Jumping on the Cloud Bandwagon

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

Jumping on the Cloud Bandwagon

More master agencies are claiming the cloud, so to speak. They are signing up cloud providers faster than the ink can dry on the agreement. (Ben Bronston must be busy.)

They are jumping on the bandwagon for a number of reasons.

One is Consolidation. The new landscape of Ethernet is cable and ILEC. The CLECs are mostly all gone. You have to expand the catalog beyond just network operators and VoIP.

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The other reason is price pressure. Pricing across all telecom products - mobile, bandwidth, Ethernet, VoIP - has been declining about 3-10% year over year, creating a problem for the operators and partners. When pricing craters, you have to sell more and more and more to maintain the same commission level. At some point, just selling network isn't going to work because you can't close enough deals or even fill a funnel fast enough.

When 1GB pricing is less than what 10MB pipes were just six years ago, think about how much you have to sell and how fast.

Even the current price war in VoIP/UC isn't helping. Because there isn't enough Demand for UC - the demand is for POTS replacement and dial-tone - the price per seat has dropped. It hovers just below $20 right now.

I understand that the customer wants the cheapest price - and it is easier to take the order when you find the lowest price - but you have also just lowered your commission.

Providers are starting to cut commission points when they lower the price. Partners and Channel Managers aren't happy. Well, then sell it at rack rate.

So carriers consolidation means fewer vendors and pricing compression means less overall commission. More vendors are needed. Luckily over 600+ vendors have entered the space in the last three years while more than one-quarter of the partner channel have moved on. Retirement, M&A, and business shift/pivot have resulted in a lot less sales partners at a time when there are so many more vendors to choose from.But to be realistic choosing a UC vendor among the 2000+ available is like picking Red Delicious apples at the grocery store. They all look the same. How many do you want to smell and test for firmness before you pick one?

The cloud computing piece, as we found out two weeks ago, is owned by Amazon. AWS and S3 are hosting about one-third of the web!!!! Rackspace, CenturyLink, Azure, Google Compute, IBM/Soft Layer and the others haven't really stepped up their marketing game (even in the wake of Amazon's outage.)

Businesses are moving to SAAS, IAAS and other computing environments. Partners are in a position to offer assistance to businesses in this regard. It is uncharted territory for many, but the business model has shifted to wallet share. If you want to survive (and thrive), it is about getting more wallet share from the customer. That means selling them email, Office365, VoIP, colocation, security and more on top of the network and bandwidth that makes up the typical sale.

We have seen a number of press releases in the last 4 months about SD-WAN - mainly about SD-WAN providers signing up with carriers and with master agencies. SD-WAN the new UCaaS!!! This technology could be the next big thing, but they said the same think about IP Centrex (VoIP) over 15 years ago and about WebRTC.

Our biggest problem: We push Product. That's right. We are a bunch of Product Pushers. We would make ideal drug dealers because we don't create demand, we just push a product on someone who wants it.

We don't sell Solutions. We don't even offer Solutions. The vendors don't offer solutions either. They pimp products. It makes all of this really hard to sell.



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