On Rad's Radar? - backup Archives

We Start the Year With Mergers

2013-01-02T17:54:03Z

Two Tampa companies merge "to create a Hybrid SuperVAR" (whatever that is). Vology acquired Bayshore Technologies. Vology is a hardware reseller. Bayshore Tech is systems integrator and will provide professional services for the combined company.

AVIS is acquiring ZipCar because (1) the economy is slowing and car-sharing seems like a bright spot, especially for the number ; and (2) Zipcar was a great entrepreneurial idea but a poor public company idea. Hertz is acquiring Dollar/Thrifty and Enterprise owns Alamo. This move will capitalize on the gradual decline of car ownership, especially in metro areas. Zipcar's technology will allow Avis to get rid of more people to be replaced by kiosks (like Alamo has). The VC's - including Steve Case's Revolution LLC which made $96M on this deal - are happy. Next up at the plate: Cars2Go, Flexcar, City Car and Car Share.

the third merger:

Imation buys storage systems provider Nexsan for $120 million. Storage is huge. Are you getting your piece of the pie by selling data storage??

HP has truly lost its way. Meg Whitman is right up there with Sprint's Hesse in CEO thinking. HP suing GM over executives that went to work at GM. Follow up litigation over R&D with this announcement: HP threatens to axe units that fail to meet targets. That will certainly motivate employees - NOT! HP used to be an innovation center. Now it just keeps throwing away assets. Poor management and an even poorer board of directors. Why isn't The Law Firm of Wohl & Fruchter looking into this level of fiduciary negligence by corporate managers?

Predictions for 2013

2012-12-19T19:15:00Z

CenturyLink Biz has an ebook out with predictions for 2013 and beyond. M2M, mobility, cloud - all just mind blowing stuff . It's prediction time obviously. Let me say that 2013 can go a couple of ways - DC gets its collective act together to improve the financial situation or it doesn't. The economy will swing with either path - good or bad. We have already seen layoffs and threats of more. The only positive I see is bankers actually being penalize for fraud. That said what is in store for 2013?

Well, the FCC's pace for any case is slow and slower, so they will likely not get to the copper clipping and IP transition until 3Q2013 at the earliest. meanwhile, CLEC's have to be vigilante to document cases of copper clipping, because all the money that they - Integra, Megapath, TelePacific, XO, Windstream - have invested in EoC doesn't work without said copper. I think they will be fine until 2014 on this.

That said, CLEC's have to accelerate their plans for OTT services like cloud and Managed IT. When the copper plant disappears, wholesale (from fiber providers and cablecos) will get expensive. The money will be in Layer 7. I have often said that it was going to be Layer 1 or Layer 7. Without a network that you own, it will be a fight for apps and services. Everything will look like Office 365 - where 42,000 Microsoft partners are selling it for very little margin.

Here's the thing: more businesses are moving to the cloud for so many reasons - mobility just being one of them. Some CLEC's, VARs and even Agents will migrate to a cloud services brokerage model. That will work for slinging Hosted Exchange, SharePoint, CRM, simple backup, even VPS. Network will become a separate sale and negotiation.

I'm still shocked that no one has rolled out vertically based integrated bundles yet.

So mobility will still be huge in 2013, but with the new shared data plans, the monthly bill will be increasing, so businesses (and consumers) will be looking for alternatives. Wi-fi will be significant. When you add in mobile data caps and consumer cable caps - and metering - there will be a net effect on cloud services and OTT services.

When you examine the backlash yesterday on the Instagram privacy gaff (right after Facebook finished acquiring them for $715M), you have to wonder how much longer the online phenomenon continues. Privacy is non-existent. You have to be off-the-grid and paying with cash to be beyond corporate and government spying. I think we will see a little more backlash in 2013 - enough that FB and other companies see a dip in usage and corresponding advertising sales. Have FB and twitter peaked?

The companies to watch in 2013:

RIM and Alcatel because they are re-inventing;
Avaya because of its crushing debt;
Bright House due to its Telovations acquisition and to see if it is the first cableco to chase business outside of its region;
8x8 and similar OTT Hosted PBX players like FreedomIQ;
the Cloud Communications Alliance, especially the members who have not been acquired yet. If Hosted PBX doesn't explode in 2013, it never will;
Sprint because Clearwire+DISH+Softbank = a big ugly mess with Hesse;
Verizon but specifically its OTT hosted PBX service, VCE;
Dell as it continues its shift to cloud services from hardware;
Tech Data - between TDmobility and the Microcorp deal - 2013 will be telling;
AirWatch since MDM is huge and they are being sued;
Master Agencies that have to figure out relevancy in 2013.

For Agents and VARs, 2013 is the year they have to put a plan together. No more waiting. Too many VAR's are already jumping on the telecom/network bandwagon and not nearly enough Agents are jumping into the Managed Services and Cloud space. For Agents, 2 resolutions for 2013 would be (1) partner with a VAR or two; and (2) cross-sell services to grab more of the total wallet share of your customers. Look to revenue per customer and lifetime value of each customer as the most important metrics. (Mainly because they are.)

For VAR's, they have seen some big changes from Microsoft - Small Business Server's end of life as well as the way Office 365 was sold. VAR's also witnessed CLEC's - like Cbeyond and EarthLink - make a big splash in launching managed services and cloud offerings. In 2013, VARs will need network/telecom to make up for the revenue dips. Locally in Tampa, we have seen some Microsoft partners go to programming and integration services in place of the old model of SBS and Exchange. For all of cloud adoption, Integration is the key to any business process outcomes. There aren't nearly enough programmers to do all the necessary integration.

In the Google world, there are companies making money supporting and integrating Google Apps. Backupify, Batchbook, Insightly are just 3 companies that integrate with Google Apps for CRM and backup. As this ecosystem becomes more complete, Microcorp's deal with NeoNova could prove brilliant.

It is this type of package or bundle that most businesses want. Do they want stand-alone Hosted Exchange? Notsomuch. They want a complete package of inter-working software - the Hosted PBX integrated with Outlook and the browser - like they have on their smartphone!! It confuses me that the smartphone is more integrated than a laptop, Mac or desktop.

They want their CRM to integrate with all of it too. If Xobni can pull in all that social data, why can't a plug-in for CRM?

It's this complete solution that is needed. No idea what company will roll it out first or if it will be in 2013.

Cloudy Math

2012-12-11T03:10:14Z

There is a lot of talk about the big money that Agents and VAR's can make if they just switch over to sell Managed Services and Cloud Services. Here are some facts about cloud.

M5 had the highest ARPU (average invoice per customer) when ShoreTel bought them - at $2000. Most other cloud communications providers hint at lower ARPU - maybe around $1000 per customer. However, 8x8 and Cbeyond are public and their cloud ARPU sits at between $200 and $250.

When you examine the "cloud services" of many carriers, it is just Hosted Exchange, Sharepoint and maybe some backup. That's $9 + $10 + $20 = $39 per user per month. Add in a Hosted PBX seat at $30 and you are now at $69 per month. For 20 employees, that's not a bad billing invoice for Agents, but it is also an unlikely sale. What small business will pay $1380 per month for phone and email? A PRI at $550 plus maybe $100 for the PBX lease and $50 per YEAR for Google has you covered. Add in some Dropbox and Bingo!

This isn't to discourage you. It's to put a pin in the hype balloon, which is starting to annoy me.

You will have to sell upmarket. There are 83K businesses in the US with 100-499 employees, according to the 2009 US Census (the last year data is available). With 1000 cloud service providers in the US that will be a fun Red Ocean to swim in.

There are only 17,500 business with more than 500 employees. That 's the spot you would like to sell in but you would need to be connected or a white elephant hunter.

That leaves Agents chasing 20-99 employees - since that is a majority of the businesses in the US. Let's call the average 40. If you sell that business the full boat: Internet, Hosted voice, email and backup - the ARPU is worth it. The sales cycle will be longer. The deployment will require more input and project management than Agents are used to. (In fact, it is more than most carriers have ever had to do!!!) Post-sales support will also be required. So overall, it is a lot more work for a stickier client with more ARPU than you are used to. Are you up for that challenge?

Let's go back to the 8x8 example at $256 of ARPU. That's about a 9 employee shop. So you sell them 8x8 voice, cable modem AND another broadband service (like DSL or 4G or fixed wireless). You offer them Google Apps for SMB via NeoNova for some small change. Add in some Mozy Pro back-up (or Carbonite or other backup service that pays you). Next you try to get the cell phones - there has to be a couple that are corporate owned -- for a few more dollars. Don't forget the 4G data plan.

So you wrapped up the Internet Access, mobility, voice, some DR (disaster recovery), backup, email and office suite. After that, what software do they use? How about Conferencing? Do you see? You have to grab the whole wallet (or you can't make much money).

It has to become a lot like McD's. What do they do? A call center hits you first in the drive-thru with, "Would you like to try our ______ special today?" No. "okay. Order when you are ready." But don't forget "Do you want fries with that? or can we Super Size that for you?" It sounds cheesy but you are going to have to do it.

CenturyLink, XO, MegaPath and quite a few other carriers offer transit, Hosted voice and cloud services. It will all be on one bill, with one carrier to blame, with one throat to choke. It makes it easier to sell --- check boxes on an order form or site survey.

You better hurry because the MSP's like MindShift and others are already out there doing this.

When you consider that Parallels AS platform allows hosting companies - like Intermedia.Net - to sell, bill and deploy these services (Hosted PBX, email, storage, office) with a click on an online order page, spend this month - the last month of 2012 - deciding what your plan is going to be for 2013. While I hate the hype, many of your competitors are already targeting your customers. Selling them a T1 will be easy after they sell them VDI or backup or Hosted PBX. Then what do you do?

Again, you have to do it but I wanted you to have a realistic view of what it was going to be like. You have vacuum up the services - all of them - heck, sell them office supplies if someone will pay you for it! Managed Print anyone ;)

Talking with the CMO of 8x8

2012-06-25T22:29:53Z

8x8 has hit $100 million in annual revenue, making them one of the top 3 Hosted VoIP providers in the US. I had a chance to interview Debbie Jo Severin, Chief Marketing Officer of 8x8 this week.

My first question was about what kinds of marketing 8x8 does. (I didn't know that the Packet8 brand was no longer in use.)

Severin replied, "First, we no longer market or use the Packet8 brand. Packet8 was a sub-brand created by 8x8 to market our residential and early business service offerings. In 2009, we eliminated the Packet8 brand, shifted our focus to the SMB market and began marketing our business services as 8x8 cloud-based business communication services.

RAD: Packet8 was a big sponsor at ITEXPO and on the TMC communities for a while.

Severin: "We have worked with TMC for a number of years. Today, we sponsor two hosted/cloud-based contact center communities and advertise with them. We employ additional marketing programs including:"

Brand advertising: We have advertised in the Southwest Airlines Spirit Magazine for 4-5 years. You can find us there with a full-page ad. We have sponsored outdoor and radio advertising in the San Francisco Bay Area. We also sponsor online banner ads with the likes of TechCrunch and Google.
Direct Response: We do a lot of online direct response. So, you'll see us in various pay-per-click sites with the largest being Google.
Content Syndication Sponsorships: As with many companies in the tech sector, we participate in various content syndication programs where our services are promoted.

RAD: That's a good variety of tactics. Recently, I noticed that 8x8 has Enterprise sales people. In what way is your marketing to enterprise accounts different than to the small business space?

Severin: "Well, the Enterprise space has a much longer sales cycle. Typically, it begins as a project that is approved for the fiscal year under the direction of the CIO or IT Manager. In this case, the key stakeholders are likely doing research on their communication and collaboration options months before deployment and have very specific objectives and pain points to address. They may even issue an RFP to the short list. So, since we need to be in the "conversation" early during the research stages, we've approached this in 3 ways:

Content Syndication and content relevant sponsorships. In this case, we have developed content or sponsored content that might appeal more to the mid-market business segment (e.g., papers that might address ROI for hosted solutions versus Premise alternatives).
Engaged in CIO Forums where 150-200 CIOs come who have been identified as having a budget and project that would align with sponsors like 8x8. I liken it to a type of business "speed dating".
Work with Channel Partners who already have relationships and are engaged with the mid-market and enterprise businesses. They are extended feet-on-the street. We launched a very compelling Channel Program that bridges up-front compensation with on-going residuals. It is quite lucrative and bridges the transition that is occurring for VARs who are used to up-front payments for premise/box sales. We think our program helps minimize their cash-flow risks as they adopt cloud-based services.

RAD: Are marketing and sales separate departments or one umbrella?

Severin: "Marketing and Sales are closely aligned. However, Marketing and Sales are organizationally under different executives."

RAD: What would you attribute the growth in business revenue year-over-year "Revenue from business customers increased 44% year over year to $22.8 million."?

Severin: "8x8 has a very reliable and scalable service that has been proven in the market. We are currently the largest provider (in terms of number of seats) for hosted-PBX business services. The service is robust, feature rich, at a great price, from a company that is focused on the customer and execution. Our recent purchase of Contactual further expands our reach with a hosted Contact Center service, bringing a full-range of services of our small-to-medium sized business customers."
"The market is becoming more comfortable with cloud-based services and the technology has come a long way in the last 5-8 years. So, we think we're just at the beginning of the adoption."

RAD: At $100M and over 200K seats, 8x8 is one of the largest Hosted PBX providers in the US. Most of the thousand VoIP companies are sub-$10M. Who gets more credit: marketing, direct sales or your Channel?

Severin: "Our channel isn't big enough yet to get the credit for where we are. But, we expect they are key to where we're going. As to the question of credit, I would say it goes to everyone at 8x8. We have a strong Engineering team with 79 patents. They have developed a great service that customers appreciate. We have a Customer Support organization and Network Operations team who help our customers and provide reliable service. Great Marketing and Sales can't make a company grow if you can't deliver on your promises."

RAD: Thank you for your time. I appreciate it.

Next up is an interview with a Master Agent and a sub-agent who sell 8x8.

My Favorite CRM Gets J2'ed

2012-06-25T16:30:15Z

There is a CRM system that comes with dial-in help (as the Optional VIP Sales Assistant Support of the Gold package). That's right! Salespeople can call in to an assistant that will type in the info and ask for whatever info they need from the CRM system. It's called Landslide and it was just acquired by J2 Global which owns eFax.

CRM only works if the salesperson uses it and works it. Landslide has a lot of nifty features including social CRM which means that it can integrate data from Twitter, LinkedIn, and Facebook directly into their Contact profile. It integrates with QuickBooks, GoToMeeting and an email marketing module.

J2 Global has been adding to its portfolio for a couple of years by buying up Internet fax competitors. J2 now offers more than just efax. It sells virtual phone (like Google Voice), hosted email, email marketing (like Constant Contact), online data backup and kind of a unified communications system that is like Grasshopper Group or Phone.com. Now CRM. They have put together a nice catalog of cloud services for the SMB space. No idea how integrated they are though - or if they are just stand-alone apps.

Dell Gets WYSE

2012-04-02T16:30:19Z

Dell announced that it is acquiring WYSE today. WYSE is known for its dummy terminals, particularly for POS (point-of-sale). WYSE also has gotten into desktop virtualization - not that strong a leap. Wyse has shipped more than 20 million units and has over 180 patents, according to the press release. This acquisition "extends Dell's desktop virtualization capabilities and drives attachment of enterprise solutions, including servers, networking, storage and services."

The other piece is that WYSE has 3000 partners. Too bad a CLEC didn't think to buy it just for that new channel.

Dell is an interesting company because while it is known for hardware - PC's, tablets, gadgets and servers - Dell is making the move to cloud.

__PLACEHOLDER__

Going back to December 2010 when "Dell announces the acquisition of the cloud-based medical archiving leader InSite One to help healthcare organizations simplify retention of healthcare data." The PR says, "Additionally, like Dell's recent acquisition of Boomi, this acquisition builds on our strategy to help customers take advantage of the economics and scalability of the cloud in the way that best fits the requirements of their industry and the needs of their business." So while Dell chases the Cloud, it seems to be doing it in a hardware-services model. In other words, VAR's are used to selling hardware and wrapping one service around it. Dell is still doing it. InSite One was image archiving for medical - basically, managed storage.

Storage - like InSite One, Compellent and EqualLogic.

Networking: Force10 Networks and SonicWall. Both also spill over into Security in the managed security segment, which falls in with Dell's SecureWorks and KACE divisions. Security is supposed to be a big game to be in. Dell is buying into that space. I wonder how many VAR's it picked up with Force10 and SonicWall... 1000?

Next, AppAssure backup and recovery was an obvious move to become more of a managed services provider -- or to empower its VAR's to become MSP's. That might be the strategy: empower its VAR's to become MSP's all through Dell services (and hardware).

This puts Dell directly in competition with the VAD's - Ingram, Tech Data and SYNNEX. Who will get the attention of the VAR?

And to tie that strategy of a VAR becoming an MSP is the announcement that Dell Offers Partners 'Cloud Services & Solutions Certification'. That ties the MSP bow up.

I Can Do It Myself

2012-03-06T14:37:09Z

I hear this all the time: "I can do it myself!" Backup solution? No, I'll build one myself. Outsource your email? No, I can run my own email server. White-label VoIP? Nope. I'm going to spin up an Asterisk box and use that.

You think I am kidding, but I'm not.

Yesterday it was: We needed to re-do our Broadsoft portal. After shopping around, we decided to build it ourselves.

It makes me wonder about a couple of things:

Are you a hobby or a business? A hobby is when you like to tinker with technology. A business is something else.

Do you know what your time and effort is worth? It takes a lot of time and effort to build a solution, maintain that hardware and software, and support it. Add in licensing, backup, redundancy and security to that budget number. Factor in that while spending your time and effort on Building Your Own, you could have been doing something else -- some other priority, some other revenue generating activity, or personal time.

There is always a debate about buy versus build. There are many reasons to buy: faster to market, outsourced skill and support, no CAPEX, knowledge base, etc. Yet there are reasons to build: you want more control, special features, proprietary, etc.

In today's world, where most service providers don't market very well or brand themselves (or their servcies), buying is the way to go. Why? It isn't about you or what you want. It's about your customers and what they want. It's a speed to market. It's about capturing wallet. And you can't do all that by yourselves. You just can't.

When I examine VDI, VoIP/Hosted PBX, UC, backup and conferencing, there isn't any special sauce being pitched. To the marketplace, it's one big nosie box about the tech and its features. That's why it doesn't sell fast and that's why you don't have to spend the effort building your own (in my opinion).

Can you put a competitive service together that your customers will be happy with in the most efficient manner?

Don't look at the cost (unless you factor in your time saved), look at results.

What Else Are You Going to Sell?

2012-03-04T23:44:40Z

TDM is running out of runway. Agents have already switched to selling Ethernet, MPLS and SIP Trunking. What else can they be selling?

Back-up, like Conferencing, is a cash cow that Agents just don't sell. From archiving email per federal regulations to backing up laptops, smartphones, databases, customer records, billing and more "in the Cloud", online backup service isn't much different from Google (see Chrome ad) or Apple iCloud. Access to everything you need through an authorized device attached to the Internet is the beauty to Cloud services, but backing up data is vital to business continuity. How long can a business run without billing records or a customer database? Not very long. Think how flummoxed you are when you lose your contacts in your smartphone. Imagine that contact list was your business. That's why backup is important (to your customers). VAR's are already selling different versions of online backup: their own; a white-label from Remote Backup, DriveHQ or LiveDrive; and a resell of Carbonite (who is hugging Agents right now) or Intronis (who loves the Channel) or Anxient or many others. There are some like SugarSync or Mozy that backup your smartphone and your laptop to the same account.

Managed Security - most of the CLEC's (XO, EarthLink, Netwolves, Integra, Cbeyond), the RBOCs and the ILEC's (Windstream and CenturyLink) offer some type of security offering, usually Managed Firewall, IDS (Intrusion Detection Service) and Network Monitoring. As more data moves to the web (Cloud), security will become even more significant, in the form of email and application security, encryption, event and log management, and mobile device management. For example, Reflexion provides hosted email security, archiving and encryption services exclusively through the channel.

Hosting and email services - everyone has a website or blog; everyone has email. Why shouldn't you be offering those services too? XO started out as Concentric Network, a hosting company. This was Cloud before it was called that. XO sells Hosted Exchange and website hosting. Megapath just rolled out the Microsoft suite. Intercall offers Live365. It isn't big dollars, but it is a place to get your feet wet in Cloud and apps.

Managed IT - remote monitoring of servers and desktops - is a VAR service powered by software like Autotask, Connectwise, Kaseya and GFI MAX. As businesses are essentially dependent upon computers and technology to do business, managed IT services become an option when skilled technical support staff are too expensive, churned or unavailable.

A step past, Managed IT is the remote desktop - aka Desktop-as-a-service (a term I dislike) and VDI (virtual desktop infrastructure). In 1999, Wyse terminals were going to replace desktops for efficiency. It didn't happen (except in the POS space.) Now we are trying it again. MSP's offer this service - with a big fat helping of bandwidth. There are big names in this space, including Citrix, VMware, and Microsoft. There are also a number of providers, like IIS Group, who provide VDI through the channel. Navisite, which TWC owns, just chose Desktone as its DaaS partner.

Next to DaaS is HaaS, or Hardware as a Service. Don't ask me how this is different or how it isn't just leasing. Ask Chartec.

There are issues with selling cloud services - like the service provider's (SP's) financial position; redundancy and resiliency of the SP's architecture; SP's ability to scale in terms of on-boarding new customers properly and scaling tech support for end users; the end users' experiences as cloud services will change some business environmental factors; and licensing issues.

That being said, Agents should be surveying their current customers about the needs outlined here. Why? To get a bigger share of the customer's wallet.

Another way to look at it is: the customer is going to shop these services like he shops T1's, broadband, and voice. He might as well pay you to shop them for him, like he does for the telecom stuff. Get in there!

If you liked this, you might like this blog post too:

What about selling Cloud

One addition, I interviewed VAR Dynamics (local boys from Tampa) at ITEXPO. VAR Dynamics is a private-label Software-as-a-Service (SaaS) and Cloud business apps provider selling exclusively through channels. Apps include Microsoft Exchange, Microsoft Dynamics CRM, Microsoft SharePoint, Zimbra, BlackBerry BES, email encryption, email archiving and more. There will be cross-over in what a provider sells. Just as VAR Dynamics sells the Microsoft software and email security, CLEC's that you are already familiar with - like XO and Cbeyond - offer a variety of services to sell deep into your customers.

A Fun Chat with VAR Dynamics

2012-02-01T05:51:08Z

It started out coincidentally as VAR Dynamics CEO, Tony Francisco, was on my plane this morning. And he just recently moved from Silicon Valley to Tampa Bay, where I live. He is working with Gazelle Labs and spoke at BarCamp Tampa Bay, which is an un-conference I co-organize for the last 4 years. I had to go to Miami Beach to talk to him though. Go figure!

VAR Dynamics is the geeks in the cloud that run the servers that run the software that VAR's and service providers then re-label and sell to end-users. Back in the day, they would be labeled Master MSP as they enable MSP businesses. I called then an MSPE - a managed service provider enabler. Tony disliked that immediately. They are like the VAR Viagra - get them up and running on the Cloud in a day, fully turn key and automated through the magic of open API's. Tony didn't like that either, but his VP of Marketing, Darrek Porter, a man who was in politics once upon a time, did. This system allows VAR's to consume and re-purpose cloud apps in a self-service atmosphere.

I like it when the discussion is lively, more like buddies chatting over coffee than telling me your talking points. VAR Dynamics has almost 200 partners, which include telcos, VAR's and MSP's. What's the difference between VAR and MSP? Mainly mindset. Break/fix versus MRR (monthly recurring revenue).

VAR Dynamics white labels a lot of Microsoft products like Exchange, Sharepoint, CRM and soon Lync Lite. They also white label Blackberry Enterprise Server and Zimbra. Why Zimbra? "For those that don't like Microsoft." They have add-ons like archiving and "Compliancy", which means help complying with the myriad federal regs like PCI, HIPAA, GLBA, SOX, etc.

Francisco did name drop Autotask, ConnectWise, Jamcracker and Reflection as current or future partners -- again through the magic of well coded open API's.

Are you a company with a base of customers looking for MRR - "and control of their future"? Then VAR Dynamics wants to talk to you.

How do you control your own future? By selling white-label services, you are the provider - no carrier deciding that the bottom looks better when they stop paying commissions - so the monthly commission isn't going to get cut off, unless the customer leaves you.

End Caps

2012-01-21T14:49:32Z

This was the week that we learned that online protesting can work -- if enough people get involved and if you get the support of some powerhouse websites like Google and Wikipedia. It looks like SOPA was dropped and the vote on PIPA was delayed. (It is still alive due to Democrat lawmakers who are beholden to Hollywood like Florida Senator Bill Nelson. If he knew how to turn on his laptop by himself I could understand it, but come on!)

We don't really need any more copyright laws. If we did, would the feds have been able to fly to New Zealand to arrest the owner of MegaUpload? What was he arrested and renditioned for? Online piracy.

Not for nothing, but don't we have more important things to be spending federal dollars on? We are a nation with lost priorities.

And yet another carrier joins the CLOUD: "US Signal recently released an Infrastructure as a Service (IaaS) product offering, what US Signal calls Managed Data Center. Customers have increasingly requested US Signal to host their applications, for financial reasons, scalability, security, and more."

Yesterday, TCA held its monthly agent webinar with Netwolves presenting on Managed Services. With most of the telcos offering Managed Servcies, we at TCA thought it was time to give an overview of what Managed Services are from carriers, who is buying them and how does an Agent sell them. How does an Agent start that conversation with the prospect about managed services? The webinar was recorded and TCA members can play it back at any time.

Nemertes Research predicts a shortage of colocation space in the U.S. beginning this year. That is likely because some colo space is being used for PAAS and IAAS. Also, some colo houses don't want to sell colo any more because there is more cash in xAAS. (Or so they say.) I have seen that trying to find single rack colo slots are getting more difficult. Personally, I thought that when Amazon, Facebook, Google and others built their data centers, a lot of space would be opened up in other data centers.

The other issue with colocation is that Equinix, InterNAP and now Savvis have cut the channel out of selling their space. Other data centers - like Vegas' SwitchNAP - are difficult to deal with. That kind of affects colo sales, too. Luckily, ViaWest and TELX are still agent friendly.

Code 42 Software, a cloud backup service named Crashplan, got $52M in funding from Accel Partners. It seems a massive amount of funding for an online backup company.

Is 5G around the corner? Heck, most of the US is still in 2.5G-3G land.

Trouble at Vu

2012-01-12T21:09:35Z

Got an email that VU dumped their entire sales force this week! The email went on "They are in dire financial trouble and their CEO is facing prison for insider trading for his sale of his stock as CEO of Zenith Infotech prior to their sale to Summit Partners."

Not sure how accurate it is but Vu TelePresence is part of the Zenith World Group of companies. Summit Partners put some of their capital into Zenith Infotech spinoff, Zenith RMM, a remote monitoring service. The cash infusion was necessary because in 3Q 2011 Zenith missed a bond payment which sent speculation that the company was in trouble. The company says everything is fine and the cash will be used for acquisitions.

I don't know. "Today, nearly 3,000 MSP partners use the Zenith RMM platform to manage almost 400,000 endpoints." Do the math: that's about 133 endpoints per partner. How much can that bring in? Many Master MSP's have changed their business model because it takes scale to make money running your own NOC and being a wholesaler of service. But also that same scale can kill you -- too much payroll to make a profit. Zenith RMM recently changed its name to Continuum, probably to distance itself from the legal entanglements of its parent.

Zenith Infotech had a bad quarter too. "The depths of Zenith Infotech's financial troubles are becoming clear in its latest quarterly earnings statement, in which it posted a year-over-year loss due to declining sales and unstable foreign currency exchange rates," according to Channelnomics. Apparently, quarterly revenues in USD are about $10M and the sale of RMM was about $8.7M. I don't know how VU Telepresence fits into this picture. I do know that undercutting your price to take market share requires deep pockets and that's what VU was doing against Cisco gear. Lower price means less revenue and virtually (get it?) no profit. That doesn't help your cash flow issue. And all this press doesn't help you gain partners to sell more of your stuff.

3 Things Agents Need to Look at in 2012

2011-12-30T21:14:19Z

It will be a busy year in 2012 as all the carriers try to synergize their mega-mergers and get their back-office in order so that we can actually place orders.

Besides selling the traditional circuits - POTS, T1, SIP, PRI - there are some interesting things for an Agent to look at in 2012.

M2M is growing. We are seeing that the 3G/4G system is creeping in everywhere - from broadband backup systems to surveillance systems to fleet management to home healthcare monitoring to security monitoring. There are an unlimited number of ways that devices and the wireless network can interact. Think about the Kindle. There is money to be made in M2M.

More wireless but mixed with TEM. If you haven't moved your big accounts to TEM, 2012 may be the year you think about it. Auditing has increased in the last two years as governments (local, county, state) and medium businesses look for ways to reduce the ever-increasing telecom bills. (Cellular/3G/4G is big and growing, which is increasing the total cost of telecom spending.) Telecom Expense Management (TEM) can help accounts that spend more than $5K per month. It also makes the Agent the point person all the total telecom spend. It's a great way to become vital to the organization.

In addition, you can add Mobile Device Management. If a company has more than 250 employees, it likely needs help tracking laptops, data cards, cellphones and the like. There are software platforms for this to make an Agents life easy. This is yet another way to become integral to a clients business. Notice I'm not suggesting selling cellphones, but manage those assets for the business.

Lastly, there is Cloud and Managed Services. I'm going to skip cloud unless you want to sell apps to businesses. If you sell within a vertical, I would suggest that you certainly start selling apps into that vertical, because it will add revenue for you and make you the go-to person for all things IT and Telecom for that Vertical!

In Managed Services, we are seeing a few trends: hacking is increasing; security is lax; IT is pervasive in today's business environment but there is not enough money or staff to handle it all. That's where managed servcies comes in. If the company has a lot of empployees and a small IT staff, managed servcies would be a fit. Things to ask:

"What task would you like to relieve yourself of?"
"What routine task could we outsource to your ISP to free up your staff's time?
"You are consuming a lot more bandwidth, what are you doing about firewall and other security?"
"How are you tracking wireless spending and devices?"
"What would you do if a company laptop was stolen or lost?"
"How much private company data is on a smartphone or laptop? How much access does either device have to your network?"
"Do you backup your data regularly and off-site?"

You have to adjust for the changing times, unless you just want to push pipes. But your customers are under a strain to handle devices, billing, auditing, tracking as well as security and more. You can make some extra money -- and become more than just a sales guy -- if you move beyond the pipes and help your customers with the rest of the story. HUH? They buy those pipes from you for a reason. Help them with that.

Happy New Year!

Is All Broadband Going Metered?

2011-12-05T20:56:30Z

Many rural fixed wireless ISP's meter their service for network management and costs reasons. The spectrum is finite, which means that wireless ISP subscribers can only get a set amount of bandwidth from that tower. The backhaul from the tower would be the other limiting factor.

In cable systems, the backhaul to the neighborhood is the bottleneck. The next bottleneck is the Internet gateway - how big is the pipe to the Internet that the cable system uses locally (and just how congested is it).

The DSLAM is the bottleneck for most neighborhoods. And the backhaul is the next bottleneck. It's tough to backhaul a 48 port mini-DSLAM with 2xT1, but it is done. Often.

As you have seen on the commercials, VZW and Ma Bell limit your mobile data to 2GB and 5GB. Sprint does too, except on your smartphone, but according to reports today, will be stopping that practice and moving to caps as well. T-Mobile has caps.

Ma Bell and TWC both trialed caps on consumer broadband. Supposedly this bombed but we know that Comcast and others have bandwidth caps for consumer broadband.

Now CenturyLink is capping DSL. CenturyLink is announcing the following Excessive Usage Policy (EUP), which will become effective in February 2012:

CenturyLink's EUP applies to all residential high speed Internet customers and is only enforced in the downstream (from Internet to customer) direction. Video services provided by CenturyLink PRISM™ TV are not subject to the usage limits. The policy has the following usage limits per calendar month:

• Customers purchasing service at speeds of 1.5Mbps and below, have a usage limit of 150 Gigabytes (GB) of download volume per month.
• Customers purchasing service at speeds greater than 1.5Mbps, have a limit of 250GB in download volume per month.

This will be one more pinch point for the consumer. Consumers are streaming music, movies, TV, living on social media, and sharing media with their friends. Stores this holiday season are selling TV's and DVD players that are all Internet-enabled to stream GoogleTV, Netflix, HuluPlus, Pandora, YouTube, CinemaNow and more. (Heck, you probably read my rant about all the buffering I go through with BHN.)

Not only that, so many tele-workers are using consumer broadband from home, working in The Cloud (so to speak).

VoIP, web/video conferencing, Skype, Citrix and virtual desktop, VPN and security wrappers, CRM, backup, virus and software updates - that cap will be hit quick in 2012.

The funny thing is that most of it was poor planning on the network operators part. And because they are a slave to The Street, who still see telcos as rate-of-return dividend checks, the consumers will get pinched. So too will providers, when the consumers find out that the backup or the VDI app or whatever is costing them $10 extra a month, it's out. Watch.

Lessons in the Cloud

2011-09-12T22:02:57Z

One of the great lessons in the Cloud is how do you sell it?It all comes down to the messaging (marketing or story you are telling) and the sales approach (or technique).

Sitting with Jeff Uphues of Cbeyond Cloud today at ITEXPO, we spoke about the lessons that Cbeyond has learned about selling cloud services.

Cbeyond has 800 direct sales and about 2000 channel partners, who are taking their Cloud Services to the marketplace – not just in their 16 markets but nationwide. (Cloud can go anywhere there’s decent Internet access.)

Zane Long is the Channel Head at Cbeyond who has been responsible for making it easier for channel partners to do business with Cbeyond. Making things simpler and easier is the key to Cbeyond Success. By assisting channel partners with collateral, messaging, and sales tactics, Cbeyond has enabled their channel to grow ARPU. (About $200 of ARPU for the cloud customers above the telecom spend.)

As Cbeyond makes the transition from CLEC to Cloud Provider, the barrier to sales has been the messaging. It’s very challenging to talk to a business owner about PaaS or Iaas or bytes, RAM, GB, and CPU cycles. Let’s face it: who understands that? More important: Does the buyer care? No. What do Business Owners care about? Her business, profit, assets, customers and employees. The buyer does not care about IT or technology. The buyer just wants the technology to its job. (Frequently that’s why businesses hire VAR’s or MSP’s).

The other key for Cbeyond is disrupting the current model. So while they sell three figures of PBX units per month, the new pricing scheme will create some friction in the marketplace as PBX sales migrate from per seat to company size pricing.

Keep an eye on Cbeyond as they move further into cloud and the CLEC (Access) piece becomes less the focus.

A Failure to Communicate

2011-04-06T18:01:07Z

In the Agent space, many non-telco vendors (like Conferencing and Hosted PBX providers) have tried to get traction. Sales traction from this independent sales force. It isn't going well.

Agents (and VAR's) spend about 80-99% of the work week in the comfort zone. That is, doing what they have always done. Selling what they have always sold. Selling the same way they always have.

Growth only happens in the Dis-Comfort Zone.

So providers have asked to co-market to the VAR or Agent client base. Maybe that happens one time. Maybe the results are "not worth it". So it doesn't happen again.

What's the Problem?

Well, Marketing requires Repetition - Not One and Done. There are 4 factors for marketing: list, headline, offer and repeat.

It could be that the Value Proposition for the new service (could be conferencing, data backup, efax or whatever) doesn't resonate with many of the targets.

One problem with Cloud is that it's too generic. It needs to be sold as a package aimed at a set vertical. For example, a premium Dental Office Bundle of DSL, 3G, mobile, credit card processing, data backup, EMR, dental practice management, invoicing system and payroll which ends up being a Dental Office in a Box.

That is easier to wrap your head around as both an Agent and a Customer.

Take Retail. Legacy New Edge Networks (now EarthLink Business) was very good at selling to Retail on its branding of PCI Compliance. The VAR or Agent can reduce churn and increase residuals if they sold a package of other services down that pipe. Attached to the NEN AX Platform are companies offering payroll, Hosted PBX and more. (I'm not sure how Agents make money on that, but it is a private connection via MPLS to the AX Platform.

What if payroll, Network DVR, a point-of-sale system, credit card processing, web conferencing, email, Blackberry service were added to the MPLS service along with 3G backup and cell phone service? The client gets one stop service for all its business application needs; the carrier gets a sticky customer with big ARPU (even though a percentage of it goes to partner companies); and the Agent or VAR gets paid on a bigger ARPU.

Plus now the Agent and VAR understand how Cloud and Apps and SaaS can affect a sale and a customer relationship. Something that has been disconnected before.

Next you have Unified Communications which has a similar disconnect for Agents and VAR's. Agents used to selling T1's and Ethernet and VAR's selling switches and servers don't have any of the UC components on their radar.

In this webinar with XO about the UC Sandbox, we talk about how UC is just a bunch of components to help any company communicate with employees, customers, prospects, partners and vendors. For UC sales to take off, the idea of the UC Sandbox has to get granular with very specific examples.

We will need case studies in print, podcast and video that are short but concrete about how a jewelry story benefited from UC and specifically what parts. Or how an auto dealership utilized UC to sell more cars or more efficiently scheduled repairs.

In the grand scheme, providers have to do a better job of being concrete with a value proposition and a specific case for both the indirect channel and the marketplace to embrace both Cloud and UC. All too often, I get pitched with a bunch of mumbo-jumbo that is either all about the company or a string of buzz words. Neither of those pitches explain what the benefit is; what the value play is; who would buy it; why would they buy; what pain does it solve. It is this failure to communicate these necessities that is causing a disconnect in sales.