I know we are facing TDM sunset but from the looks of advertising from the likes of Birch and Bullseye, POTS is still alive and well - and profitable! POTS is still the reliable choice when it comes to voice lines for alarms, elevators and faxes.
For many scenarios, an on-premise PBX makes more sense than a haphazardly deployed Hosted VoIP scenario. Many a small business replaces POTS with SIP trunks to get mileage out of their aged key system. Switching to a new cloud PBX is not a viable option for some small offices because they don't want to change behavior. Hosted VoIP does a poor job on key system emulation despite years of partners selling it and providers trying to deliver it. It is one big face palm.
If PBX were indeed dead, wouldn't one of the leading UC companies have 1 million seats by now? Instead they are struggling to get to 700K seats.
The problem with UC is that it is mass market and it would be better off verticalized.
It would be better for all if Broadsoft wasn't competing directly with its own customers by selling direct to users at $15 per seat. That smells of desperation.
Someone asked me what I meant by that. Broadsoft selling direct cuts out their 400+ clients - like Vonage, TPX & Nextiva. Now these providers have to face price compression from their vendor. It's like ISPs and CLEcs who buy wholesale from ILECs and cablecos only to see retail rates are cheaper than their wholesale rates. Isn't that a crock?
BSFT can't add any more clients because every carrier on the planet has already picked a softswitch - BSFT, Meta, Netsapiens, or home brew. The only way to maintain revenue is to sell direct. BSFT isn't exactly raising the ocean or expanding the pie. They are just taking a big bite from the pie that their clients have been baking for 10+ years. Sure, everyone says that cloud comms is starting to take off; that it is hitting high adoption, but is it the UC we have seen or a bunch of variety?
Office 365, Cisco Spark, Dialpad, One Talk, Fuze, Shoretel, 8x8, RingCentral, Grasshopper, Mitel, Avaya, Jive, Intelepeer <- that is a lot of variety under the UC umbrella. With 2000+ providers of some form of UC in the US, even with an accelerated pace of adoption by users, will there be a clear winner soon? Probably not.
In fact, all these choices without a clear winner probably helps Microsoft more than anyone. When in doubt buy from the established.
There are factors: it isn't a replacement system so much as a change. Extra gear is required (POE switches, QoS Router). It isn't as reliable as POTS - and can't be used in all places POTS was. The call quality is often not clear (unless you put it up against cell phones). (It's why they are touting SD-WAN for UC). It isn't cheaper than POTS in many cases. The deployments are often messy. (Providers can barely turn up Internet Access without issues let alone something complicated like Hosted PBX.)
And finally it doesn't pay much in commissions. At $15 per seat and even a 20 seat deal, the MRR is $300. That is a big headache for $300 in billing revenue. Easier, faster and better to sell network still. Or POTS. Or on-premise PBX with higher compensation. 3CX has been doing everything to make a partner's business model sing.
This isn't me being a Pessimist. This is me being a Realist. This is just how it is in the street in many places.
I don't hear anyone hawking white glove service or money back guarantee or no headache install. I hear the talk of zero touch deployment. That's the wrong way to go except for the CFO who wants to maximize profit per contract. Customer experience is someone else's domain.
I don't hear anyone talking about their call quality, their customer experience, their hand holding on deployment, their world class PMO. These are better things to talk about than price and features.
]]>The products that have been launched recently sit in big buckets titled IOT, Cyber-Security, Managed Services, SD-WAN and of course UC (UCaaS, UCC, WCC).
Rich Tehrani has a nice read about AI and analytics transforming companies like Vodafone.
COLOTRAQ has a new IT Risk/Cyber-security Assessment and Planning Service. They even brought in some talent to delivery it in Victor Zamora.
MetTel launched a single SIM for IOT. One VAR I spoke with said that they are going to run with this to the end-user because it is a niche that is almost without competition.
Level3 consistently emails me about selling cyber-security, especially their DDoS Mitigation service.
EarthLink is still around? They launched a secure public Wi-Fi connections with Norton WiFi Privacy (basically VPN). Considering how often businesses use Starbucks, hotel, airport and other public wi-fi, this should be a no-brainer sale.
Panterra rolled out Streams, an ode to Slack, but integrated into a secure, encrypted full unified comms platform.
VZW has One Talk, one of the few mobile UC plays out there.
When TelePacific re-branded as TPx, the highlighted products were managed IT, security, UCaaS and SD-WAN.
Aryaka just rolled out a clientless SD-WAN: "SmartACCESS - the first-to-market SD-WAN for remote access, with built-in dynamic CDN." In the US, Content Delivery Networks are how a majority of users get their Netflix chill on.
Verizon announced that they are selling more MPLS due to SD-WAN. CenturyLink has said that SD-WAN is not a quick fix. So there is a lot of room for expertise and advising in these projects still.
AT&T says that enterprise clients want a hybrid solution to managed services. (Nothing new here). Some of the services will be outsourced to the likes of AT&T and some will remain in-house. That is the way it is for cloud as well - HYBRID, according to an Evolve IP survey. Private for mission-critical, Public (AWS, Azure, SaaS) for mass market stuff and VPS for DevOps. Pulling that together requires some expert help. Is that you?
All of these vendors are just waiting for Channel Partners to pickup the ball and run with it.
It will take more than the Twitter approach to launch. Twitter put there platform out there and waited to see what people would do with it. Years later, Twitter still has no idea what the business case or financial model is. Don't be Twitter!
It isn't about just throwing your toy into the yard so someone will stumble along to play with it.
We want to be spoon fed who IS buying it; why are they buying it; etc. (As I have written about ad nauseum.) It is all about the Stories! Ignoring this means that we will leave that toy alone on the ground over there.
I understand that channel partners have to innovate, change, transition, etc.
With network revenues steadily declining and telecom being a broken mess, partners spend all day selling bandwidth at lower rates - and lower commissions - and then having to navigate the many layers of Dante's Hell that is a carrier today to get it installed (and then fixed - yes I am talking to you ACC Business and GTT!)
In the midst of this mess, on-going consolidation and the accompanying musical chairs is making a partner's job harder, not easier.
Much of these products require new knowledge and some training. That is not time that is always available to partners. I know, Go Make Some Time before you become Extinct. You see, we'll have time when we are extinct.
Besides compelling stories, buyer profiles and the WHY, we will also need new sales skills. Selling dial-tone or network is replacement. Selling Cyber-Security or AI requires a different sales approach.
MSPs understand how to sell managed IT but some VARs do not. (Hence why they are still VARs!)
While many of these products allow a Partner to enter a green field with little competition, maybe the business model for the partner has to be demonstrated as well.
And maybe instead of launching more services, you figure out how to deliver on the ones you have. If you can't deliver the easy stuff (Network), I will never give you a shot at the complex!
Just some food for thought while you wait on the Channel.
]]>Someone I met in Vegas was a laid off CM who was discussing how exciting it was to launch her partner business. I hadn't heard from her and just checked on LinkedIn. She is back in the W-2 world of being a carrier channel manager.
Over the years I have met a handful of CMs who had been doing Agent business on the side to build up enough MRC (monthly recurring commissions) to make an easy slide over to the independent side.
There are a couple of executives to made the leap into master agencies by bring a deal in their back pocket big enough to start them off.
It takes a while to find a prospect, ink the deal, get it installed and then get paid. Number porting for anything voice and fiber installation for anything network can push out delivery dates. The other problem is that if you sell a 100MB pipe $995, after waiting 120 days for install and turn up, you get that commission check of $150. That isn't going to go far. You need to be selling deals every week. Not dabbling in it looking for a whale.
So while I understand the side hustle on being a partner, I don't know how anyone can look at it and call it easy.
An Agent is often described as a lifestyle business, too. Sure there is flexibility and monthly recurring commissions help, but you only get to eat what you kill. Time off comes with an opportunity cost.
That lack of a guaranteed check accompanied by those luxurious benefits are usually the deterrent to a switch from CM to partner.
]]>What happens with Broadview Networks under Windstream? Windstream is only midway through its integration of EarthLink. It will now have 8 UC platforms.
That isn't too confusing to all of the sales channels. Eight to choose from! WIND should be a one stop shop for everything UC and SIP at this point. [Similar to VARs hitting up a VAD like SYNNEX for many of these same vendors.] To do that, WIND would have to hire in some name brand SIP Experts to start beating that drum - loud, clearly and often. Currently, the message is a new flavor of UC every webinar. No over-arching
The noise about T-Mobile and Sprint merging is getting louder. Here's the problem: Recall the mess that the Nextel-Sprint integration was. This will be worse. Why? T-Mobile didn't even really integrate MetroPCS. What synergies are there really? It would simply be to get bigger, not to be a better competitor. For at least 24 months, VZW and AT&T would simply kick its ass - and they wouldn't be able to do anything about it.
That sums up the Level3-CenturyLink merger as well. That is scheduled to start in September if California and a couple other states don't derail it. This will be a mess for customers and partners alike. The product set is so different. Level3 is wholesale VoIP, international, transit and transport. CenturyLink is consumer, small business, mid-market, broadband, voice and some cloud. Very different sales skills.
Both exited data center, but CenturyLink has acquired many cloud and security companies in the last few years. They haven't done much with it because they don't really sell to Enterprise like they would need to. Plus Branding. Plus confusion over at Savvis after that acquisition.
None of that factors change post merger. None. One problem with many of these telcos is that they don't bring in fresh blood. Frontier just hired from Verizon for VP of sales and retention. Pull in someone from outside telco. The biggest hurdle: Culture. Culture eats Strategy for lunch.
Most of the major CLECs are gone: XO, EarthLink, Level3. Others are transitioning: TPX, AireSpring, Birch, Mettel to try to figure out what business looks like with network resale and managed services. It is a different world.
Everyone was betting on UC, but most couldn't get over the deployment headaches. Then when the price war started, they not only weren't prepared for the war, but couldn't or didn't get into it. The latest top 10 leader board for UC doesn't look too much different than 2015 or 2016. Next year it will for certain.
Windstream and Charter should look different in 2018.
Cisco's Spark revamp at EC17 coupled with its latest acquisitions and lay offs might have an effect on Cisco UC seats later this year. Or the acquisition of West Corp by Apollo Management for $5B and change might stall sales. Some of Cisco's other partners - like FLTG in NY - also got acquired. Integration after acquisition always affects sales (and retention).
AT&T and VZ look to be big winners while the CLECs shift and transition. Some of the other players in the space - like Zayo and GTT - also made acquisitions. But are they really replacements for Ma and Pa Bell or even WIndsream, Level3 and C-Link? They have a window of opportunity that is for sure.
Zayo grabbed ELI and Integra. All of the press is about fiber to the tower, so I am thinking that will not be a C-Link or WIND alternative.
Comcast will pick up some business. At $6B in CLEC business revenue now, it almost surpasses most of the CLECs in revenue. They need to take some friction out of the quoting and ordering process. (Charter too! Unbelievable that at its size, it is so arduous to process quotes and orders.)
Until the next merger is announced this is what it will look like. The channel often went to CLECs because of channel friendly attitude as well as suitable product set. This time round the channel will be looking at companies NOT in the midst of turmoil. Ease of doing business will be relative. Just another reason businesses like using channel partners: so they don't have to deal with it!
]]>If I was starting my telecom agency today, what would I do?
When I started in 1999, I was selling basically one product (Wholesale DSL to ISPs). That was my entry drug of choice. It led to frame relay, ATM, IP Transit, DS1/DS3 and PRIs. But it was a single offering to a very targeted market. Most of those clients from 1999-2001 are still with me!
Certainly an agent starting out is going to be offering bandwidth in all its colors. However, I would build a multi-vendor bundle to sell to a specific audience. I am a big fan of vertical sales. Anyone can be a Generalist, but being a Specialist pays better. How many GPs (general practitioners) are left in medicine or law?
And being a Specialist doesn't mean that you have to turn away other business that comes to you, it just means that you have Focus. You have a target to aim at. You have an audience that you can get to know and develop a message for.
It is far easier to market a specific bundle aimed at a target vertical than it is to create a marketing message aimed at the generic masses.
Targeted marketing is cheaper. Easier to send email or postcards to every ISP in the BellSouth region than to target every SMB in a state.
One bundle I have been working on is the Verizon Wireless One Talk service with 4G backup, a Cradlepoint router, FiOS and a Square POS (point of sale) system. It is a targeted package - Retail. It allows for add-on sales: smartphones, video surveillance, email or Office365 and web hosting. You could also offer credit card processing and PCI DSS Compliance via EarthLink. You could go bigger with managed wi-fi. There are many add-ons, but the original 4 component bundle is where to start.
The bundle contains the essential ingredients of a small retail shop: broadband, backup (because retail can't make money without 100% uptime on the Internet for credit card processing and digital phone service), wireless network, phone system and cash register. Signing up with SYNNEX and any of the Alliance Partners would get you all the access you need to bundle that - and make commissions.
Anyway that is how I would start today. Chasing Verticals with a multi-vendor solution that I designed for them.
]]>By that, I mean, if you can fog that mirror, you are a partner.
Shouldn't partner programs be more like the NFL or NHL draft than an army recruitment office?
Wouldn't it be better to not sign up everyone?
It would certainly help providers' partners if there was demand for the service offering and if there was just a handful of partners to supply that demand. Instead we have little demand* for the services and everyone can be a partner.
That is the VAD theory, because a value add distributor is similar to a store. They can carry anything. They are in logistics, warehousing and distribution. That is all the value they bring. In stock or not?
On the Master Agent side, I just don't understand the signing up of 20+ UC providers, 10+ data center providers and 10+ Microsoft Partners.
For perspective, USLEC had 26,000 clients when Paetec bought them; Cbeyond had 51K when Birch acquired it; 8x8 has 48K. These aren't large numbers. "In 2012, according to U.S. Census Bureau data, there were 5.73 million employer firms in the US. Firms with fewer than 500 workers accounted for 99.7 percent of those businesses, and businesses with less than 20 workers made up 89.6 percent." [SBE] The sweet spot for businesses, according to CompTIA, is 10-100 employees, which represents a 20% slice of the overall market - or 1.8 million businesses. FYI, 50K of 5M is 1%.
What's my point? No one is crushing it (or ever will). A lack of funds, crappy marketing (if any), no focus and flawed strategy that is poorly executed are all factors that mess with success in telecom. If AT BEST you are going to get 50K businesses, do you really need 450 to 2500 partners signed up to hit it?
Wouldn't providers do better with the zealots?
Verizon and BellSouth/AT&T used to be exclusive. Partners could only sell their services. It worked out well for both parties. It meant there was focus, specialization. Co-selling worked too.
By signing up every master agency, vendors think they get access to more partners. They don't. Most partners use 5 (five) master agents. VARs use at least 2 (more likely 3) different VADs. So by signing up more partners, vendors get their logo in more places, but they don't get more partners. In fact, what they DO get is to fork over more dollars for events.
The model can't last much longer. And if they did the numbers over the last even 4 years, they would find that Pareto knew exactly what he was talking about. Also, that the amount of busy work given to channel managers is just piling up. Hard to hit quota when bogged down with recruiting, quoting, selling, reporting, funnel and a hundred other things.
What vendors confuse is exposure for demand; logo placement for marketing.
I've written about it often and enough. Where's the competitive analysis of the marketplace? Who is your target? Why do they buy? Why YOU and not THEM?
It is very different with network. Lit buildings and fiber routes are the factor. You don't have that with managed services or security or cloud. The limiting factor for voice/VoIP/UC is LNP which has mostly been solved (except for pockets of independent IOC territories).
Put up the red velvet rope. Sign up, train, on-board and work with partners who actually want to work with you. And limit that. It builds up the relationships that you have. It makes your partners stronger.
It isn't going to limit vendor revenues, because vendors are probably quoting and saying YES to stuff that they shouldn't be. Vendors are NOT getting deals that they would like to - or that they built for - because they are too busy chasing every single partner and every single opportunity. In the process, the vendors are diluting their message (brand) and wearing out their channel managers. But hey what do I know. I have not only seen this playbook, everyone has a copy of it, and yet no one is winning using it.
*DEMAND = after 15 years, UC has only penetrated to 29% of the market? CLECs have been around since 1996 and can't get more than 1% of the market - in 20+ years.
]]>On an agent webinar this morning, Windstream is beating the SD-WAN drum. I understand that SD-WAN is a boon to retail, restaurants, branch offices and rural locations. Not every business wants to pay over $500 for a pipe. They want to pay what they were paying for T1s. SD-WAN will be a boon for broadband providers - satellite, 4G/LTE, fixed wireless, DSL and cable modem. It swings the WAN back to IP-VPN. Is that a great idea in the age of Hacking?
There are other benefits for SD-WAN: ease of management; faster deployment; analytics; transparency; failover/redundancy; but the bell that most CIOs rang at the WAN Summit in NYC was cost savings.
We are going to see a bunch of locations move from dedicated Internet (DIA or MIS) to broadband. From a commission standpoint that will suck. From a vendor standpoint that will be a pain. However, if partners layer on SD-WAN from a provider plus two broadband providers, we might be able to keep the MRR close. This will become the standard configuration for many business locations.
That is the drum that is beating.
As an RLEC (rural ILEC), revenue streams heavily favored consumer services. The RLECs had USF and TDM transitions occur to shake up their business models. Also, cable starting eating their lunch. DSL didn't cut it. The RLECs had to spend to beef up the network for both better broadband and Telco TV. They just did it too late. Now they have to chase the business markets with HPBX, SD-WAN, cloud services and anything else to bring revenue in and margin back.
CLEC margins on resold network are thin. UC isn't killing it, for anyone. Managed services is where the margin is. SD-WAN is just another technology that needs to be deployed for the customer and managed (like managed router or a monitored Internet pipe).
That is why the drum is beating.
Viptela puts it nicely, "In today's fiercely competitive digital-driven marketplace, enterprises must remove complexity from the WAN. WANs need to be easier to manage, cost-efficient, more agile and available, and better aligned with an organization's computer and business needs. The SD-WAN is quickly becoming an essential component of enterprise digital transformation."
This makes it sound like WAN is complex. It isn't really. MPLS is not that hard or complicated. It is easier than IP-VPN and more secure. (Or at least it is for me.) With many network operators connected to cloud platforms (like AWS, Rackspace and Azure), adding a direct connection to a WAN is simple. (Or if the customer has a data center presence,he can tap into the cloud via a peering fabric.) There are ways to architect a secure, manageable WAN.
Partners will be selling SD-WAN, the flavor of the year. I just wish they had not all been calling it SD-WAN and had actually incorporated it into a branded service offering. That could have led to differentiation and some targeting so it doesn't become a commodity so fast. (Oops! Too late.)
]]>If you cannot see the flash mp3 player, you can listen on SoundCloud HERE or download the mp3 HERE.
]]>Since most product markets are flat (think broadband, cellular, voice, TV), the race is on to take customers away. Without a better mouse trap, it is all about price.
In an industry (ours), where technology is painted as the product and we mainly sell replacement products (SIP Trunks for POTS and PRI, Ethernet for T1, 4G for DSL), the price compression happens quickly. This means less commission and less income for the partners (agents).
Despite this dilemma and the revenue decline it has caused carriers that has resulted in industry consolidation, carriers have not done enough Product Market/Fit testing. Once again they go wide instead of deep. (At least EarthLink went deep into Retail.)
Money is only left in verticals and specialization. HIPAA and other compliance allow for a discussion about business needs, not cost savings. Talking about business needs, outcomes, and pain points are how you move away from the RFP process.
Selling into verticals means that you can speak their language; bring best practices (or at least anecdotes); and word of mouth is louder in a silo.
This is just part one of several to come on how partners can make more margin.
]]>That is a lot of noise. That is a lot of email begging for attention.
We have a sales problem. Cold calling, cold emailing, spam, robo-dialing, call centers, direct mail, pop-ups, etc. have created an audience that has gotten really good at ignoring people.
Buyers complete more than half the sales process before talking to a salesperson. Why? Because no one wants to talk to a salesperson. No one wants to be added to the list. No one wants to be sold, but they want to buy. And for non-logical reasons.
All these vendors looking to the channel for sales. But are channel partners looking for new vendors? Not really. Unless your product is in demand. And most aren't.
Not only that most companies do ZERO marketing. No branding. No PR. No anything. This not only doesn't help demand, it stifles lead generation and even hampers building trust, the number one requirement for sales.
People ask friends on social networks for recommendations. They aren't looking in the yellow pages. They aren't even Googling it. They don't see billboards, because they are watching their phones instead! They don't get newspapers. News now comes on the mobile or as a trend on a social network or in a social media feed. That has turned it all around. It makes everyone a Publisher; everyone is a media company. (Seth Godin said that a few years ago!)
So the vendors will turn to more master agencies, who quite frankly have too many vendors also. The portfolios if printed would be a Sears catalog or a copy of War and Peace!! That doesn't solve the Noise-Attention-Demand problem either!
Despite what YOU want or need quota or revenue wise, not everyone will want to offer your product. There has to be some alignment. Either they already sell something similar or the customer base is your target market. Unfortunately, no one wants to identify a small target market. It has to be 1-1000 or Everyone! Or Wall Street and VCs will not give you more money.
It is important to note that most channels supply demand with sales activities, BUT THEY DO NOT DRIVE DEMAND! They do not create demand in the buyers. That is supposed to be done by the vendors like IBM, HP, Cisco, Comcast, Verizon Wireless, AT&T.
These named vendors are some of the biggest spenders on advertising. Effective is a different story. Branding or awareness campaigns are not lead generation.
The problem is all Marketing.
Peter Drucker said "Because the purpose of business is to create a customer, the business enterprise has two-and only two-basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business." Later he added, "The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself... The aim of marketing is to make selling superfluous."
Cable broadband did that. Microsoft a few times. Apple. Cisco for a little while. Now, who does that?
The Product-Market Fit is ignored. The Customer isn't even included in any of the product launch. It's like, "Well, there are similar products out there, so we need one." Whether or not there is a customer for that product. Any innovation added? Not a new feature but actual innovation? Probably not.
When Amazon launched Chime, the response was OOOH! Then it was: "That's a crowded space." But Amazon will take friction out of some of the sales process. It will also eliminated some margin for many players in that space.
The companies in the price and spiff war, have failed in all areas of marketing. They have basically given up. I'm kind of tired of the Race to Zero.
Think about cellular phone plans. For most people, it is about good enough. Not the best. That is the problem VZW faces right now. The best just can't command the same premium anymore.
Think about Internet. Broadband is good enough. Except when it is down or congested. Except when your speeds or throughput suck. But for many people buying Internet for their business, it is good enough.
For most people, it is about good enough. They go with Cheaper because no one has explained the Value.
When the master agency has 24 VoIP/UC vendors, I dare anyone to explain the Value of one over the other. Or the specific difference in service offerings.
I already see it happening with SD-WAN. It is the MPLS replacement with broadband IP-VPN. We have been there and done that, but again price, because we don't know how to market.
And why do we choose to market the technology as the product???????
Even with security, where is the demand? Every enterprise needs it. Companies get hacked every day. But the cost benefit analysis says we will risk it. Not much demand.
The channel cannot manufacture demand. That isn't what they do. They sell to people who want to buy. And they sell them what the customer wants, not needs.
And quite frankly, especially in voice, the channel sells the cheapest.
Basically we are all in the insurance sales game now. Think about that.
And it is all the fault of the vendors. For NOT positioning better. For lack of Product-Market fit. For not branding, lousy stories, lack of marketing and then following all that up with having no floor on the pricing. It's a complete business disaster.
]]>When VADs want you to sell hardware, it was always a possibility. It takes less than an hour to signup with SYNNEX, Tech Data or Ingram. Yet what Agent wants to sell hardware? There are at least 3 reasons why Agents (traditional telecom brokers) will not sell hardware.
RMAs - returns. Dealing with hardware returns is a pain.
Billing - Agents don't have a billing system. Agents let the providers deal with install, billing and returns.
Compensation - Hardware is a one-time sale and payment and it has really Small Margins! We prefer Hardware-as-a-service with recurring revenue and providers handling the implementation.
]]>In this podcast, I speak with TelePacific's SVP Ken Bisnoff on why TelePacific is re-branding. The CLEC of old is gone. Telecom is shifting to be more than voice and Internet. TelePacific has transitioned to a Managed Services Carrier with its acquisition of DSCI. TelePacific is not the same company it was even 5 years ago. It is now a Tier 1 CSP for Microsoft. There is a SOC (security operations center) in St. Louis. The lines of business have changed. Now the name will too.
One point made during the podcast to note: the providers are shifting, but Agents need to shift too.
If you cannot see the flash player, you can download the mp3 or listen on Soundcloud.
]]>Now we have a bunch of hype around Cloud Farming and cloud assessments. That sounds great, but buyer beware! Unless you have a Cloud Architect or Network Architect on staff to review these plans, are you sure you have the clients best interest at heart?
In cloud, the hard part is the MIGRATION. In data center world, a colocation migration for a Fortune 5000 firm is a two year plan. Two years to move a data center cage! The circuits, the boxes, the IP addresses, the mapping, the design, the physical move, the duplication, yadda, yadda.
I sat in meetings on software migration projects in the early 2000s that took over a year to plan. Yes, a year to plan before starting the migration, which took two-plus years.
'Verizon Communications Inc. announced that it has moved more than 150,000 employees to Google's productivity apps, called G Suite," Bloomberg reported. I'd like to know how long that took.
8x8 sold some big accounts in the last 15 months - "Announced new deal with Regus, the leading global workplace provider, to deploy 8x8 Enterprise Communications as a Service (ECaaS) solution at Regus worldwide business centers." And 8x8 "Announced 2,400-seat deployment across nine global locations for new enterprise customer NetSuite." Neither of these deployments happened quickly. Try a year of roll out. Global LNP is a bigger nut to crack than getting some RLEC to release a number.
I'm not against Cloud Farming. I think that agents have to practice going deep to get more wallet share from the customer. Not just get the network and the voice, but the email, the backup, the SaaS, etc. To do that takes some skill and training, being deliberate and confident.
I just don't know how that works with reality (in scale). The shortage of qualified Architects and talent to assist in planning and assessment are just the first bottleneck. The lack of a PMO department from most partners and providers to steer the migration and deployments will create some messy implementations as well as unhappy customers and partners. Lastly, we come to the compensation. When the sales cycle coupled with the deployment timeline is more than two years, how will that excite partners to sell it?
Certainly, there is a move to cloud occurring. It is NOT happening at the rate of change that analysts or cheerleaders are predicting or broadcasting. Most computing environments will remain Hybrid - some SaaS, some colo, some other. Much of the decisions on this matter consider such factors as flexibility, ROI, TCO and internal IT skills.
People forget that Hosted PBX/UCaaS deployments still suck. That LNP still takes up to 14 days (or longer with Birch!). That Internet pipes are on a 120 day construction delay. That even something as minor as turning up a port and a circuit between two lit data centers can fast approach 90 days longer than the two week install interval quoted. If we can't get these relatively simple things to work, you want to jump on Complex stuff?!! [This is me LMAO!]
NOTE:
There are experts out there. COLOTRAQ has partnered with some smart people for Cyber-Security and Cloud Readiness Assessments. Certainly, Microcorp has leveraged its TAP Program to put experts at the ready for partners. Acuity in Tampa has started building up its own managed services portfolio including wireless management and VoIP deployment testing. Other master agencies have brought on some cloud talent. They had to. It will be the engineers, the talent that can break it down and talk plainly about it one minute and delve into I/Os the next that win deals. Look for those.
]]>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.
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.
]]>After 15 years, 2000+ providers can only take a 28% handhold in the market?
The growth rate of Hosted PBX (HPBX/UC/UCaaS) has always been a hopeful bad guess. And it will continue to do so because too many people, companies and dollars have been invested thus far for any analyst to turn on the sector.
There are 4 major problems with the UC Market.
One, PBX sales have declined about 3% per year. Even Avaya going bankrupt isn't going to speed that up. Not only do people trust boxes; they are cheaper in the long run. Single location businesses, which is most of them, don't have a PBX problem that UC solves. There is a current Product/Market MisMatch that needs to be examined.
Mobile UC may get more traction. Or a simple PBX like Dialpad or Fone.do. Gary Kim writes that the market may be too small. At ARPU of $400, it takes a bunch of sales to move a needle for a company like CenturyLink, Verizon, AT&T, Comcast or Charter.
Two, I wrote this last week. Any 15 year old product needs a re-fresh or re-think. We are overdue for a Re-Think. Slack was a re-think, but that strays to the edges of what UC is. So does Cloud Contact Center. And these companies want to be everything for 1-1000 employees. This isn't Pasta or Rice. This is technology.
UC is Change. People hate change. The Channel doesn't sell Change; we take orders on replacement services. Harsh but mainly true. There are exceptions of course, but the general rule is that agents are transactional. Even Inter-Connects aren't excited to go sell a cloud service. MSPs will if it is white-label and can be bundled into their package, but that falls into POTS Replacement more than a full-blown UC deployment.
Three, HPBX has 2 camps of buyers: POTS replacement sold as cheap as possible and actual UCaaS. Where do you think most of the market is? Right, cheap VoIP.
Now if I am buying cheap VoIP, am I also going to pay for a backup circuit or SD-WAN or any other service enhancement or assurance? Unlikely -- or I wouldn't be buying cheap cable broadband and the cheapest OTT voice!!!
If the buyer spends more on bandwidth, has a backup circuit, they are likely going to buy UC as BC/DR and that isn't cheap VoIP.
The fourth Big Problem: There are far too many providers! Telarus represents at least 37 HPBX vendors. Other masters have at least 25. How does anyone differentiate/ stand out/ position in a marketplace where the cloud broker has a choice of 2000+ providers?
This becomes a problem for the providers who enter into a Price War (seats cratering to below $15 each) and a SPIFF War, where providers are literally buying sales.
One of the most successful HPBX providers, 8x8, is up for sale. This move comes after a recent re-branding as a Global UCaaS provider.
Are the owners (the 8x8 founders still own most of the voting stock) looking to exit? Or is it that the machine to keep bringing in 20% growth quarter after quarter is grinding down? I just don't know who would pay $1.5 Billion for 8x8. VZ payed $1.8 for XO which owned fiber assets. WIND payed $1.1B in an all stock deal for EarthLink, who also had a bunch of fiber. Fiber gets a bigger multiple than VoIP.
The other thought is that what if $300M is about all the B2B annual revenue you can get?
From a recent discussion about Amazon Chime: there are approximately 100 million phone/conferencing lines in North America. If Amazon Chime with Vonage can hit a 5% share of this market, that equates to 5 million subs. At $5/seat/month, that is $300M incremental revenue opportunity for Vonage. That would be a needle mover for most UC Provider, considering 8x8 is at $225M in annual revenue now.
The emphasis has always been on multi-location and mid-market. That's why "41% of larger enterprises are using cloud UC services." Now everyone is focused there (upmarket). However, the bulk of the businesses are single location small business (20 million of them). That means a new product bundle is needed to attract this crowd. Many thing that this sector will be mobile only with an auto-attendant in the cloud.
When you look at the large number of messaging apps, at some point, one of them - Slack, Messenger, WeChat, HipChat - will hit the right bundle of functions to steal mass appeal. Not yet, but maybe soon.
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