Nothing But Vanilla Pudding

Peter : On Rad's Radar?
Peter
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Nothing But Vanilla Pudding

Do you remember playing musical chairs in school? The music begins a chair is removed and you circle around until the music stops. When the music stops, you try to sit in a chair and not be left standing. Channel positions seem a lot like that right now.

I have written about the massive amount of personnel shifting going on in the industry. I would like to think that all this change would mean, well, change. But it doesn't. It means a lot more of the same.

When chairs are being removed, who is going to take a risk? Not many. Most will hunker down, hire friends who will help cover their backside, and aim for the center of the road, playing follow the leader.

I see it with features, product lines, messaging, compensation (SPIFFs) and partner agreements. The sameness is like drowning in a pool of vanilla yogurt.

As we head to two back to back channel shows, I am packing with no visible enthusiasm because for the most part, there isn't anything to get excited about. The sameness is deafening.

There will be "newness" in the form of the re-branding of merged entities. And there will be a new term bantered about: SD-WAN.

There will be some new faces in familiar logos and familiar faces in new logos. There will be parties. (It looks like drinking is the main reason to hit DC this August - and I don't mean because of the presidential candidates).

This industry that is hoping and praying and dreaming of moving to cloud services is in major need of a colonic.

In the UCaaS space, premise based PBX has not disappeared. The handset / desk phone has not gone away either. Cisco and Intel are still shipping boxes and chips. Laptops are still being bought (more of them by Apple than the old PC guard). The laptops come with hard drives and O/S still, not dummy cloud terminals yet. Virtual Desktop or Desktop as a Service is not on fire in North America. All those analyst predictions were WRONG!

Most discounted one big thing: No one wants change AND selling Change is Hard! Cloud is change. And it isn't even assured change. If you have ever been involved in software deployment, you know that most of the time the desired outcome is far out of reach. In short, software deployment falls short. That doesn't bode well for a transition from a controlled environment (NOC, servers) to a rental model (SAAS).

Are people moving to cloud? Absolutely. If you want to include Salesforce, Office365, dial-tone replacement sold as Hosted VoIP and SIP trunking as cloud services.

Telecom spend is down from 2014 to 2015. A lot of that is due to price compression. Cable voice is about $10. Some Hosted VoIP providers are selling seats at $10. This happens for two really different reasons. Cable gets to raise bundle ARPU by $10 to give you voice. It is a win for cable. Triple play sales plus $10 extra. For the VoIP player, it is revenue, any revenue. Please someone buy my services!!!!

One Broadsoft provider dropped about $3M to get to 12,000 seats. The high end is Vonage and 8x8 with just over 500K seats each. Not even a million seats after 10 years! Meanwhile Windstream has 1 million SIP trunks on its Broadsoft platform - and XO has 2 million.

It used to be that voice went to the ILEC. Then IXCs came along to rob some LD minutes and then some toll-free minutes. Then CLECs got into the game. Even at its heyday, no CLEC had more than 60K customers, except maybe some UNE-P players before they crashed. Today, voice is replaced cellphones, cable voice, SIP trunks from OTT and CLECs, Hosted VoIP by ITSPs and apps of every variety. Everyone is fighting over a voice pie that is going to ZERO.

This is the main reason why when selling UCaaS, you have to look at the whole system and not that you are selling voice. Businesses have to be omni-channel now. That is why cloud contact center is hot. That is why CPaaS is hot (twilio IPO and Vonage-Nexmo deal and my podcast with Zilkr.)

While this shift is happening, it seems no one is noticing because the talk is the same. We push products at people who don't care because it is all the same. It is transactional. At least everyone knows the difference between a Big Mac and a Whopper.

If you think a new SPIFF for your HPBX offering is going to swing the tide, it better be larger than 7X MRC because that is the new table stakes now.

Well, two conferences of vanilla pudding coming up with a noise level that should have me drinking by noon. Let's meet for coffee. It's easy just get on my schedule.

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If you want to be green jello in the midst of all that vanilla pudding or even better, a brownie or piece of cake, give me a shout. I have a bunch of thoughts on the subject.

PS

Next year at this time SD-WAN providers - meaning just about every LEC - will be in the same boat as the UCaaS folks unless something changes, besides the people keeping a chair warm.



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