December 2008 Archives

Following this story and my own, a couple of master agents called me to get an opinion on the viability of Level3 and if I thought that they would file BK. My response was that I didn't think it was likely and that L3 has been leaning on the Channel to bring in more revenue every year. But I pinged some people I know and this showed up in my inbox: A press release from Standard & Poor's.

Standard & Poor's Ratings Service said today it lowered its issue rating on Broomfield Colo.-based Level 3 Communications Inc.'s 6% convertible subordinated notes due 2009 to 'D' from 'C'. At the same time, we removed the ratings from CreditWatch with negative implications, where they were placed on Nov. 18, 2008, following the announcement of below-par tender offers for three convertible debt issues maturing in 2009 and 2010. This rating action follows the Dec. 30, 2008, completion of the tender offer for the 2009 notes which Standard & Poor's viewed as distressed, and, as such, tantamount to default. .... The corporate credit rating on Level 3 Communications Inc. which was lowered on Dec. 29, 2008, following the completion of tender offers for two note issues maturing in 2010, remains at 'SD' (selective default). The issue ratings on all other debt issued by Level 3 Communications and its wholly owned subsidiary, Level 3 Financing Inc., remain on CreditWatch with negative implications, pending our assessment of pro forma recovery prospects for each issue. ... "Now that all tender offers are complete, we expect to raise Level 3's corporate credit rating to 'B-' with a stable outlook and resolve the CreditWatch for all issue ratings in the very near term," said Standard & Poor's credit analyst Susan Madison.

From the full release, see Paragraph 5:

"We expect to raise Level 3's corporate credit rating to 'B-' with a stable outlook once all the tender transactions have been completed. At that point we would also raise issue-level ratings on debt that remains outstanding for the three tendered issues based on their respective recovery prospects."

Now get out there and sell something! Happy New Year!

Rocky Mountain News reports that Level3 "remains unprofitable, mired in more than $6 billion in debt, and shares have fallen to less than 70 cents. Ordinarily, Level 3 stock would be delisted, but Nasdaq has suspended the $1 minimum requirement until April 9 because of the country's economic turmoil."  With revenues flat, L3 is looking to give itself time to repay all of its debt to forego bankruptcy.

Fox and MarketWatch reported that "Level 3 Communications Inc. had its corporate credit rating cut to SD, or selective default, from CC by Standard & Poor's. S&P also lowered ratings on Level 3's convertible subordinated notes due 2010 to D from C."  In addition, Level3 changed its stock buy back plan -- and is having trouble getting takers. According to Denver Business Journal, "Level 3 is trying to push out repayment of about $1.14 billion of investor-held debt coming due in the next two years -- $305 million in 2009, $836 million in 2010 ­-- to preserve its liquidity in the face of flattening revenue. .... The company had committed to spend as much as $438 million of its cash to buy back some of the 2009 and 2010 notes. It planned to fund the rest of the debt buyback by selling debt notes that mature in 2013 and yield 15 percent interest annually."

 

MSP Partners, an alliance founded by Cisco, Ingram Micro, Intel, Level Platforms and Microsoft, and supported by Autotask Corporation, EMC, HP, Kaseya and Xerox, with the active participation of over 15 other leading IT vendors, and thousands of solution providers offering managed services today announced a cooperative agreement with The ASCII Group, Inc. (ASCII), North America's oldest and most established community of independent computer integrators, solution providers and resellers. The agreement allows members of MSP Partner and ASCII to expanded access to the many benefits offered by these two major IT industry groups.

MSP Partners, with a membership base of over 3000 solution providers, provides independent vendor-supported education for solution providers delivering managed services. Their comprehensive program includes the latest market research and education, valuable insight by means of solution provider success stories, and collaborative vendor solutions, all demonstrating a path to success in managed services.

"This membership agreement brings the longstanding relationship between MSP Partners and The ASCII Group to the next level, offering a wide range of new resources to our combined membership." said Jim Hamilton, Executive Director of MSP Partners.

The agreement offers a discount for MSP Partners' members to join the ASCII Group while new ASCII Group members will receive a complimentary membership to MSP Partners. The reciprocal membership agreement includes full access to the benefits offered within each program. The agreement also outlines special member privileges to mutually sponsored events.

Jerry Koutavas, Vice President of Business Development for The ASCII Group, stated, "The additional resources and benefits both parties will gain through this important alliance will only strengthen each of our efforts in helping resellers proactively move towards a profitable MSP model."

Alan Weinberger, Chairman and CEO of ASCII, stated: "Since 1984, we have helped many thousands of solution providers increase their profitability with new programs and services, leveraging the buying and selling power of the independent computer solution provider. Our new alliance with MSP Partners extends that mission with new synergies developed for the 21^st century between our two organizations, for the exclusive benefit of the independent solution provider."

Re-printed from here.

In similar VAR news, Ingram Micro has created New SMBA Peer Groups to give Solution Providers and Vendors a business advantage. But  Al Siena at ITChannelPlanet thinks, "On paper I guess this sounds like a good idea, but the truth is, in practice VARs aren't too big on sharing, especially if it involves something that distinguishes them from the rest of the channel competition." We'll wait to see how it works out. Best Practices and a Code of Business Ethics is something that VAR's should be able to work on in these Peer Groups, like they do in the TCA.

<p><a href="http://www.bablotech.com/2008/12/29/5-best-free-voip-phone-softwares/">Blabotech has a list of 5 VoIP soft-phones No-Charge</a>! X-Lite, 3CX, Express Talk, iaxComm, and Ekiga </p>

It seems that as 2008 comes to a spiraling end, everyone is giving business advice. If you run a small business, here's some of it:

• No Recession from Us has a bunch of links.
• Duct Tape Marketing has some thoughts from thought leaders.
• Caruso on Embracing the Internet
• Doug Sundheim with Showing Up advice
• Predictions for 2009
• Advice from SCORE
• Tips for Web companies from ReadWriteWeb (directed at companies, but solid advice for all)

Other Best Of lists for Business books in 2008:

• Fast Company
• John Moore at Brand Autopsy
• 800-CEO-READ
• Reuters list

I vote for you reading Seth's best blog posts.  And my own thoughts for businesses in 2009 is: Differentiate and Sell. Not be everything to everyone. Be Unique and actually sell services. Especially in 2009, although I have elected not to participate in the recession at all.

Today BroadSoft announced we have acquired Sylantro Systems Corporation. As one of our most formidable competitors of the last ten years, we have both succeeded in delivering high-quality products and superior customer satisfaction.

We believe the Sylantro acquisition is a tremendous opportunity that will allow us to continue our tradition of developing comprehensive solutions for hosted telephony and multimedia services. We will retain Sylantro's Synergy Multiplay Application Feature Server platform, and will begin to immediately integrate Sylantro's development team into our current engineering organization. We also have plans to actively incorporate Sylantro's Synapps Web 2.0 initiatives with our Xtended program.

Over the past several years, BroadSoft has established itself as the VoIP platform of choice through our unwavering focus on serving our customer needs. We look forward to continuing to work with you to deliver industry leading VoIP application services.

Should you have any immediate questions about this transaction, please feel free to contact me. In the meantime, I look forward to continuing our strategic collaboration.

Sincerely,

Ken Rokoff
VP of Business Development

Rapid Link, Inc. opens a 3000 square foot data center north of Atlanta at Spaghetti Junction in Doraville, GA.  Rapid Link's data center will have access via fiber and wireless.The first customers will be moving into the space in January, 2009.

If you are a telecom agent looking to sell collocation, Rapid Link is looking for you. please contact Kris Maher, Director of National Sales, at 800-363-3435

I am on quite a few committees that meet mainly by email and the occasional  conference call. Neither email nor conference call are highly effective collaboration tools for an ongoing committee. So I have been looking at other ways to work.

One idea that comes up is Yahoo! Groups (and Google Groups). It's basically email but with the message archive. It also has a file upload area; polling; and who's online. But you have to register (using a Y! account).

I have had a cursory look at Stixy. It has notes and to-do lists, which makes it like a wiki only better. (Most committees I work with don't like wikis and have tried to use Google docs instead). We may try this one.

Another one that looks good is Genius Room.  It has a good review here.

If you have other ideas, please let me know. Thanks!

FierceVoIP has been writing for 2 days about Broadsoft buying Sylantro. A couple of ITSP CTO's are confirming that purchase as well. It's a great customer acquisition move for Broadsoft in a market that is flat. (There are thousands of "VOIP Providers" but not many that are at scale). Word is that the last cash investment was earmarked for this purchase.

BTW, Doug Mohney has some create speculation about the next-generation network space here.

The Technology Channel Association, a non-profit trade association for indirect sales agents, has hired CMA Association Management to run the day-to-day functions of the association.. This announcement coincides with the launch of the Agent Committee, consisting of Emmett Tydings of AB&T Telecom; Dave Wallace of Aligned Communications; Ben Henkels of CMP; Mark Adams of Total Business Solutions Communication; and Jeff Ott of Total Carrier Solutions. TCA is working on benefits for its members possibly health insurance. Join today at tcasite.org.

If you are on LinkedIn, there is a Technology Channel Association group for members only.

Qwest decreased the compensation to its channel program by about 10%, which one master agent said was "bad, but it could have been a lot worse." The big kicker is the provision that agents can no longer get paid for renewing contracts, unless they were the original agent. That destroys some call center based agents, who will now be looking to flip that database to other carriers.  Meanwhile, SkyWi sues Qwest for racketeering.

FreedomVoice is still awaiting approval from Apple on their Newber app for the iPhone, a location based  there's a counter on MyNewber.com. DS Media is also still waiting for its approval. (I noticed that DS Media's front web page changed to Coming Soon. DS Media was a sponsor of BarCampTampaBay).

What's up with Apple any way? Like the company deciding they will not be attending MacWorld (or any other big conferences) starting in 2009.

Why tidbits?  There is just SOOO much going on right now that I can not keep up.

You probably read about all the telecom layoffs, right? Especially the 12,000 that AT&T let go. But PAETEC and Level3 also had layoffs of 222 and 450 respectively.  Some of the cuts came from the Indirect channel. Most noteworthy is that Level3 hired a new COO, which kind of confirms the story that Neil Hobbs was let go. Neil was EVP of Operations.

There was a blunder in the WSJ about Google and Net Neutrality. When I get time, I will elaborate, but a content provider using its own CDN is different than AT&T and VZB - network owners - create there very own CDN's.

Aastra is in Tampa this week for an executive meeting as they roll out a new line of phones: the 9143i! Can't wait!

I was a panelist on Geekazine on Ustream.tv on Monday night at 7 PM Eastern (12/15/08) to discuss tech news like Google and Net Neutrality, the new Palm OS, and blunders in IT asset security.

This website is now on ALLTOP!  

Are your deals feeling the heat of the credit crunch?  Let me know email me at rad_info2003 at yahoo.

On Twitter this morning, someone asked about the Cluetrain Manifesto. (I had to look at Wikipedia to remember what the main points were). The Internet will change every business.  "The authors assert that the Internet is unlike the ordinary media used in mass marketing as it enables people to have "human to human" conversations, which have the potential to transform traditional business practices radically."  We see that happening in quite a few verticals. It has changed the newspaper, music, entertainment, retail shopping, and telecom industries. It will likely change even more.

"The clue train stopped there four times a day for ten years and they never took delivery."  Certainly, this quote applies to 3 Detroit CEO's.

This has been a busy networking week. Business Buddies holiday party, AMA Tampa Bay Luncheon, and the Tampa Bay CEO Awards dinner last night. The emcee for the event, Brent Britton, is an interesting guy, a lawyer from MIT in Tampa via Silcon Valley. Another person of interest was a finalist for a CEO Award. She worked on Obama's campaign doing online marketing. She writes for Huffington Post. You just never know who you will run into.

The problem I have with it is how so many intriguing people can live in Tampa Bay - and no one knows it!  So a couple of us are on a mission to cross-pollinate the creatives in town with the techie/geeks in the Tampa Bay area. Find all the hidden gems in Tampa Bay. It started with BarCampTampaBay in October and will continue with Lunch 2.0, maybe Jelly, Dev/Design, some other stuff and culminate at BarCampTampaBay in Sept./Oct.