry are often archaic and seldom represent the current state of technology or how services are used.

The Connect America Fund is intended to address the unserved or underserved Americans in rural areas without or inadequate broadband services. The FCC has begun the task of transforming the Universal Service Fund and InterCarrier Compensation to support expanding broadband infrastructure to rural America. While this is a noble task, it ignores that the U.S. in general lags most of the world in how it delivers broadband. Several years ago I initiated a discussion of broadband that examines three elements, Access, Price and Speed. When viewed objectively, our fragmented approach to providing telecom services leaves rural, suburban and urban America behind all of the developed nations and many developing nations.

Wheeler, if confirmed by the Senate, will face the challenge of addressing the needs of 18 million Americans living in rural areas that require broadband to participate in ever diverse online communities, expand business opportunities and meet educational challenges. However, he will also need to address the other 300 million that continue to pay higher per megabit rates than most of the world and at speeds that are embarrassingly slow. The current FCC definition of broadband is 4 Mbps downstream and 1 Mbps upstream. This was established in 2010 and is insufficient to support today’s video and data demands.

America needs an FCC that is willing and able to address the rapidly changing environment of telecommunications and IP communications. The transition to IP and wireless is affecting the direction of communications, business processes, entertainment and education to a point where most of the rules established by the Communications Act of 1996 are no longer applicable. The FCC faces a considerable number of challenges and I’m hopeful Wheeler is the guy to resolve them.

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The process was fairly straightforward. Meetings had been set up with the staff of various members of congress. I requested and was accepted to join a group from Texas as ANPI has developed a significant presence in the state and I had the opportunity to meet with staff members of my congressional representative, Sam Johnson. I would have preferred meeting with the actual members but given the amount of money NTCA has available for lobbying compared to the larger ILECs, cable companies and wireless carriers this was not unexpected. According to an earlier presentation the amount of money spent by the larger players in our space totaled just over $70 million per year. That is 100 times the amount that NTCA has for the same purpose. It is therefore important for members of the NTCA to take advantage of the opportunity to raise important issues with as many members of congress as possible. Additionally, it is important for us to understand that we must also maintain contact after these meetings. As briefed by an aid to Mitch McConnell, Minority Leader of the Senate, communicating with them only once per year will not be effective in conveying critical needs or affecting the legislative directions.

NTCA represents nearly 900 companies, however, according to the Center for Responsive Politics there were 12,389 lobbyists in 2012 spending an estimated $3.3 billion to influence legislation. Getting the attention we deserve is not easy and much credit should be extended to Shirley Bloomfield, NTCA CEO, for her efforts and the presence she has established.

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The process was fairly straightforward. Meetings had been set up with the staff of various members of congress. I requested and was accepted to join a group from Texas as ANPI has developed a significant presence in the state and I had the opportunity to meet with staff members of my congressional representative, Sam Johnson. I would have preferred meeting with the actual members but given the amount of money NTCA has available for lobbying compared to the larger ILECS, cable companies and wireless carriers this was not unexpected. According to an earlier presentation the amount of money spent by the larger players in our space totaled just over $70 million per year. That is 100 times the amount that NTCA has for the same purpose. It is therefore important for members of the NTCA to take advantage of the opportunity to raise important issues with as many members of congress as possible. Additionally, it is important for us to understand that we must also maintain contact after these meetings. As briefed by an aid to Mitch McConnell, Minority Leader of the Senate, communicating with them only once per year will not be effective in conveying critical needs or affecting the legislative directions.

NTCA represents nearly 900 companies, however, according to the Center for Responsive Politics there were 12,389 lobbyists in 2012 spending an estimated $3.3 billion to influence legislation. Getting the attention we deserve is not easy and much credit should be extended to Shirley Bloomfield, NTCA CEO, for her efforts and the presence she has established.

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The hook for the panel discussion was as follows: “Industry blogs are filled with discussions on cloud services and “big data.” But how do smaller telecommunications companies play in this space? How is this industry evolving? How many data centers are enough? And, what cloud applications can you leverage in your business? Technology experts will answer these questions and more.”

How well we answered the questions can be debated but we did have a lively discussion. We approached cloud computing not from the perspective of features and functionality but by examining the demand, infrastructure requirements and revenue opportunities.

The demand is clear. Revenue for hosted communications and services is growing at 22-35% per year based upon varying sources. SMB interest in a hosted solution is approaching 50% for those considering or expected to implement a hosted offering within the next 18 months. Although, if the definition of cloud computing includes email, accounting software, and online SEO / SEM management tools, I believe the use exceeds 80%.

Infrastructure requirements include geographically distributed servers with fail over capabilities, scalability, ease-of-use with online customer portals for service management, and integration of mobile devices (smartphones, tablets and laptops).

The revenue opportunities are many ranging from web hosting and data storage to a business communications solution utilizing common broadband transport or SIP Trunking.

ANPI will definitely continue to sponsor and participate in this valuable forum.

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1. Establish the goals. Is the campaign to introduce, inform, sell, upsell or nurture? Each of these requires a different message and potentially different audience. An introductory email may be part of a multi-step campaign to discuss a product, value proposition, features, case study and testimonials. Upselling would only go out to existing customers and should be segmented further to only go to those that do not have the new product, add-on or feature. Nurturing campaigns may be primarily focused around follow-up, eNewsletters or company briefings.
2. Compose compelling content. With few exceptions, email content should vary by audience and segment. It is very untargeted to send the same content to all of your customers and prospects. The email should be designed to convey a message quickly providing enough interest to have the reader pursue additional information.
3. Generate an interesting subject line. Email subject lines need to be concise and to the point. Minimize the use of adjectives and articles. Consider the subject line as a summary of the email to follow.
4. Determine the Appropriate Sender. If your sales people have the relationship with your customers, consider sending the email from them. It takes a bit longer to divide the list but with a good CRM, you should only have to do it once and then enforce account assignments there after. If it is more appropriate to send from the company, CEO or others then do so. Just recognize that both the Sender and the subject line are going to be scrutinized prior to the opening of the email.
5. Select an Email Marketing tool. There are several good email marketing tools with each having strengths and weaknesses. ExactTarget, MailChimp, and Constant Contact are fairly well known and popular. A quick evaluation of features, cost and ease-of-use should enable you to select the tool that best fits your business requirements.
6. Develop or find a good source list. Given ANPI’s interest in SIP Trunking, hosted communications, collaboration and such, we are inundated with emails from companies asking us to purchase email lists. I wish I could recommend a specific one but I can’t. There are too many with too a great a diversity of capabilities, accuracy, level of contact, etc. However, I strongly suggest building a list from your customer lists, prospecting activity (email responses, industry shows, form fills, etc), social media presence (blogs, LinkedIn groups) and any contacts interested in your website offers (white papers, case studies, etc).

Effective email marketing is not an accident but it also does not require the planning of a moon launch. SO, get out there and expand your opportunities to increase prospects, revenues, customer loyalty, or all of the above.

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The use of email marketing is widespread with 68% of small businesses listing it as their preferred marketing channel according to Pitney Bowes. I have used email marketing to grow our SIP Trunking sales channel, prospect for hosted communications and upsell to existing customers. But, because it can be difficult and time consuming to collect and analyze the actual impact of an email campaign, others and I haven’t always collected the necessary data to calculate an accurate ROI.

The DMA projects email drove $67.8 billion in sales in 2012 and forecasts $82.2 billion in 2016. According to The Radicati Group the number of registered email accounts reached 3.1 billion in 2011, and is expected to grow by another 1 billion by 2015. That represents an incredible number of potential prospects across a wide range of products and services. Yet, there are plenty of naysayers about the future of email marketing but given the familiarity of the methodology to consumers and its cross platform availability, it will be long time before it is displaced entirely.

It is worth noting that the king of digital marketing continues to be Internet display advertising, which is forecasted by the DMA as driving $186 billion in sales in 2012 and $279.2 billion in 2016.

The conclusion is simple. Businesses regardless of size should use all of the digital marketing avenues available to them. My only hesitation is leveraging social media to support B2B marketing and sales. That does seem to be more relevant in the B2C world and there is nothing wrong with that.

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The leaders in the space continue to be Cisco (44.8%) and Polycom (23%) with Huawei showing strong growth in sales in the Asia and Latin America. Over the last two years Cisco has seen its market share rise while Polycom has seen a decline from its high of 35%.

The value proposition of video conferencing remains. Reduce travel and cut down cost of airfare, lodging and lost productivity. Improve communication and collaboration between organizations and geographically disperse employees. Environmentally, a recent study on human-to-human communication noted that driving an hour to participate in meeting uses the equivalent power consumption of 1000 video conferencing hours. Finally, live, video meetings provide participants much more visual information where facial expressions and body language can be used to better interpret meeting communications.

Video conferencing and telepresence provide other benefits as well and it is the collection of these that will keep video from faltering as it did in the 1990s. Enterprises will continue to expand their implementation of SIP Trunks and IP infrastructures to support telepresence and create special rooms. SMBs will continue to look to application service providers and carriers to build the necessary facilities and tools to support low-end video solutions. As these infrastructures are completed and cost begins to drop, demand will grow. May 2013 be better than 2012.

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1. Google Drive – Google Drive app lets users port and edit files from PC to a tablet to a smartphone. It is a comprehensive office suite and cloud/remote drive. Users can store any file type via a virtual drive app or a web interface.
2. Square - Square is my favorite new way to pay for taxis, yard care and simple services. With it a business owner or employees with a smartphone or tablet can accept credit card payments. The service takes 2.75 percent of each transaction. This app lowers barriers of entry to accept credit cards.
3. inDinero - InDinero tracks business cash flow and manages day-to-day finances. The app syncs up to bank accounts and credit cards reducing data entry. inDinero helps businesses predict future cash flows according to past cash flow trends.
4. Evernote - Evernote is an app that enables users to remember things using a computer, tablet or smartphone. It allows users to create, store, organize and share text, photos, and audio notes. Never forget a great idea again!
5. TripIt – TripIt allows users to create a comprehensive and simple travel itinerary. It allows travelers to keep track of trip arrangements in a single app.
6. Expensfy - Expensify keeps track of business expenses and mileage, and allows users to scan and upload receipts. Users can file receipts by trip and submit expense reports to employers with the click of a button.
7. CamCard - CamCard is a professional business card reader and business card scanner. Users take a picture of a business card. CamCard recognizes/scans the business card and saves the contact information in Card Holder or your Address Book.
8. Dropbox - Dropbox provides 2Gb of cloud-storage to save any documents, photographs and videos. Dropbox will automatically save information to your computers, smartphone and the Dropbox website. You can share them with colleagues by providing access to them via Dropbox. Since Dropbox is a cloud app, files are safe, secure and accessible from anywhere.
9. Skype – With Skype users can make voice and video calls for free with other Skype users. Skype provides free video calls, which can be used to improve communications with remote or traveling workers. It is also a good way to keep in touch with the family when traveling.
10. SignEasy - SignEasy is the simplest and most convenient way for businesses and professionals to legally sign documents from smartphones and tablets. Once the document is signed, SignEasy generates a PDF of the completed document that you can email, print or store. Signatures are easy to resize and can be passcode locked.
11. Flipboard - Flipboard allows users to create their own personal magazine, filled with subjects they care about. News, sports, entertainment, food, technology, politics, etc. are delivered right to a smartphone or tablet. Flipboard combines enjoying information and effortlessly killing time beautifully.

Ok. Eleven apps. 

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As I have pointed out when representing ANPI at various conferences, no single provider dominates the landscape today. Even amongst enterprise customers, 20 service providers were named as vendors of SIP Trunks. And, although this study reflected the opinions of enterprises and medium sized businesses, the information can also be applied to small business.

As small businesses continue to transition from TDM based facilities to IP communications, there are no service providers dominating the space or seen as the market leader. Therefore, it continues to be important to work with a service provider that understands the importance offering a customizable product, simple order process, fast provisioning and implementation, and excellent customer service. It is through this level of differentiation that a competitive advantage can be established leading to market leadership.

The barriers to entry remain the same for all. Most enterprise customers continue to be satisfied with the status quo even though SIP Trunking can represent a reduction in cost and expansion of services and features. Many small business owners either are unaware of less expensive telecommunications alternatives or do not have time to invest in understanding how to secure these new technologies. The second most identified reason for not switching is an existing contract. Many enterprises and SMBs become open to the transition only when they are no longer exposed to early termination fees or cancellation charges.

SIP Trunks and T1 lines will remain the mainstay for broadband for a long time. However, it is good to see SIP Trunking making such gains so quickly. As SIPConnect 1.1 is deployed and interoperability issues are reduced, the adoption of SIP trunks will only increase.

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The media prefers to remind us of two acquisitions that went before the FCC, the successful acquisition by Comcast of NBCUniversal that disappointed reform advocates and the rejection of the purchase of T-Mobile by AT&T that disappointed free market supporters. Some say this was a balanced approached to his manner of decision-making but I prefer to think he and the commission approached the two decisions separately with no effort at providing two disparate groups something about which to cheer.

I choose to look at Genachowski’s tenure by examining FCC decisions that affected the broader scope of our industry. The FCC continued to leave an open path for VoIP to grow offering new opportunities to service providers and improving features and cost savings for customers. The FCC maintained its support for net neutrality albeit with some caveats that will need to be resolved but mostly protecting consumers. And finally, after years of delay and turmoil, the FCC established new rules for USF, ICC and created the Connect America Fund (CAF), which funds the deployment of broadband in underserved or unserved areas.

I don’t support every decision made by the FCC but I do prefer leadership that avoids acrimonious contention and makes sincere efforts to address the major issues for which it is responsible. However, I have some concern with regard to overreach by the FCC in its efforts to manage the direction of an industry so important to our economy and lives.

Obama has not announced who will be his pick for role of Chairman but several names have gained traction in Washington; Tom Wheeler, a venture capitalist and former head of the cable and wireless trade associations; Karen Kornbluh, U.S. ambassador to the Organization for Economic Cooperation and Development; Catherine Sandoval, a member of the California Public Utilities Commission; and Lawrence Strickling, an administration adviser on telecom and technology policy.

I have to learn more about these potential candidates to develop an opinion. My desire is that the chosen individual represent the interest of our nation over those of a given party or political group. That would be a harbinger of good things to come with so many important unresolved and pending decisions remaining. 

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Fred Reichheld introduced a new customer loyalty metric in 2003 called “Net Promoter Score”. Essentially the Net Promoter Score (NPS) is the result of answers to a single question. “How likely are you to recommend product A or service B”? Respondents are asked to rate the likelihood on a scale from 1 to 10. The group responding at 9 or 10 is considered as “promoters” with those at 6 or less called “detractors”. The proportion of promoters minus the proportion of detractors is equal to the NPS. While any result greater than zero is considered as positive, obviously the higher the number the better. 10-15 is considered an average score. However, the debated use of NPS is the inference that companies with scores greater than 15 are likely to grow at a faster rate than the economy. It is this conclusion that has many analysts and consultants criticizing the methodology. Yet, it is clear that the higher the score the more likely the company is achieving significant revenue growth. Apple, Samsung, Harley-Davidson and Google all score greater than 50 and clearly are experiencing market surpassing growth.

After assessing your customer base and discovering 50 percent of your customers are promoters, 15 percent are passives (scoring 7 or 8) and 35 percent are detractors, the business’ NPS would be 15 percent (50-35=15). 

In researching NPS, I gained an appreciation for its simplicity and effectiveness. This is a measure of customer satisfaction and potentially a predictor of the strength of revenue growth that can be easily administered by a small business without the use of expensive consultants or marketing surveys. I certainly think it is worth exploring.

As for the new word, “Phablet” or a smartphone with a screen size of greater than 5 inches and up to whatever someone is willing to hold next to his or her head. All I can say is “Phabulous!”

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Given the proliferation of smartphones and tablets, it is not surprising that mobile devices have altered many business practices and users are now dependent upon the devices.  As the devices become more sophisticated, users move more of their daily functions away from simplistic desk phones and desktop PCs. Paychex released a study last year noting that 85% of small businesses acknowledge using mobile devices to regularly conduct business with 42% of business owners using a smartphone as their primary phone number.

Last week Samsung announced the Samsung 4 and included with the product is the ability to separate personal mobile data from business data. Both Samsung and BlackBerry recognize the need to establish some level of security on BYOD mobile environments. The Samsung security application is called KNOX and the BlackBerry app is called Balance. Both enable the secure separation of corporate and personal information to protect corporate data and applications.

If BYOD access is provided to corporate data and applications, recognize that the user is also bringing any downloaded or purchased applications, malware or viruses. Even iOS from Apple is now a target of malware creators and distributors and requires a plan for protection. In previous blogs I have addressed the need to establish policies governing the use of BYOD and we now need to concern ourselves with BYOA or the applications running on mobile devices.

While there are best practices in developing usage rules and system protections, it is important for each business to look at their unique IT environment to determine what practices to employ. Don’t delay. The rewards of mobile computing are great and all of us want the increased productivity, flexibility and access without the preventable risk. One quick piece of advice, while developing your BYOD governance, make sure that your BYOD users run the most recent versions of the device operating system. These are usually the most secure and address any recently identified risks.

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Call completion practices into rural areas have been suspect for some time as callers complain about false busy signals, long hold times of dead air, no ringing on distant end and poor voice quality. The effect has been to cause businesses to lose customers, families to miss important information and create potentially dangerous situations affecting the public good.

As FCC Chairman Julius Genachowski accurately points out, “When calls to American in rural communities aren’t reliably completed, the consequences are both life-threatening and damaging economically.”

Level 3 has agreed to complete calls to rural ILECs at a rate within 5% of that in non-rural areas over a two-year period. Furthermore, they have agreed to document and report quarterly the level of compliance towards that benchmark beginning in January 2014. If they are unable to meet the benchmark, Level 3 has also agreed to make another  $1,000,000 voluntary contribution to the treasury department.

Previously, the FCC has stated that carriers who deliberately fail to complete calls to rural areas could “face cease and desist orders, forfeiture, license revocations and fines of up to $1.5 million.”

On February 4, 2013 the FCC released a Notice of Proposed Rule Making covering rural call completion in response to ongoing complaints by rural ILECs and telecom associations.  The NPRM reported “…rural associations state that 80 percent of rural carriers responding to one survey reported problems, and rural customer reports of problems receiving calls increased by more than 2000% in the twelve-month period from April 2010 to March 2011.”

The announcement of the agreement between the FCC and Level 3 occurred during COMPTEL and became a topic of discussion.  For various reasons carriers have used less than stellar means to complete calls to rural areas, and many see themselves in the cross hairs of the FCC if they do not improve their long distance and fax call completion practices to rural areas. This means removing the number of intermediate carriers, improving the quality of intermediate carriers and discontinuing any deceptive practices.

ANPI conducted a webinar Call Completion – A Crucial Issue with participation by Robert Gnapp, NECA Industry Relations, Michael Romano, NTCA, Dave Lewis, ANPI CEO and Andy Brown, ANPI Industry Relations. It remains very applicable to this discussion.

In time the issue of call completion will go away as the FCC accomplishes the reform of InterCarrier Compensation. Until then, it is good to know that they are remaining vigilant for rural Americans. 

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What follows is a preview of my discussion regarding Hosted Communications. In its simplest sense, hosted communications is a business phone system in the cloud providing a set of the most used PBX features. At its most complex, it is Unified Communications (UC), Unified Messaging with collaboration tools and applications supporting video and mobility across smartphones, tablets and other wireless devices. However, I want to provide the latest market data to explain why it is time to add Hosted Communications to your product portfolio.

Hosted communications and cloud computing is experiencing enormous demand. The demand has expanded beyond SMBs to include many enterprise customers. Infonetics release information indicating the demand grew for the number of hosted seats or users by 22% in 2011. Moreover, hosted business VoIP and UC is expected to see the number of installed seats double in just 4 years from 2012 through 2016. This rapid and broad demand provides you the opportunity to sell to your existing customer base and improve your ability to acquire new customers. There is no market leader and the unserved market is greater than 4 million businesses.

Infonetics estimates $377 billion will be spent on VoIP and UC services from 2013 through 2017. This amount of new potential revenue and margins ranging from 35% to 60% should garner any businesses attention, but given the changes in our industry with falling prices for voice services and transport, finding a complementary product offering with strong margins is very appealing. And it is not just Infonetics painting such a rosy picture for hosted communications. The Radicati Group sees the market for hosted UC alone growing from $2.8 billion in 2010 to $5.5B in 2014.

It is not often that we are provided notice of a market with this much potential where the barriers to entry are low, there is no set market leader and we are still in the early adopter phase of the market adoption life cycle curve.

ANPI announced today our private/white label Hosted Solution for ILECs and service providers. The ANPI Hosted Solution includes Hosted Communications and Hosted Services or IT oriented products.

See you on Thursday with more from COMPTEL.

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