Highlights:
Smartphone growth is slowing.
Global Internet use continues to grow at 10% year over year, with 3.4 billion people on the Internet as of 2016. [QZ]
Advertising is about visuals (pics/vid), measurement, mobile and engagement. UCG (user generated content) is back.
Growth in Internet population is slowing, but growth in online ads is accelerating.
Combined, Google and Facebook accounted for 85% of the total internet ad revenue growth between 2015 and 2016. [QZ]
Amazon Alexa and other voice assistant devices are disrupting Brands as well as text based search. That is going to effect advertising revenue on one hand. On the other hand, Alexa is pushing Amazon house brands over better known quantities in order to push up margins. And they are winning at it!
Customer Service is about real time customer conversations. The Holy Grail used to be single call resolution that was hampered by silos and technology. Today with AI, Cloud, omni-channel contact center, we are closer than ever to that goal.
Retail has some bright spots but requires strong community and specific target market (slide 58). Or Subscriptions. [Funny, I say the same thing about UC/Hosted VoIP!]
For Restaurants, Eating Out is now Eating in with restaurant delivery. Grocery shopping is also about personal and delivery. Do you see where this is trending?
I am skipping Gaming, China, india, except to say that Gaming is a skills school and the old time the phone is put away (as another tech toy has your attention).
88% of U.S. consumers use at least one digital health tool.
"The rise of fitness trackers and health apps are collecting more user data than ever, while hospitals are sharing more health care information with patients. The average hospital holds 50 petabytes of health care data, and the total amount of that data is growing by 48 percent a year, Meeker says." [venturebeat]
What happens online in 60 seconds: HERE.
]]>There is an interesting article on Business Insider about Facebook making switches and routers for themselves. But now a number of telcos globally are trialing the gear. That doesn't help Cisco at all.
At the same time, the carriers and just about every other managed services provider is offering SD-WAN. These deployments are white boxes. Cisco, Juniper, ADTRAN and others are being replaced at the edge of the WAN by white boxes.
It is also hurting VADs like Tech Data, because these boxes are NOT going through distribution. They are being distributed by the carriers like EarthLink and TPX directly.
ADTRAN is making moves to stave off extinction with hardware as a service, managed wi-fi, and SD-Access.
It's interesting because Amazon's Chime is competing against Webex on the collaboration space. Carriers are competing on the WAN CPE space. It's VAR channel is modeled on hardware sales and installation. Selling software is not nearly the same business model as hardware.
This is just an observation - and it will be interesting to watch as these things shift.
]]>Private equity firm, TPG, last year acquired RCN and Grande. Now they are grabbing Wave Broadband in the Northwest for $2.36B. They will combine all 3 - Wave, Grande and RCN - to make a larger MSO. The PR says that they will be the 6th largest MSO, leap-frogging Altice. Altice owns Suddenlink and Cablevision. Comcast and AT&T have 22M and 25M respectively. The Top 4 all have more than 10M pay TV subs. After that it is splitting hairs with VZ at 4.6M to Altice with 3.6M at number 7. TPG's exit strategy will likely be Altice buying them.
WISP Redzone claims it has developed a "fixed wireless spectrum aggregation technology that can support broadband speeds of up to 400 Mbps per customer", according to press. Google Fiber must be excited.
Mitel has been making noise since early last year when it tried to buy Polycom. Now it is scooping up the assets that Toshiba is leaving behind as Toshiba exits the phone business.
Mitel also announced that it had broken 3 million users. According to investor presentations, Mitel has 3.2 million cloud users but only 588,000 recurring seats. To put that into perspective, Microsoft found 25 million subscribers for Office 365 (although the take rate is slowing to 900K per quarter). Broadsoft claims 15M cloud lines but that includes SIP trunks. Vonage is over 600K seats and 8x8 is close to that.
The details can be found in the 2017 Hosted VoIP/UC Market Report for the US, which was just released. See here.
Jive Software was acquired for $462M. That is a social collaboration software company based in Portland; not the UCaaS provider out of Utah called Jive Communications.
Amazon released Chime (a Webex clone) and cloud contact center. Now with Alexa devices it is taking over the speakerphone market. A few VoIP companies have integrated into Alexa for voice enabled dialing (something we need in cars!). Only a matter of time before Amazon gets into the dial-tone replacement game in conjunction with Twilio.
Panterra Networks doesn't do marketing. It's a shame really. They have a better than average UC application that is secure (encrypted), HIPAA compliant and 24/7 hack monitored. It produces one contact management file without duplicates. Added Teams with the release of Streams, which integrates UC, team messaging, file sharing and analytics into a single customizable platform. Worth a look.
]]>It isn't a sprint. It isn't about just growth. It is about steady growth and customer experience. Also, product-market/fit.
On LinkedIn this morning, there were at least 3 posts from channel managers closing business for their partners. If the channel managers are closing business, that is a better use of time than recruiting. And maybe a trainer is needed to teach sales skills and product to both channel managers and partners to keep those skills and knowledge fresh.
The other topic on LinkedIn this morning: SD-WAN. All generic info being shared under the umbrella of the vendors. This is not a good start to content marketing. This is not a good start to branding and positioning.
Seth Godin is giving a 100 day online marketing seminar. Take it!!!!
CenturyLink data centers were acquired by a group of private equity firms (Medina Capital and BC Partners) for $2.8B. This group will combine the 57 data centers with four cyber-security and data analytics portfolio companies to form Cyxtera. (Who picked that name?) The CEO of Medina Capital will be running the new firm and he used to be CEO of Terremark.
Verizon closed on the sales of their data centers (formerly Terremark) to Equinix this week. Windstream sold theirs to Tierpoint a while ago.
The divestiture of data centers by Windstream, Verizon and Centurylink does not represent a bad position for data centers. It means that the telcos didn't have the skills to leverage DCIM. The data center market is hot and growing. Inter-connection, peering, colocation and cloud computing infrastructure (IAAS, PAAS, VM, Hosting) are all in demand right now. Data center construction is growing by 8% per year.
Polycom was acquired by a PE firm. Many top execs have left. One went to Star2Star. This week the CMO went to Intermedia.Net.
]]>"AWS is the biggest area Amazon is scaling up with more than 5600 jobs, which translates to about 33% of all the open listings." Hey, kids, here's where future jobs lie!
Retail isn't the future for Amazon growth I guess, despite Prime's customer stickiness; it's building of warehouses; and its foray into brick-and-mortar stores.
For us, "The company is also making more diversified investments into logistics, cloud apps, and media: Amazon's recent forays into logistics and media foreshadow areas of new business interest. Amazon tends to invest mainly where it can make strategic partnerships. India-based Housejoy will help expand its reach in the region, and Twilio has partnerships with AWS." [source]
Amazon has a secretive R&D skunk work called Lab126, which is behind hardware hits like the Echo and Kindle (and Fire smartphone). Dabble Lab and Occam are independent skunk works that companies can hire. This type of innovative and creative thinking is needed especially in telecom.
Amazon CEO Jeff Bezos wrote a letter to shareholders that talks about Day 2 like it was death. Yet the letter gives a small insight into Bezos' decision making. Focus on results and don't let the process (or policy) become the thing to focus on. Make decisions quickly. Even if you disagree with a decision, commit to the project. Every day is Day 1. Think fresh. Look outside the company for ideas, concepts, practices and trends. Embrace them.
You can read the letter on Recode. And you should.
NYU Professor Scott Galloway breaks down how Amazon is dismantling retail. Although he notes it isn't just Amazon. We have too many malls. There is a trend in consumer spending on restaurants and experiences rather than things.
Why should telecom care about retail or even Amazon?
Amazon is going to be a big player in telecom outside of AWS and S3, with Chime and Connect and tools and whatever it cooks up with twilio.
The other reason to examine retail: see the demise so that it doesn't happen to your business.
Bezos and Elon Musk - in my book - are the two best CEOs in America right now. Learning more about how they make decisions can be helpful.
]]>At EC17, Amazon launched a self-serve cloud contact center. (Once again Amazon took software it created and used internally and made it a commercial product like S3 and AWS.) The partner for this was Twilio. This seems like a slight to Vonage, who owns Nexmo, a twilio competitor.
There is a rumor that Amazon is looking to buy Vonage. There was an offer from Oracle to buy 8x8, so there are folks outside of telecom looking to buy VoIP companies.
A couple of ITSPs, Skyswitch and RingByName, are offering integration with Alexa. Alexa makes a nice speakerphone. Again this is a nice marketing gimmick but it doesn't solve any real business problems.
Vonage's market cap this morning is $1.4B, the same as 8x8 whose stock price is more than twice Vonage's. I wonder how much longer these two companies can keep the machine of growth going. Keeping up 24%+ growth every quarter is a grind. It begs the question what happens when that slips to 19 or 20 percent? They probably won't be stand-alone companies at that point.
In some ways, Amazon is like Twilio; it doesn't want to be a phone company, but it wants to capture as much value in that space that it can without being one. It would be smarter for Amazon to buy Twilio, but the market cap is twice that of Vonage. What does that say about VoIP stocks?
]]>The real buzz came from Amazon that launched Amazon Connect - Customer Contact Center in the Cloud. GE Appliances is one of Amazon Connect's initial customers (and shared the stage at EC17 with them). Last week, they launched contact center tools. Before that, they launched Chime, a web conferencing app.
"Amazon Connect is a self-service, cloud-based contact center service that makes it easy for any business to deliver better customer service at lower cost," according to the website. It got a lot of coverage (telecomp and techcrunch, to link but 2).
Chime was launched in conjunction with Vonage who will be handling the consumer and small business market. Level3 partnered with Amazon on Chime for Enterprise, which partners will get to sell soon.
In both cases, Amazon is entering a crowded field with a self-service, low priced offering that hangs off of their massive computing infrastructure. It is mainly price disruptive, but that doesn't mean it won't shake up Wall Street which will re-adjust valuations for the likes of Cisco, Citrix, Genesys and Avaya.
GENBAND partnered with IBM Watson for AI chatbots in its Kandy wrappers. The Kandy wrappers are pre-packed programs like a customer service chatbot that can answer FAQs and detect when the caller is getting agitated. It then takes the call transcript and sends it to a live rep, who if all the back-end works would be able to take over the call in continuum. The demo was great. Implementation will be difficult, but I would like to see Florida Blue jump on board and give it a try because they have horrible customer service systems (maybe on purpose).
West showcased the new version of Spark with Hybrid Voice.
Sprint had a robot running around their booth but I don't know why.
Counterpath demonstrated its new capabilities for what was once just a softphone. Now there is a good amount of reporting and analytics on users and calls. One user experience across multiple platforms (phone, tablet, laptop, Mac, Android, PC). It layers on top of existing UC, so Broadsoft providers can get better reporting, analytics and user experience without having to upgrade their investment. Counterpath also added a Salesforce plug-in so that interactions inside the Bria app can be captured in a CRM record. And you get screen pops!
BTW, "Voice is still a customer's number one choice when dealing with a customer service issue." [twitter]
"Cloud computing: Are these the hurdles that trip you up? More companies are using cloud-powered services, but it's not without pain. Here are some of the common complaints." Interesting read on ZD.
One thing that seemed to be a theme: User and Customer Experiences Matter.
]]>In the business market, Alexa is integrated with Skyswitch, a Netsapiens softswitch operator.
Better Late than Never: Amazon's Unified Communications Starts with 'Chime' by Edgewater Networks.
Interesting look at Hosted PBX seat pricing at CP online.
Seth Godin asks, "Learn something new and difficult and valuable." Why? "There are people who can cut corners better than you, work more hours than you and certainly work cheaper than you. But what would happen if you became the person who was smarter, better at solving problems and cared the most?"
47% of jobs are at risk for being automated in the next 20 years (faster probably). The only way to stay relevant is "Solve interesting problems"; Consultatively Sell Solutions; and utilize Creative Thinking.
FTTH Council has changed their name to the Fiber Broadband Association.
Windstream is making big waves as it fights against industry consolidation that may make it less relevant. WIND complained about Level3 not paying its bills. Now they are worried that the mergers will strand small business during the TDM-to-IP transition. This is all gamesmanship to get concessions favorable to themselves.
BTW, no one wants to buy Cogent.
Stonepeak Infrastructure Partners has closed a deal to become majority owner of the data center and interconnection company, COLOGIX, which runs 24 data centers in North America. So the data center market is still hot!
]]>Avaya sold its networking business to Extreme Networks for a paltry $100M (It is about $200M in revenue). That $100M does not make a dent in the billions in debt that Avaya is trying to scrape off in bankruptcy.
HPE is acquiring Nimble Storage for $1B.
LUMOS is being taken private by EQT Investment Startegy for almost a billion dollars. This comes following LUMOS buying three data center from DC74 and Clarity Communications, a fiber operator in NC.
FirstLight Fiber's main PE owner, Oak Hill Capital Partners, has acquired Finger Lakes Technology Group in upstate NY to fill in its fiber route. The data centers, Cisco business and fiber network all go with FLTG to FLF. FirstLight recently announced similar transactions with Oxford Networks and Sovernet Communications.
Another RLEC was picked off by private money: "Hargray Communications has agreed to be sold to an investment group led by the Tom Pritzker Family Business Interests. Redwood Capital Investments and Stephens Capital Partners are also investors.
In other news, Amazon AWS launched some new Cloud-Based tools to help enterprises manage their call centers. They already built the tools for internal management of their own call centers, so now they are just leveraging more internal IT/tech for revenue.
8x8 is funny. They hire a banker and put up the for sale sign; then buy something. 8x8 acquired Sameroom, an inter-connection platform for various chat apps including Slack and Skype. ComputerWorld has a good article on the pivot of Sameroom and the 30 year history of 8x8.
Worth noting: "Today 8x8 introduced the world's first Communications Cloud, which combines unified communications, team collaboration inter-operability, contact center, and analytics in a single, open and real-time platform. The company also announced a number of new business application integrations, aimed at enhancing business workflows by making real-time communications, collaboration capabilities and intelligence available for third-party cloud applications, all customizable via an Open Cloud approach to fit individual enterprise needs." Note the words inter-op, analytics and integration. These will be the key to real UCaaS or UC&C or WCC (or whatever we call it next). These are the factors the separate the sale of UCaaS from Hosted VoIP. One is valuable, bringing productivity and business change. Hosted VoIP is just dial-tone replacement.
Today is International Women's Day! I am recognizing it by re-posting my Women in Tech prezo from ITEXPO and an article on gender diversity from Fred Wilson.
]]>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.
]]>Or they want a twitter or Linkedin strategy.
Or they want to increase channel sales.
I get calls all the time asking for a "cheap website guy". You realize that your website is supposed to be your online presence hub, right?
You realize that there is no "strategy" for a social network, right? You comprehend that twitter, LinkedIn, Facebook, Snap, Instagram, Pinterest, your blog - are all just publishing mediums that have replaced the billboard and the yellow page ad.
Mojo Marketing's CEO wrote a humorous take on this here.
All of this is tactics that comes under the umbrella of a marketing strategy. Who are you? Who buys from you? Product-Market fit. USP/Value Proposition. Why do they buy from you? Who is your ideal customer? These are the questions that create the foundation for that marketing strategy.
I know you want to sell to everyone, like you were Amazon or something. But that isn't necessarily who will buy from you. (And you aren't Amazon! And they started by just selling books.)
Partners have had to figure this out themselves. When you won't explain who buys from you, they segment you. You hate it but it is your fault.
Microsoft chases everyone but they do it with segmentation in sales, marketing and license bundle. Do you? Or do you offer up the same product for 1-1000?
And before you say that seems to be working: even a broken watch is right twice a day.
You wouldn't hire a software engineer the same way you go about hiring marketing.
I leave you with 3 Peter Drucker quotes:
"Business has only two functions -- marketing and innovation."
"The purpose of business is to create and keep a customer."
"If you want something new, you have to stop doing something old."
]]>Microsoft has been far behind AWS but then they started later too. This study shows that AWS has 45% share of public cloud infrastructure market -- more than Microsoft, Google, IBM combined.
Amazon launched a conferencing service called Chime.aws. They launched it with Vonage Business. Why? Unless the old Nexmo service is the back-end for the WebRTC voice and video and screen share. Vonage has 4 platforms - consumer VoIP; Vocalocity small biz; Broadsoft and Nexmo. I think they would have conferencing covered.
Amazon offers VPS and Hosting too. They also are a sales agent for Frontier and Comcast.
ABRY Partners owns StackPath which acquired Highwinds, a Florida based CDN company. StackPath will now offer secure CDN on top of firewall and DDoS mitigation services.
Dell announced that is unifying the Dell and EMC partner programs. Dell used partner feedback to make it simple, predictable and profitable. It is the best of both programs, says Dell. "It Preserves best of legacy Dell and EMC programs to reward partners who sell the full portfolio, including services, grow their business and win net new customers." One characteristic: "One deal registration program and a Zero Tolerance policy for deal conflicts."
Datto has acquired OpenMesh to further its pivot to be a premiere partner for MSPs. "The Open Mesh wireless access point and ethernet switching technologies will join the existing Datto Networking Appliance to create the Datto Networking line of products, optimized for small-to-medium sized businesses and delivered exclusively through Datto's global network of Managed Service Provider partners." I guess it will compete with Ruckus, Meraki (Cisco) and ADTRAn's managed wi-fi solutions.
In an interesting vertical move, "Evolve IP has partnered with Nimble Storage to provide healthcare organizations with on-premises Nimble Storage flash arrays, supported by HIPAA-compliant and HITRUST-audited hybrid cloud, cloud backup and disaster recovery solutions from Evolve IP." [channelvision]
]]>There are 2.5 billion smartphones on the planet now, according to Ben Evans.
"China now has 656 million internet users. Brazil trails only the US in total Facebook, Twitter and YouTube users, and the country has more mobile devices than human inhabitants." [TCrunch]
Google, Apple, Facebook and Amazon are 3x the scale of WinTel. Not just giants in tech, but giants in the economy as well. More so than IBM or WinTel. [mobile is eating the world]
Machine learning and AI are getting exponentially better each year.
Facebook has between 15-20% of mobile time. And smartphone apps are 60% of all time spent online in USA.
With Amazon Alexa and Google Home (and other voice activated search), what does that do to your SEO or PPC campaigns?! POOF!
There are "nearly 3.8 billion internet users worldwide, almost 2.8 billion are active on social media." The most popular social networks "as of January 2017, based on global traffic figures for unique monthly visitors, shows: Facebook (with 1.1 billion), YouTube (with 1 billion), Twitter (with 310 million), LinkedIn (with 255 million), Pinterest (with 250 million) and Google+ (with 120 million)." [channel partners]
"Cisco and DHL, the world's largest logistics provider, estimated last year that $1.9 trillion dollars of economic value could be created by the use of IoT devices and asset tracking solutions in the global supply chain and logistics sector." [business insider]
NOAA has a new satellite "GOES-16 has four times the image resolution of the existing Geostationary Operational Environmental Satellites (GOES) fleet." See images here.
SIDE NOTE:
That said, people who blame increased connectivity for widening ideological divides misunderstand what's going on. The world is not getting worse, nor are our divisions deepening. We've always had these problems - it's just that connectivity is bringing them to light. Racism, xenophobia, bigotry and sexism have always been there, it's just that we can see them more clearly now. This unprecedented, radical form of transparency feels scary and dark, because it forces us to look long and hard into the corners. But that's also why connectivity is so important. Billions of people are starting to speak out, and that means we are no longer able to claim ignorance, and filter out the terrible things that have happened on the watch of good people in the past. Welcome to the world as it really is, and not the way the gatekeepers used to tell us it was. It's about time. [Future Crunch 30]]]>
Google Fiber stopped over-building fiber to the home (FTTH) to give fixed gigabit wireless a chance. This isn't even 5G. This is current non-millimeter tech.
AT&T is trying to get BPL (broadband over power lines) to work with Project AirGig. Will it work this time? The power infrastructure is still pretty old/antiquated, ut technology has gotten better.
API isn't talked about like that. Integrations are. UCaaS as a stand-alone platform is not that impactful to the employee work day. Integrated with CRM, email and other work day applications is. [All About API is at ITEXPO.]
Intelepeer just announced a platform that integrates with Cisco Spark. Hope they demo that at ITEXPO.
The IDEA Showcase is Thursday evening. I always get amped at startup events because there is great energy (hope, promise, excitement) that we kind of lack in telecom.
If you like startup stuff, the week of Feb. 13 is Startup Week! Techstars runs that globally.
Channel Vision Expo is collocated with ITEXPO again. This is the first channel partners event of the year. And it is collocated with MSP Expo. Should be interesting because more and more referrals and indirect sales are making a difference for cloud providers. 8x8 notes, "New monthly recurring revenue (MRR) sold to mid-market and enterprise customers and by channel sales teams accounted for 60% of total new MRR booked in the quarter."
I don't understand Blockchain. (There I said it!) Maybe I will get a chance to see what that is about on the show floor next week as well at the Blockchain Event.
WebRTC is still a thing, according to Andy Abramson. We'll see as Real Time Web Solutions has a section of the ITEXPO as well.
Most of the noise in my email is about HPBX/UCaaS, SD-WAN or IOT. The IOT Evolution is happening at the same time in Ft Lauderdale but it is a separate show. Verizon, Amazon, Gogo, Sprint, T-Mobile, Cisco (but no AT&T) are speaking and/or exhibiting.
That is a lot of tech to take in at one time, but it also in one place. Where can you get that much info/demo/prezo in one place?
Some interesting stats from 451 Research Group.
Overall IT Spending vs. Cloud Spending. Cloud spending remains strong, and the growth rate continues to outpace overall IT spending. A total of 44% of cloud users expect spending to increase over the next 90 days, while 4% expect a decrease. In comparison, 38% expect an increase in their overall IT spending vs. 11% expecting a decrease.
Cloud Adoption. SaaS (64%, up 1-pt) remains the most popular type of cloud computing in use, followed by Infrastructure as a Service (43%, up 4-pts) and On-Premises Private Cloud (34%, down 2-pts).
On-Premises Private Cloud Vendors. The most popular vendor for on-premises private cloud is VMware vCloud (65%), with Cisco (33%) and Microsoft Cloud OS (30%) a more distant second and third.
Key Attributes. The most important attributes for on-premises private cloud vendors are Platform Reliability (66%), followed by Value for Money/Cost (47%) and Technical Expertise (36%).
If you are in Ft Lauderdale next week, let's grab coffee! Or join us for dinner on 2/7 HERE.
]]>The one thing missing from this cloud strategy: business model.
For all the talk about monthly recurring revenue, the commissions off cloud services are tiny compared with the time it takes to sell and support.
Even with the drop in uptime for carriers, the amount of support for network services is small. The sale is easy. The commissions are fair. High ROI.
Microsoft Office365 is starts at $60 per seat per year. That is a commission of fifty cents! If the client calls with just one support call, all of your profit is gone.
In network, almost all carriers deliver services as advertised. There isn't really a big trust issue with the customers. It's plugged in and usually works. Stays up most of the time.
The same can be said of PRI. But SIP trunks? That gets tricky with inter-operability, with porting numbers, with quality of service. There are so many providers that it isn't even possible to do an apples to apples comparison. Easier to sell POTS lines, in my opinion.
UCaaS has been notorious for porting problems; QoS issues; lack of user training; and deployment mishaps. Also, too many features, not enough pain for the buyer to move to what looks like a complex system. At ARPU of about $350, that is a lot to overcome to make a little bit of money. The SPIFF War that pays out up to 6X MRC is getting attention, especially if the partner can just throw a lead over the fence, let the ITSP close it and collect his $200 after passing GO!
The big impact from cloud is the integration. But who is going to do that integration? Who is going to come in and add the Zaps or the IFTTT? Who is going to script together the various pieces of software to get data to flow without swivel chair?
On a client call recently, they mentioned that many IBM A/S-400s are still in service. Those applications don't easily port to the cloud for a number of reasons. There are a number of software applications that won't easily port to the cloud. That's why we have the Hybrid Cloud strategy, right? Which just means that some stuff stays as is, some stuff goes to AWS/MS/IBM/Rackspace, some stuff moves to a private data center. (SD-WAN plays the part of making that network optimized for a hybrid environment, or as I like to call it the usual system.)
I'm not saying cloud isn't here to stay (see here). I am saying that the Business Model for Partners to be Cloud First has not become mainstream yet.
A good Cloud Engineer/Cloud Architect or a knowledgeable Sales Engineer are expensive full time positions. It would take a lot of large deals to begin to offset that investment in talent. There is a new skill set needed for cloud services that wasn't needed for managed IT services. New sales skill set too as the sale transitions from transactional replacement of services (cable for T1 or Ethernet for T1) to consultative selling involving business needs and impact.
"What we've found working with clients who want to begin taking advantage of the cloud's cost and accessibility advantages is that they will start new projects in the cloud, but will leave their legacy systems intact." To find these deals, you would need to be proactive in marketing your firm as a cloud expert (and actually have the chops to pull it off without burning the client and your reputation, which is a real problem that vendors don't want to address.)
Personally, I wonder about the economics of cloud. VDI, UCaaS, CRM and Office 365 are going to cost you ($40+$30+$100+$5) roughly $175 per month per employee. At 99 employees that is $200K per year. Seems like a lot, but if you are the partner and you get most of that share that is $20K per year in commission.
]]>