March 2009 Archives

So social media expert, Chris Brogan, blogs about Michael Goodspeed being wronged by YouTube. Since Google owns YouTube, this is the beginning of Google becomes the Evil Empire.  I've been watching this happen for a while. When GrandCentral was upgrading to Googel Voice in waves it was a bitchfest on Twitter because people had to wait. *gasp*. They had to wait like 10 days to get access to an upgrade to a free service. WTH?

I just don't understand the issue with entitlement in this world.

It's like the people who have sued Google when Google makes changes to its algorithms, causing their business to fall off. Or when Google started charging for Google Apps and Gmail for businesses. People were not  happy. (What will they do when Google Voice comes off Beta and has a price tag? Voice has a cost).

I now understand why businesses fail: lack of common sense; lack of business sense; no knowledge of business or contract law; and entitlement.

Google, YouTube, Flickr, Yahoo! Mail, Hotmail, Twitter, and Facebook are free to use. If your account gets deleted like Goodspeed's did, it is a bad day. You have back ups, right? But is Google evil because the account was deleted? I don't think so.

If you base your business on a free software platform and that company changes something, you better have plan B. What if the government decides to take ARPANet back for government use only? Or Net Neutrality policy fails so that you only get content form your ISP?  No more INternet as we no it. What then? You better have a Plan B.

I understand that Goodspeed is upset his account was suspended, but it happened on Thursday, March 26th. It's only the 31st. Google isn't set up for customer support to consumers on its free services.

And he forewarned people that this could happen. How did he know?

When twitter is slow, people complain all day. There's a Facebook group titled I will not pay to use Facebook - Keep it free. I just don't understand the mentality. It costs big dollars to provide these platforms and keep them running. And to do it for free is unheard of until the Internet came along. It's the Generation of Entitlement - and it is annoying. No one owes you anything.

When Sprint chose Dan Hesse to be CEO in 2007, I was against it. He was a Bell-head who had huge opportunity at Embarq that he wasted. What do I mean? Sprint announced its intention to spin-off its wireline business into a separate company at the end of 2005. Dan Hesse was named CEO a full five months before Embarq was formed in May of 2006. Plus any new CEO has 4 to 6 months of a honeymoon period. Hesse had at least 9 months to come up with a plan to do something with Embarq, and did nothing. He cost cut, laid people off, and litigated with the pensioners. That's wonderful.

Then Sprint gets into trouble and brings Hesse  back as CEO of Sprint-Nextel. WHAT? So he lays off tons of folks. Maybe cuts some costs, but does NOTHING remarkable. In fact, since Hesse became Sprint's leader in late 2007, the company has gone on to lose 4.6M customers.

Did Sprint get the iPhone? No. The Android phone? No. Any new and exciting handset? No. WHy not? Handsets drive sales in mobility.

Do people realize that Sprint still has a fiber network? Not even the folks at Sprint can talk about their MPLS or IP offerings for more than 22 minutes without jumping back to the not-so-shiny gadgets.

Remember when Sprint used to try stuff? The pin-drop ads because they had the first all fiber network. The failed ION project. But still they tried.

Now we see that Hesse raked in $15.5M in compensation in 2008. Let's recap:

• stock lost 70% of its value in 2008
• company wrote off billions
• lost $2.8B
• people thought it would go into bankruptcy.
• CEO gets $2.6M bonus on top of his $1.2M salary

This is what's wrong with Corporate America and the Boards of Directors! You wonder why Main Street is fed up. Why consumers don't want to feed the beast any more. Why would I want to spend any more money with Sprint if its all going into the CEO's pocket? And I have to assume that the Directors and other Executives also pocketed some healthy bonus money as well. What a joke.

Ars technica doesn't believe the articles in CNET and AOL-Tech about people switching back to dial-up. Well, info from dial-up aggregators indicate that dial-up is on the uptick. As some angry comments mention not everyone needs broadband.

Last year we saw the plateau of broadband subscriber numbers. This year we are seeing an increase in dial-up maybe due to the economic situation we face in the US. Certainly, AOL, Earthlink and United Online are showing revenue increases in their financial statements.

If there was a 10% drop of broadband, would that affect VoIP? Unlikely. It would affect Vonage and 8x8 and other stand-alone VoIP players, but it wouldn't have any effect on the Business VoIP businesses nor on SAAS.

Also, bundling means that the consumer probably doesn't know the pricing of the high speed internet component.

Certainly this has to be a consideration for the RUS and NTIA. What if everyone who wants to live online has broadband? What if the $7B results in just a 10% increase in broadband? Will that justify the $7B? Maybe. If the 10% are all business ventures of one kind or another - eBay, Amazon, affiliates, SOHO, freelancers, tele-workers. 

The Obama Administration has nominated Larry Strickling to head the NTIA. Right now former Sprint exec, Anna Gomez, is running that department as it gets ready to disperse $4.7B in broadband stimulus money. We don't have a set plan or any procedures in place yet, but picking Larry Strickling should help. Or will it?

Granted picking someone from Sprint probably was a great choice either. (Sprint isn't exactly knocking any socks off). Larry was on Obama's team as a tech advisor. He's a Harvard grad and worked at the FCC up till 2000. According to BroadcastingCable, "Strickling's resume includes Ameritech (now AT&T), Allegiance Telecom (now XO), CoreExpress (sold to Williams, which was bought by Level3), Network Plus, and he was a partner in the firm of Kirkland and Ellis." He also was Chief Compliance Officer at Broadwing Communications for three years also. Am I missing something? He's an attorney. We need more than that.

The head of the NTIA has to interface with the FCC and the USDA/RUS. And by August 1, 2009, start disbursing one-third of the funds under the Broadband Stimulus Plan. There needs to be policies and procedures and guidelines put into place so that (a) the money will actually go to broadband deployment soon; (b) the money can be tracked to ensure that it actually goes for broadband deployment.

The ILEC's have a long history of taking money (and rate hikes) for promises they do not keep. These same companies bought up spectrum and did NOTHING with it. (I hear that Sprint and/or Clearwire are actually looking to sell some spectrum, as is NextWave and Nextlink). So why would we expect these companies to actually deploy broadband in a timely manner now?

Also, this is supposed to be a Stimulus package. Not a help out your Corporate buddy deal. We have had enough of those already. And these companies have laid off by the thousands (Layoff Tracker).

What America needs is for small businesses to get this money.

I don't see how picking another pal of Obama is going to do that. One of the most disappointing things about this new Administration is the lack of creative choices for positions. If people have been there, they have done that. And we don't need THAT. We need a new THIS. Got it? (The people who brought you here, won't get you there).  Where are the round tables of experts to come up with the best plan? We did see the FCC/RUS/NTIA take to the road, but those meetings certainly centered on one or two niche markets. 

Here's my take on the companies that CAN do deploy Broadband across America: Independent ISP's. Guidelines to include:

• ISP's that are already supplying broadband to rural and non-urban areas.
• ISP's that have filled out the FCC Form 477.
• ISP's with at least 8 employees
• ISP's that are Incorporated.
• ISP's with a credit line or extensive credit history.
• ISP's that have a CPA firm.

Why? Because tracking is this money will be a full time job and if you haven't got at least 8 employees and a CPA firm, you probably will fall behind. (And I don't visit clients in jail). The 20% match means you have to have a credit line or be cash flow positive.  This also means that your ISP is a business, not a hobby, that you have been working it as a business for a while and likely will be successful in this new endeavor.

BTW, the Chicago Sun-Times describes Larry's job as Assistant Secretary for Communications and Information at the Department of Commerce. Turns out that is the NTIA. Oops.

On Twitter this morning, Josh wrote, "Widely discussed leaked doc, Open Cloud Manifesto, originally authored by IBM - http://bit.ly/cloudmanifesto - could be historic".

"The buzz around cloud computing has reached a fever pitch. Some believe it is a disruptive trend representing the next stage in the evolution of the internet. Others believe it is hype, as it uses long established computing technologies. As with any new trend in the IT world, organizations must figure out the benefits and risks of cloud computing and the best way to use this technology."

Everyone knows the upside to Cloud Computing, but the document explains the downside. Number 1 being Security. Compliance isn't listed, but I would think that it might be an issue, especially if security, management and governance are an issue.

IBM signs off by stating, "This document is meant to begin the conversation, not define it." More at www.opencloudmanifesto.org

VoiceCon is in Orlando this week. I will be driving over on April 1 on my way to another conference in Deerfield Beach.

Next week, I will be in New Orleans for WordCamp, a conference for Wordpress bloggers. I have clients in the area, so I am looking forward to seeing them and meeting Chris Schultz in person. That guy is doing a lot of good things in NOLA.

Then April 22-24 I am in Dallas for a CEO Summit.

If you are in the area, let's meet up. Call me on GrandCentral/GoogleVoice at (786) 228-7039 or send me a tweet @radinfo.

John Todd is an Asterisk evangelist and works for Digium. VoIP Users Conference reposted John's 7 steps to better SIP Security on Asterik (here). The reason for the 7 steps now?

"In the last few months, a number of new tools have made it easy for knuckle-draggers to attack and defraud SIP endpoints, Asterisk-based systems included. There are easily-available tools that scan networks looking for SIP hosts, and then scan hosts looking for valid extensions, and then scan valid extensions looking for passwords. You can take steps, NOW, to eliminate many of these problems."

It's not just Asterisk either. There are holes in every PBX and softswitch. There is long distance fraud, especially in International calling. You should be checking your CDR's at least daily - or run a script to pick up anomalies.

Security in entirety will become extremely important this year. New tools; a tanking world economy; criminals will be looking for every lever to make money or get something free.  So will disgruntled employees, so network admins need to be on top of any changes in human resources.

Amid phone calls with agents who are in a struggle over commission payments with carriers, I have been speaking with finance companies about telecom stocks. Lots of debt out there. Not really enough revenue to cover most debt.

The other problem I see is the operational issues that most telecom companies face. Just getting a quote out of most these companies is an ordeal. And the pricing is anything but standard. Two agents and a Direct will likely produce 3 separate quoted rates. WTH? And that's just to get a quote. Generating a contract, especially from the Death Star, can take up to 10 business days!!

One other discrepancy is that agent paperwork is usually more than a direct sales drones. We have to add a Letter of Agency (LOA), at the least, to show our permission to act on the client's behalf. We also usually have other paperwork - like credit applications - that directs get to skip. Why? No idea, but I have seen enough of it over the years.

So now we get the quote and the contracts. As the agent we explain why we need the LOA and that we won't be taking the client for a ride. We are the trusted advisor, right? Now with signatures and a mountain of paperwork, we submit the order. That's fun too. The order site crashes and saves no work. Start over. The email address doesn't auto-respond with a tracking number. (Re-submit. Re-submit. Call. UGH!)

Then we wait to hear if the order was accepted. Likely something on the paperwork will slow it up. Get that fixed requires being tricky or returning to the customer to explain how we missed a page or a signature or something. When we finally get a FOC date, we are half way there!

Last Ma Bell Internet T1 order, after the FOC date, no install because of address mismatch - over a suite number! One telco closet for the whole building and the address was the same as a DSL circuit and 3 phone lines that the RBOC was already billing to the disputed address.

In cases of fiber, there is usually customer premise make-read work to do. Likely, someone will be told what that work is but not any of the contacts on the paperwork. Even in the case of T1, conduit and other inside wiring issues could delay things.

So now we have the circuit installed. Just have to get it turned up. Tele-installs are great. One person reading from a script talking to the office manager. Eventually it works out.

My advice now is No Managed Router! Ma Bell has resorted to email only to make config changes on the router. No phone to call. One time the tech was in Raleigh. The second it was Singapore. Just to get NAT and DHCP turned on and the SIP phones to work.

The time versus compensation meter is tilting upside down. With rates sliding downward on every telecom service, commissions have too, which means agents are working harder in a broken system to make less money. And that's if you don't have any commission issues with the carrier, which every agent has. It's telecom for gosh sakes. Of course, there is commission errors. Billing errors too.  How did it get this broken?

I'm in Orlando today speaking all morning, starting with CLEC Therapy III. I have moderated three other CLEC sessions that discussed such things as collocation, gear, and technical details. Today, we will be pulling 2 ISP's out of the audience to give them a makeover. In other words, we will sketch what they do versus what they should do.

• Why become a CLEC?
• What is the process to become a CLEC?
• What are you going to offer?
• Who will you target?
• Is there enough margin?
• DIY or Outsource?
• Other streams of Income
• How will you Market it?

After that 2 hours, I will be moderating a panel of ITSP's on How to Sell VoIP. We will examine the sales process to sell VoIP to a small business with 15 handsets. It's one thing to take the step to offer VoIP services to your marketplace; it's another thing to actually know how to sell it. And it won't sell itself. If it did Vonage and SunRocket is all I'm saying - and I wouldn't be seeing MagicJack infomercials all over the television.

Did you know that as an agent you can broker energy? Paetec is plugging agents into the energy business - after it purchased an energy broker. I know a couple of agents that have been in the energy business for a while. I don't think it can replace its telecom business.

In other energy news, the telecom companies are also looking to get into energy management in the way of the smart home. Most homes do not have the equipment necessary installed in their homes to take advantage of this service. Likely, this will change as time goes on. It allows the telecom connection to the home be more productive. At the end of the day, people aren't buying telecom - they are buying a communication device or a platform for productivity or entertainment or knowledge or whatever. That's what telecom companies need to keep in mind.

Telecom Ramblings pointed out that Paetec owns a fixed wireless operations. According to the Paetec 2Q08 earnings transcript:

"we acquired MPX Wireless towards the end of 2007. They were a Rochester based company that we had done several private projects with for alternative last mile wireless access. And, one of the things that we have initiated here is a network grooming project, where we are looking at multi- tenant facilities where we have multiple PAETEC customers that have multiple T1s, where we could go in on a cost effective basis. We can provide a wireless last mile alternative to provide our customers with business continuity, disaster recovery and lower cost access into PAETEC. And that's something that we have identified several buildings we will be looking to complete in 2007 as kind of our first beta trial. And if we are able to upsell into those buildings, I think you will see us use that as a more aggressive strategy in 2009."  [from 2Q08 transcript on Seeking Alpha]

Now Paetec is going to expand that service so that they can continue to offer a wireline/wireless business continuity package.

PAETEC's Fixed Wireless uses carrier-grade microwave equipment and consultative engineering to build reliable 'last-mile' access loops between a customer network and a local PAETEC point of presence. Wireless local loops can be provisioned at DS-3, OC-3, Fast Ethernet and Gigabit Ethernet speeds, and support the complete range of voice and IP services in the PAETEC portfolio. ....The Fixed Wireless Transport solution plays an important role in PAETEC's robust Disaster Recovery and Business Continuity suite of services. By provisioning a wireless local loop, PAETEC can offer a customer complete physical infrastructure diversity within a market including termination to an alternate PAETEC Central Office. [Yahoo]

Paetec might be thinking about expanding fixed wireless because the government is giving away funds for rural broadband solutions.

A quick aside. Today is the 12 for 12k social media drive to raise $12,000 for Child Hunger.  Donate  USD 12 and get entered into a raffle to win prizes all day. 

You can follow the drive by following Scott on Twitter. If you donate $120, Scott will give you a website review. (I've seen many of your sites, take advantage of this deal!

I'm going to add to it: if you donate $24, leave a comment or tweet me or email me and I will give you my e-book on SELLECOM.

The first three who donate $36 and leave a comment or tweet me or email me  will get a signed hard copy of the book. (Just email me the receipt so I have a mailing address).

At the Channel Partners Expo, on individual calls with agents, and on a conference call with a bunch of agents today, I noticed something big: the Channel is shifting.

I have known for a while that VAR's would replace the traditional telecom dialing-for-dollars, save-you-10% agents. It's coming because sales cycles are longer; the product set is very different; and it's all about IP and Apps. (Net-head versus Bell-head).

There's another shift happening: agents are banding together every way they can to get leverage against the carriers, who hold too much power. It started bubbling  in 2007 with my post called What's a Partner Worth? In the 2 years since that post, there hasn't been much change on the carrier side.

Agents first started bonding together as Master Agents. Then came the experiment called the Agent Alliance - a group of master agents banding together for group buying. I guess its a master master agency. None of those entities speaks for the agents.

"There is a serious disconnect between many agents and their suppliers on the expectations they have for each other in developing a mutually beneficial partnership," says PHONE+ Editor Khali Henderson. "Some of this may be a failure to recognize the changing dynamics in the telecom industry and their impacts on the participants in the value chain. Starting a formal dialog in the industry may help to overcome these gaps in understanding."

The dialog today starts when commissions aren't paid. You look at the situation for agents with MCI when Verizon bought them and changed the MCI Agent contract. Over 100 agents got screwed out of commission because the new contract was unfavorable or untenable. It happened with Cable & Wireless. Many mergers have had similar results for agents. 

I will have to say that most of these issues are contract related. The quotas and other issues are spelled out in the contract - IF you read and understand the fine print. If you use a Master Agent, you don't even get to see the fine print, because this Industry loves the NDA (non-disclosure agreement). It's why agents can't get a fair shake - they have no idea what is availble to negotiate. Cisco just lost in court with the judge declaring that Cisco's partner agreement was unconscionable, meaning that the contract is too one-sided. I think that if that precendent stands, agents will have a leg up.

I've been on the receiving end of a carrier (BellSouth) taking away a boatload of hard earned commissions, so I understand the frustration. (After 5 years, therapy, anger management classes, blogging and drinking, I can almost move past it). But at the end of the day, what band of agents has $1M to hire an attorney to fight a carrier over a contract dispute? That's what it would take. About $1M and a long time (7 years). What do you do in the mean time?

Not to be mean, but the industry is almost tipping over with bad debt, rising costs of goods, lower margins, and, let's face it, failing strategies. By that I mean, how many carriers have a solid long-term strategy?

[I deleted my FiOS is a losing strategy rant here]

Let's just say that I look at many CLEC's who are so obviously selling underwater that I want to take a SCUBA test. And it isn't just the Channel - the direct side is drowning in there too. In fact, the direct side is usually the one that starts the price war against the agent side. And where are the policies and guidelines in place for that Not to Occur?

Some carriers (like the ones on Moody's Death Watch list) may not be around in a year, so agents need to watch that to.  Agents need to be aware of how inter-connected the whole CLEC and Reseller market is. Reseller A buys from Carrier V and Reseller B and D, who buys from Carrier Q and Reseller A and D. When one collapses (like Alphared did recently), it cripples the rest. And there isn't enough margin - room - for that kind of error.

At the end of the day, the agents need to band together - to do more than swap tales of woe and vent - and that's why a bunch of us have put in many hours in the last year to create the Technology Channel Association. Join now! It's free through the end of March for agents and we offer group health insurance for our members.

This morning on Twitter, it was announced that Hosted VoIP company, Acredo, had laid off all its staff. Acredo is the second Hosted PBX player in Orlando to axe its staff in the past few weeks. VOX also laid off most of its staff, while waiting for a big deal to close, which is supposed to be its savior.

We are entering the time when there will be a parring down of the 1000+ companies offering VoIP. The majority of users have migrated to cable digital voice service due mainly to the bundle, the price, the Quality of Service, the name brand, and the large advertising campaigns.

Acredo was Avaya based and not inexpensive. I have no further details about the company.

VOX had over 100 partners reselling their service including NCTA, WISPA and FISPA members. Most notably Junction Broadband was a reseller. The deal with UTGI was supposed to be the saving grace for VOX. The funding partners decided that they couldn't pour more money in while they waited to land the UTGI deal.

Certainly, we will be seeing more of this as VC and hedge funds have been hit by the financial crisis too and cannot continue to fund companies that have not hit a revenue and cash flow stance.

An UPDATE on this story: see Rich Tehrani's update. Acredo is in re-organization - not closed.

A correction: the VOX reseller is Junction Broadband, not Junction Networks as I wrote yesterday. (Please note that the linked press release clearly stated Junction Broadband.) I apologize for the typo.

Software-as-a-service (SAAS) is the new buzz in 2009. Salesforce.com hit a $1B in sales so its the poster child. Google is the other golden child of SAAS pushing is Apps and Gmail to businesses. For me, even hosted email is SAAS.

I am a referral agent for IKANO who is a Google Apps aggregator. , I am having trouble selling service providers on moving to Gmail and Apps. The overall ROI certainly makes the migration appealing, when you take into account Postini anti-spam licensing, server lease, power consumption, collocation space, email server licensing costs, maintenance and support. Seems like the ROI would make it a slamdunk but it is not.

Top 3 Reasons its hard to sell Google Apps:

1. FOG
2. Control
3. Change

FOG is fear of Google. For ISP's, Google is a competitor. Not really, but techies seem to find bogeymen behind every door. Which leads to reason two: Control. Techies have to be able to see the box (server). I call it humping the box. But the service providers have to have total control over the server or they can't sleep at night. Afterall, they are techies, who can run a server better than them? However, if you want to make the transition from techie to businessman, you make decisions based on what is best long-term.  Hey, Nuvox moved to Google Apps - and uses it to get appointments by telling every prospect: "We are partnered with Google. Can we meet to talk about that?" Appointments up 25%.

And finally the change thing. No likes change, especially when we have so much going on around us. It's the same reason that businesses are taking so long in the sales cycle - fear of change. But making No Decision is still making a decision.

You will hear other objections like:

• I just bought the server
• I just upgraded to version 0.7.1.1.1.3b and paid for it.
• I just re-cast my Postini contract

The servers can be re-used for something else. The sunk cost on the software can probably be re-claimed by the move to Outsourcing.

Today, I was talking to a salesperson for Hosted Exchange. We agreed that there are big obstacles to people buying into hosted email - whether Exchange or Gmail.

1. Change
2. Headcount
3. ROI

Again the fear of change is number 1. No one wants to make a decision for it to turn out wrong. No one wants to make a decision because CYA right now may mean you keep your job. But in some cases, making the decision could save your company because SAAS is a cost saver in many cases.

This leads us to Head count. An IT manager isn't going to move to SAAS right now because he will lose the budget justification for his head count (number of employees in his department). Maybe Tech One-Twenty spends only half a day each day on email issues. If you outsource it, what do you do with Tech One-Twenty? He can start working on priority projects or long term initiatives (if he has the skill). Likely, he will need to be let go - and someone has to pick up his half-day of work. Dilemma.

Finally, there is the ROI (return on investment). In some cases, there may not be a return enough to make the move. Even calculating the total cost of ownership (TCO) may not be enough if there is an IT staff.  But if the business doesn't have an IT staff, then moving to SAAS should be a no-brainer.

So how do you sell 40M paid mailboxes on Zimbra? One small business at a time. SOHO and every business with 50 employees or less. Or businesses with old servers or software (like Exchange 2003).

We did discuss that the customer acquisition cost is large. If the sales cycle is 6 or 7 months, a sales person is spending about 4 hours or so on contacting the client to get to the close. then maybe another 3 hours to demo, propose, paperwork, and survey. Provisioning is about 8 hours. So 100 email boxes is costing you 15 hours of labor. At $25 per hour average for a $50K salary, that's $375. But it is really about $488 when you consider that salary is only 70% of it. If you move them to Gmail/GApps the profit is $10 per user / mailbox per year. That's $1000 from $488. That doesn't include ongoing support costs. Just something to think about.