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.
]]>RC did have some wins last quarter: RC "closed six deals with TCV north of $1 million dollars up from five in Q4. One of these wins was at Hyatt Hotels Corporation. Hyatt will be replacing legacy Avaya system at their headquarters with RingCentral Office."
Some factors that are shaking things up: Avaya bankruptcy; 8x8 and Shoretel hiring bankers for strategy; and Toshiba leaving the North American market.
RC states: "For each dollar invested in sales and marketing, we continue to see $9 of revenue and $7 of gross profit over the projected life of an Office customer. " A number of UC providers should take note of that stat.
In the last 15 years, 52% of the S&P 500 have disappeared.
According to the CDC, "more than half of Americans have cut their traditional phone line and now only get wireless phone service." The other half is paying more and more for POTS service.
Verizon sold its data centers. It also sold its cloud services unit to IBM .
CenturyLink sold its data centers to a coalition of PE firms that also bought a collection of cyber-security firms. The new company will go by the name Cyxtera Technologies and it will be run by the former CEO of Terremark.
Gary Testa left Polycom last March to become President of Star2Star. That lasted 11 months, then he quietly exited telecom. Michelle Accardi has his position now. I am guessing the IPO is on hold.
John Oliver took on the new FCC Chair (former VZ lawyer btw) and net neutrality again. Want to comment on the FCC proceeding ironically named Restoring Internet Freedom (Docket 17-108) head over to the domain www.gofccyourself.com
I tried to explain this to several security people. Thankfully now there is a study. "More than 70 percent of SMB IT managers say budget considerations have forced them to compromise on security features when purchasing endpoint security," according to a survey by VIPRE.
All these Rapid Expansion press releases are funny. Yeah, you are following the Long Channel Strategy of signing up everyone you can. No idea how that pans out for most since it is a million dollar cash deal. Each of those master agencies will need co-marketing dollars just like the multitude of vendors that signed up with the likes of Jenne, Tech Data and other VADs. At some point, the cost to get a sale may be too high.
VZW has a co-sale model for One Talk. AT&T has co-selling. But RingCentral is taking this further. There is the partner, a channel manager and a SME from RC involved in each sale - from 1 seat to a million according to the release. All three getting 100% of commission. That will get expensive quick.
I would like to stop seeing ridiculous numbers in the press releases: "over 2,200 sales partners are now offering our services" and "we have more than 4,000 partners" and "300 Master Agents signed up" and the best: "8 Master Agents, providing 200,000 sub-agents". STOP!
]]>How do you enable Partners? A bunch of ways.
Clear messaging with a positioning statement. Who benefits from your service, why and how. Who being the exact target.
Take friction out of the process whenever and wherever possible. It is crazy to me that in 2017 more providers aren't using e-signature and transitioning paperwork to online forms.
Sales tools like case studies, deployment manuals, tech specs and more.
User training to make adoption easier and deeper.
When Zane says, "It isn't enough to have just an amazing product or the richest commissions, because if partners are not fully enabled to really market it, they will not position your product first." What amazing product? There isn't a clear winner in UCaaS at any level. While Broadsoft has the majority share, it is divided up among 400+ providers. So what amazing product?
The richest commissions change weekly. Providers are willing to pay almost anything to put any revenue they can get on the books - good, bad, under water or even horrible fit. And this leads to a host of problems on the deployment side, on the customer satisfaction side and later on the commission side (when the provider realizes it is under-water and wants to change compensation or when customer quits early and provider nets the commission out.) I wish I was making this stuff up, but it happens every week at most organizations.
And then we wonder why the UCaaS space that was supposed to be so hot is not.
8x8's numbers were kind of surprising because while numbers went up they posted a loss.
This goes to show you that just one huge deal can change everything (if it doesn't sink the company in the process of deployment!): "New enterprise Master Service Agreement signed with a Fortune 50 health care corporation to provide services to up to 10,000 users in 450 medical offices. [AND] New enterprise agreement signed with a national retail chain for over 10,000 seats across 3500 locations."
]]>With less than 25% of businesses on VoIP according to TechNova Consulting, then there is still time to make them relevant again.
Meanwhile Verizon is asking the FCC for permission to shutter more legacy SS7 voice switches. The TDM to IP transition is marching on. Frame Relay and ATM are mothballed. Soon SS7 as we are used to will be. I wonder if 9-1-1 centers have caught up yet?
AT&T told the FCC that "AT&T is progressing with its TDM-to-IP voice service transition in two cities in Florida and Alabama, telling the FCC that on a combined basis 50% of total customer accounts have voluntarily migrated to one of the telco's next-gen wireline and wireless voice services." [source]
OTT communications is growing so wide that it is now being reported on by analysts! "The VoIP market (e.g., Microsoft Skype), the IP messaging market (e.g., WhatsApp), a portion of the social networking advertising market (e.g., Facebook), Unified Communications (e.g., Cisco) and Cloud communications markets (e.g., Twillio) make up the OTT communication market." [source]
Broadsoft has 38% of the global UC market with 15 million UC lines, but that isn't a significant portion of the global business voice market. The analysts have now estimated CAGR in UCaaS at just 10% (down from the 20+% they were cheerleading for a few years ago).
Riddle me this: If the IP transition is going so well, how is the growth so slow (<10%) and the market penetration so small (15M = 38% or <25% of biz) when there are so many VoIP Providers out there?
]]>
Today, VeloCloud is selling its SD-WAN software to anyone who will buy it. They are having a problem selling it direct. Correction: they took the BSFT route of selling only through providers.
I have called UC a garbage can term often. Everyone has a definition for it. There is little agreement on that definition. It has a variety of other names: Hosted VoIP, Hosted PBX, UC&C, UCaaS, etc. It consists of many different components / features: voice, video, conferencing, collaboration, UM, etc.
SD-WAN is following suit. Load-balancing, packet shaping, circuit bonding, et al are all being re-framed as SD-WAN. It is becoming a garbage can term for a white box with a variety of functions.
As a buzzword takes off, every marketer wants to jump on-board. However, all it does is make the buzzword meaningless to the buyers. And we have to ask: Are there in fact buyers? If you had a hard time selling your box with Function A, what makes you think adding Function B and the hastag #sdwan was going to make it more appealing?
One thing to think about is product-market fit. The other is a clear value state to the defined target market. If you say 1-500 employees or 1-1000, you have no clear product-market fit. I have no idea what you told your investors about the market but it is likely a lot smaller than you think. It also will be segmented like crazy.
Some businesses will make great use of UCaaS or SD-WAN, others not so much. The sooner you identify who benefits most, the easier it will be to sell. Who benefits the most and why.
Note: If you are selling through an indirect sales channel AND you do not have a rock solid USP and target market, THAT is why it isn't selling (not because of the channel).
VeloCloud responded to this HERE.
]]>The problem with Avaya is it is over-leveraged, which we will be saying about many telecom companies in the coming two years. The on-premise or hardware PBX business did not fold like everyone thought. However, it didn't grow either. It slowly declined at about 3% per year.
Before its user conference, Broadsoft announced that it had hit 15 million licenses. According to Elka Popova, "The BroadSoft installed base is hosted IP telephony seats, fully-loaded UCaaS seats and business VoIP lines." So that just means licenses - even for SIP Trunks. About 3 million of those belong to Windstream and XO (1 million and 2 million SIP trunks respectively.) Who knows how many actual hosted seats there are.
Cisco has one-third that. Office365 is at 70 million users. All of that eats into, not just Avaya, but everyone.
Avaya's transition to cloud was slow and clunky. Mitel wasn't smoother but it was faster. It looked like the hardware folks - Zultys, Mitel, Avaya, NEC, Siemens, ININ - were content to keep on trucking. They treated Hosted PBX much like MSO's treat cord-cutting - deny, deny, deny - until it bites you in the ass! Then you get the lawyers, bankers and start filing BK.
"Spun off from Lucent Technologies in 2000, Avaya was a publicly traded company until 2007, when it was taken private by Silver Lake Partners and TPG Capital for more than $8 billion." [source] $8 Billion about 9 years ago. In the meantime, they did acquire a few companies, including some Nortel assets.
Channele2e reports, "software and cloud revenues aren't growing quickly enough to offset falling hardware revenues. Total Q2 revenue was $904 million, down $54 million compared to the prior quarter, and down $91 million year-over-year, as demand for unified communications products continued to contract, Avaya said."
They have been talking about an IPO or spinning off Zang or selling off a division like Networking or Call Center. We'll see what happens.
]]>When asked if this wasn't just a wrapper around Broadsoft's UC-One or other packages, Nextiva replied, "NextOS was completely imagined and developed in-house."
This follows Broadsoft's own announcements about Hub, Team-One and CC-One. This is BSFT's response to Slack, a real-time messaging and collaboration app now at 4 million users.
"BroadSoft Business includes three core applications: UC-One, Team-One, CC-One, with BroadSoft Hub providing contextual intelligence across the entire platform so users can access the information and apps they need in one place," press release states. "Built into BroadSoft Business are bOpen, bMobile and bSecure capabilities that can enable service providers to deliver carrier-class security and reliability; the openness for businesses to be able to integrate their favorite business apps (CRM, email, calendars, Twitter, etc.); and full mobility to connect advanced unified communication and collaboration (UCC) capabilities to a user`s mobile devices." I'm not certain if this is BroadWorks add-ons or if you can only get this via BroadCloud. The difference being that BroadWorks is run by the VoIP Provider and BroadCloud is the white-label service that Broadsoft operates for the provider.
Frost & Sullivan analyst Elka Popova wrote, ""BroadSoft's share of the global hosted IP telephony and UCC services market is 41 percent, which confirms BroadSoft's market leadership." With 15 million cloud lines, "BroadSoft cloud PBX/UCaaS installed base 3x greater than closest competitor Cisco and 10x greater than RingCentral." The "cloud line" is defined by Popova as "The BroadSoft installed base is hosted IP telephony seats, fully-loaded UCaaS seats and business VoIP lines." Still don't know if they include SIP trunks in that number because 3 million of those would be WIND and XO trunks then. And that woould skew UCaaS/HPBX penetration. It does look impressive in a graph:
Microsoft previewed Teams, which is its answer to Slack. It is currently only available to subscribers of Office 365 Enterprise or Business plans.
Meanwhile Cisco introduced a "flex plan" for Spark that lets businesses choose cloud, on-premises or hybrid services in a single contract. That includes Spark Meetings, which is also a Slack competitor.
Slack is attracting its own ecosystem that allows companies to integrate other functions to Slack beyond comms. Slingr turns Slack into a task manager. Other scripts can turn Slack into a CRM with Slack's user interface. IDEA2 and other companies like the user interface and the open API on which they can add functionality to an app people already like and use on desks and on phones.
Interesting that these folks are rolling out more complex platforms at a time when Verizon is rolling out One Talk which simplifies the whole UCaaS thing for small business. It's my experience that most businesses don't want complicated (hence, Slack!) and most users want simple (think Facetime). Without user adoption, this is wasted expense.
Want another example? Salesforce CRM at $99 per user per month but only a couple of people on the sales team use it actively. There will be managers who don't utilize the dashboard or coach to the activity in the system. Despite how integrated the SF ecosystem can be, it isn't worthwhile unless the users -- your employees -- are using it and benefiting from it! Same goes for any software, especially UCaaS (which is morphing again from Hosted PBX to UCaaS to UC&C and WC&C).
]]>If your Brand is broken, run a Branding campaign not a negative campaign.
When your brand is broken -- maybe your uptime is three eights instead of nines or maybe your customer service is notoriously awful - the buyer doesn't have trust in you. You need Trust for being to buy.
Look at how Ma and Pa Bell (Verizon and AT&T)have been re-branding away from telecom. Meanwhile, CenturyLink, Windstream and Frontier have been struggling to find their brand, their message, their future.
EarthLink had struggles growing beyond a dial-up ISP. They tried so much stuff: DSL, cable resell, MVNO, Muni wi-fi, VoIP, fiber, etc. - before finding their groove in Retail.
FUD (fear, uncertainty and doubt) will get you so far, but the best brands in the DNC ran on hope, change and issues. Take a lesson from people doing it better than you. Learn from your rivals what resonates with your buyers.
I look at the independent candidates who took 9% of the total vote. They remind me of the 1195 other Hosted VoIP/UCaaS providers in the US. You say you are in the running, but are you even campaigning? Are you doing ANY effective marketing, advertising, PR? Chances are: notsomuch.
To look at Broadsoft as a candidate that thought it should have won - and quite frankly has disappointed. Of the top UCaaS providers - RC, 8x8, thinkingphones/Fuze, Star2Star, West, Broadview, Mitel, Jive, CoreDial, Cisco and Microsoft - none of them are using Broadsoft. That has to be disheartening. To some extent that is like the Democratic candidates for House and Senate that lost. The party leader didn't help them win; the big name, carrier grade softswitch didn't help the 400+ UCaaS players win either. (You could argue that a few are doing well, like Vonage Business, Nextiva, Evolve IP and Comcast. Yet mainly the Top 25 are anything but BSFT. Isn't that interesting?)
Doesn't matter the technology or the pedigree, you have to market to win.
]]>RingCentral Office annualized exit recurring software subscriptions (ARR) grew 39% year-over-year to $316.8 million. RC says they are growing margins and revenue, while also increasing their losses. Is buying market share working?
8x8 reports that Total revenue grew 24% year-over-year to $63.2 million; service revenue grew 23% year-over-year to $57.7 million.
8x8's New monthly recurring revenue (MRR) sold to mid-market and enterprise customers and by channel sales teams increased 30% year-over-year and accounted for 65% of total MRR booked in the quarter. Average monthly service revenue per business customer was $409, compared with $360 in the same year ago period.
Per the PR: Ending seats at Vonage Business were 616,000, up from 514,000 seats in the year ago quarter, a 20% increase. Vonage Business revenue churn was 1.4%, compared to 1.3% in the year ago quarter. (About double what 8x8 reports.)
This is such a spun statement: "Vonage Business revenue, which includes $24 million of Nexmo revenue, was $106 million, an 86% year-over-year increase on a GAAP basis."
Broadsoft buys VoIP Logic to increase its white-label business, which now pits them directly against wholesalers like CoreDial and Bluip - and other BSFT clients who wholesale like Comcast and Momentum. If UcaaS was growing for the 420+ providers that utilize a BroadWorks platform, would BSFT need to ramp up its white-label and direct to Enterprise sales?
Interesting to note that of the noisy 3 in UCaaS, only Vonage has a BSFT.
Windstream announced yet another UCaaS product This one is called "Windstream Hosted Communications (WHC) for Small Business, a cloud-based phone solution offering enterprise-level capabilities to small and medium-sized businesses. Powered by Broadsoft. WIND also offers Avaya, Mitel and Allworx. Quite the mixture. It might explain why they have 1 million SIP trunks on their Broadsoft.
A couple of bright spots are the cable clan are almost all running Broadsoft. XO is powered by BSFT. (Coming to a Verizon store near you in 2Q2017!)
Both Bells - Verizon and AT&T - run Broadsoft for SIP trunking and UCaaS. In fact, we will see how the Broadsoft powered One Talk drives sales for both VZW and BSFT soon.
Recall that went ANPI was sold to Onvoy, they had just 20K seats on Broadsoft, so not everyone is killing it in the UCaaS space. In fact, if you take a sample from the INC5000, most VoIP providers in the US are doing LESS than $5M in business ($2-$4 million seems to be the median.).
"For 2016, BroadSoft expects the acquisition [of VoIP Logic] to contribute approximately $800,000 in revenue," that means that VoIP Logic was doing about $3.2M in revenue. BSFT's 3Q 2016 earnings call was this morning.
There are certainly VoIP Providers with more than $50 Million in revenue. I would argue it is more a pyramid than a bell curve.
Companies are ramping up the SPIFF war to grab market share in the UCaaS space. It is likely easier and cheaper to buy deals from channel partners that acquire a whole provider - and the resulting synergy/culture mess that will ensue with integration after a buy.
Bullseye, Fusion, Star2Star, TelePacific, AireSpring and net2phone are just six of the companies posting SPIFFs for deals to Channel Vision magazine's email list and other places. And the SPIFFs are designed to skew for larger deals (more than 8x8's ARPU of $409). Some are specific to a preferred master agency.
At an agent event last week, I was talking to an Avaya partner who is still selling strong. Sure there has been some dip in on-premise PBX but not as much as you would think. Windstream is still selling mid-market deals of Mitel and Avaya boxes.
Do you know where the weak spot is? SERVICE DELIVERY, according to someone whose opinion I value greatly. Barely anyone has that figured out yet! And that is where the Customer Experience starts (and stops). Size doesn't matter. What matters is deployment, implementation, design, training and UX (user experience).
I keep hearing from folks who say the SAAS model is about OPEX over CAPEX. Well, that is the story but for most businesses, the spend over 4 years for a cloud comms solution is more than buying one. So there is a premium to be had for Hosted UC.
I have said it before: UCaaS is selling Change. You have to change the buyer's mind from "It is a phone system" to it is a new way to communicate and run your business with employees, contractors, customers and vendors. And then the buyer has to want that too.
I think much of the OTT VoIP is really about cheap dial-tone and one or two features (like conferencing or voicemail to email) as a bonus.
The other factor: CPaaS. Instead of using a desk phone or softphone, people are using Apps to talk to one another - like on Xbox, in Uber's app, Facebook Messenger, WhatsApp and Slack. This is taking away from some UCaaS sales as well.
The Skype4B noise has finally quieted down. But Greg Plum at PlumUC is running a Skype4B Bootcamp because users still can't figure out how to get the most out of S4B. All UCaaS providers should be training users constantly to teach/coach them how to improve collaboration and productivity, the two reasons the execs spent the money on UC&C to begin with!!!
FairPoint has entered the fray with Telax software. "Although FairPoint foresees the new service being applicable to all of its customer segments, the company expects the immediate sweet spot customer profile will be those that have 20-100 employees," per source. I guess in their territory that is mid-market!
Last piece of UC news comes from Broadvoice, who has been approved as a cloud services vendor for all states that participate in the public sector Cloud Service marketplace, created by NASPO ValuePoint in conjunction with the state of Utah.
Broadvoice CEO says that they are one of the only UCaaS providers in that marketplace. ]]>This is ironic because when BSFT bought Intellinote and made a bunch of announcements about spreading BroadCloud and BroadBusiness, I remarked they should just buy VoIP Logic. And then they did.
This adds some white-label expertise to the mix for Broadsoft as it looks to ramp up white-label revenues. There aren't any more carriers to bring on the BroadWorks platform, so from here on out, BSFT has to sell white-label licenses. And acquisitions make Wall Street happy because you confuse the organic revenues with inorganic ones.
It pivots now from a software company to a service provider -- and directly competes against many of its clients either directly or indirectly. As it powers Verizon's One Talk, Rogers' Unison and ACCESS4 (in Australia), it is picking one carrier in a market over another. This isn't sitting well with quite a few BSFT clients.
But what can you do? On the one hand, BSFT should have been a more innovative software company (where's the Slack integration?). On the other, it decided to look quarter to quarter at licensing revenues. It didn't want to become like Taqua (who was scooped up by Sonus ).
The VoIP industry has a problem: too many providers, more coming every week and not enough buyers. It reminds me of the cellular industry. MVNOs come and go pretty fast. The Top 4 guys are battling it out in a bloody price war.
Only in VoIP, it is a struggle to find ways to bring value. Cellular is stealing the small business market. Most other small businesses that I speak to just want to replace POTS or PRI. The PBX industry is do a slow fade at about 3-5% per year but that isn't the erosion everyone predicted. Cloud Communications just isn't selling like warm donuts at Krispy Kreme.
More consolidation is needed. And not mergers like VTech and snom. We need stronger VoIP companies to emerge - with a brand to build some demand and be able to execute on it.
Congrats! to VoIP Logic. The CEO, Micah Singer, was on a number of my ITEXPO panels over the years.
]]>We have seen consolidation in the contact center space - ININ-Genesys and others. It isn't over yet. There are too many players in the marketplace, and for right this moment money is still cheap. Better to buy your competition than try to beat them.
More predictions: "Global unified communication and collaboration market expected to grow at a CAGR of 12.3% from 2016-2020," says a report by Technavio.
So 8x8 and Vonage are at 600K seats each. 8x8 has 45,000 Customers according to June 2016 investor prezo with ARPU at $399 now.
Windstream and BroadSoft team up to bring customized Virtual PBX to hospitality market. WIND is a confusing deal. They own Allworx which they never discuss. They push MITEL and Avaya - and they have a Broadsoft. That is a lot of platforms to know, sell, manage, support.
Comcast Business Services revenue increased 17.0% to $1.4Bn with small business accounting for ~75% of revenue and ~60% of growth. Voice makes up 7% of Biz Services Rev..
Megapath launched the latest Broadsoft offering called MegaPath One with the usual collection of bells and whistles. MegaPath also rolled out Skype for Biz integration.
ITSPs are so worried about Microsoft eating their lunch that they integrate with it or add some Microsoft to their offering, like MegaPath and Velis4. Even TelePacific is joining the Microsoft CSP program. WIth the DSCI deal approved at the federal level, there should be more news out of TelePacific.
RingCentral doesn't break any stats out anymore as they just play with GAAP and performa stylized finance sheets. "In 2015, nearly 30% of RNG Office new bookings coming from up-market customers with at least 50 users, up from about 20% in the year ago period." Now they are bringing in customers with 100+ seats. All the UCaaS players are going upmarket, where the ARPU is higher, to cover the cost of sales and support.
RingCentral (RC) did make one big change: previously RC distributed phones to customers by reselling third-party phones; maintaining inventory, handling A/R and warranty processing, etc. Now they made a deal with Westcon to distribute phones to RC customers with RC acting as an Agent of Westcon and getting a referral payment per order. Westcon will now maintain inventory, handle A/R and warranty processing.
Jabra Survey Finds Small/Medium Businesses Driving Productivity through Unified Communications. "Between a third and two-thirds of all small/medium businesses (SME) will either add unified communications (UC) or replace existing systems with UC within the two years, according to a recent survey by Jabra."
Cisco Spark, Microsoft Skype4B and other services are putting pressure on the OTT VoIP players. "RingCentral and friends are now facing challenges from Microsoft and many other titan-sized technology experts. The proof is in the pudding, and these VoIP experts must continue to show that they can deliver healthy business results in head-to-head competition with true giants," states this article. Because all the noise right now is about Skype (and Slack started doing TV commercials), the market is wondering if stand-alone VoIP can continue to afford to buy market share. VoIP players are giving free phones, SPIFFs, free months of service, just to get a customer. The cost of that acquisition is being questioned on the stock market. OR it may all be a fluke and stock speculation going awry.
There were a large number of service providers in the space of UC&C - from Fuze, RC, the Cloud Comm Alliance members to the LECs to the other numerous ITSPs. Then softswitch vendors decided to become service providers, too. Broadsoft BroadCloud; GenBand Nuvia; Alianza Cloud Voice Platform; and Metaswitch MetaSphere Cloud Services are all competing with their customers and making it easier for new entrants into the already bloody ocean of Hosted VoIP. (Now even enterprises can be an ITSP).
Everyone is pushing up-market, but Cisco recently did a study on small businesses. The study found "on the IT front, a majority of small companies (86 percent) are considering the use of cloud-based unified communications (UC) systems as a possible solution to their communications needs, replacing their more traditional premises-based counterparts."
"Yet unified communications as a packaged service, despite its relative maturity, remains far less than universally adopted, particularly outside of larger enterprise accounts. A recent survey of more than 400 enterprise and SMB IT decision-makers, performed by UBM Tech for XO Communications, found that only one-third of organizations had fully embraced UC. On the other side of the spectrum, a separate survey performed by Osterman Research for ConnectSolutions found that about as many IT decision-makers (26 percent) and business deci-sion makers (39 percent) are either "somewhat" or "very fearful" of migrating to UC. Nearly half of those surveyed admitted that they don't fully understand the full impact UC would have on their organizations. These fears and trepidations come despite the fact that 71 percent of those surveyed by Osterman believe there are "significant" or even "enormous" benefits that can be realized from the deployment of UC." [from ChannelVision magazine].
Mobile UC is going to be another segment of the UCaaS pie. Mast Mobile, Apple, Google and now Verizon's One Talk. You know that Sprint could have driven this years ago when it first announced integration into the Broadsoft switch for 4-digit dialing to cellphones. But Sprint just couldn't get out of their own way. It would take months to deal with them for quotes, sales sheets, etc. It would be scary to think how long deployment would take. But now VZW is doing it - all in-house - with their Broadsoft.
]]>VOSS Solutions has been a Cisco shop for many years. Now they are launching VOSS-4-UC, a management platform for the hybrid Cisco and Microsoft environment, which I would imagine is how many Fortune 5000 companies operate. VOSS also hired a Skype for Biz Chief, in a nod to the growth of Office365+Skype4B.
Meanwhile another Cisco shop launched a UCaaS service for small business. Verizon One Talk is a BroadSoft based, mobile first offering for small business. As Verizon wrote me, "It is selling well out of the gate because it is simple, easy to buy, only the key features, and the sales channel that incented to sell it at scale." At this time, I don't know the difference between One Talk and VCE, the other BroadSoft offering that VZ sells, but I will look into it.
Meanwhile, Gary Kim has a good write-up on One Talk; so does Telecompetitor. The VZ commercial is a little over the top but it gets the point across. The key is that small businesses that One Talk targets are going all mobile anyway. This offers them some PBX functionality on top of that -- to look "bigger". See the video here.
Intelepeer added some channel help and re-organized to support their Cloud Advantage Partner Program. Intelepeer is a SIP provider with close ties t o Cisco platforms including Spark. They partnered with Chinook on a hosted Lync/SIP bundle. More and more providers have to embrace both Cisco and Microsoft, who hold 55% of the UC market.
"According to the survey, 26% of IT decision makers and 39% of business decision makers are either "somewhat" or "very" fearful about migrating to UC with nearly half (48%) of those surveyed admitting that they don't fully understand the full impact UC would have on their organizations."
Verizon kind of tackled this, right? By getting simple AND by targeting a segment of the marketplace (not the WHOLE marketplace of 1-1000), their UCaaS offering will sell. Skinny bundles will help or highly targeted packages make it easier to message to the prospect.
On the enterprise front, it will be a hybrid world going forward. We see more providers embracing Office365 (especially when so many ran from it at launch). Others have come to realize that it will be a Cisco+Microsoft world, so adjust to it.
]]>New ReportsWeb Global UC&C study:
"The global market is gradually experiencing the transition from legacy telephony services and messaging platforms to new UC&C services and platforms. We expect more number of global deployments of UC&C in coming years, driven by growing popularity of applications, such as rich collaboration, mobility, video conferencing, and telepresence." Key word is gradually.
"Business process integration and social media communications have become the primary focus of enterprises. Companies seek low-cost solutions, such as BYOD and web real-time communications (WebRTC) to deploy UC&C solutions." BPI or BPaaS - it isn't stand alone products. It will be an integrated platform to run business process that happen to include comms. (At least at the enterprise level)
And of course the growth guess: "Global unified communication and collaboration market expected to grow at a CAGR of 12.3% from 2016-2020," says a report by Technavio.
The news seems to miss that the different sectors of the marketplace are migrating from legacy for different reasons - like cheap dial-tone replacement, simul ring, etc.
The market is buzzing with Skype Integration news from RingCentral, MegaPath, BitTitan, even Yealink and others.
Master agencies are seeing a way to grab the attention of Cisco partners. First, AVANT teamed with Cisco to accelerate sales for Cisco Powered Providers.
Next, MicroCorp amped up its "relationship with IntelePeer, in order that certified Cisco partners can earn monthly recurring commissions on voice services for those selling the Spark and Meraki MC platforms." Cisco wants partners to get used to selling cloud and voice, because Spark, ya know.
RingCentral teamed up with Google for Work to chase enterprise. Having also integrated with Skype, RC is hedging bets or wants to be all things to all people, which never works.
Windstream, after showcasing Mitel and Avaya, teams with BroadSoft to bring customized Virtual PBX to the hospitality market. So WIND has Mitel, Avaya, BSFT, Allworx and Metaswitch. Yeah, that is cost effective.
As if there weren't a large number of service providers in the space of UC&C - from Fuze, RC, the Cloud Comm Alliance members to the LECs to the other numerous ITSPs. Now softswitch vendors have decided to become service providers, too. Broadsoft BroadCloud; GenBand Nuvia; Alianza Cloud Voice Platform; and Metaswitch MetaSphere Cloud Services are all competing with their customers and making it easier for new entrants into the already bloody ocean of Hosted VoIP. (Now even enterprises can be an ITSP).
Not to be left now. Cisco and Microsoft have jumped into the fray to compete for UC&C customers with Spark, HCS, Office365+Skype4B. The PBX vendors like NEC, Unify, Avaya and Mitel are in the mix and feeling the pinch to have a cloud component. Not only a cloud component but contact center too. Oh, how complex we must make it.
Everyone is pushing up-market, but Cisco recently did a study on small businesses. The study found "on the IT front, a majority of small companies (86 percent) are considering the use of cloud-based unified communications (UC) systems as a possible solution to their communications needs, replacing their more traditional premises-based counterparts."
Yealink has phones for Skype4B. One of the reasons that you see Jabra, Plantronics and Sennheiser at VoIP shows is because bluetooth headsets are becoming common in the call center space and more UC&C users are choosing to dispatch the deskphone.
"Yet unified communications as a packaged service, despite its relative maturity, remains far less than universally adopted, particularly outside of larger enterprise accounts. A recent survey of more than 400 enterprise and SMB IT decision-makers, performed by UBM Tech for XO Communications, found that only one-third of organizations had fully embraced UC. On the other side of the spectrum, a separate survey performed by Osterman Research for ConnectSolutions found that about as many IT decision-makers (26 percent) and business deci-sion makers (39 percent) are either "somewhat" or "very fearful" of migrating to UC. Nearly half of those surveyed admitted that they don't fully understand the full impact UC would have on their organizations. These fears and trepidations come despite the fact that 71 percent of those surveyed by Osterman believe there are "significant" or even "enormous" benefits that can be realized from the deployment of UC." This is a part of a nice piece that Martin Vilaboy at Channel Vision magazine wrote on UCaaS demand and adoption.
The role of SD-WAN in UCaaS HERE.
Good read on Churn from a former BSFT exec on LINKEDIN.
A look at UCaaS service delivery by AVNET.
]]>We went from TDM to VoIP to Hosted PBX to UCaaS to UC&C.
We went from T1 to cable broadband to Gigabit.
The consolidation of cable will tighten the market in 15 to 18 months. (It takes that long for integrations to take hold.) Now if the integrations are not a big fail, then cable - New Charter/Spectrum, Comcast, Altice - will ratchet up the competition in the small business market for triple play.
"Cable/MSOs are the fastest growing providers in the business services market, with much of their recent success in the mid-size business space," reported MarketResearch. Think about that: the mid-sized space - not just the small business segment of the market.
Of the $104 Billion total businesses spent on telecom services in the US in 2014, AT&T had the largest share (33%), followed by Verizon (22%) and the rest of the LEC band of brothers (Level3, CenturyLink, Sprint, Windstream). MSOs have more than $12 Billion of that pie, with the lion share - $5B - going to Comcast coffers alone.
SIP anyone? 54% of business cable subscribers also use cable for voice, the report states. That means less than half the businesses using cable are buying voice from another provider. That is a shrinking opportunity for the 2000 Hosted VoIP players in the US.
"Last year the Cable/MSO share of businesses with 100+ employees rose to 17%, reports TNS. "The main driver behind this growth was a heavier reliance on internet service and the need for greater bandwidth; two areas where larger cable providers excel."
Telco broadband has not kept pace with cable in speed and price. Egged on by Google Fiber - and a declining market share of businesses - ILECs have started tentatively rolling out faster fiber based broadband - 100MB to 1Gigabit depending on the ILEC (Windstream versus CenturyLink or AT&T).
UPDATE: Google just rolled out Gigabit Fiber to small business starting in Charlotte in July of 2016.
The ILECs have made a tremendous CAPEX investment in TV - just as OTT TV is hitting its stride. They spent big to supply triple-play, when they could have spent the money on FTTx projects for faster bandwidth. That was just uncreative thinking. [More of that Me-too mentality ingrained in telco.]
All of this will stress ILECs, some CLECs and even some OTT VoIP players. When cable takes about 35% of the SMB market, there won't be much room left for anyone else.
In March of 2016, "During the fourth quarter, Verizon reported that total broadband connections dropped to 2.1 million as it lost more DSL subscribers after losing 94,000 DSL customers," according to Fierce media.
Verizon is transitioning. Verizon is now betting on mobile ads (AOL acquisition and Yahoo bid); 5G fixed wireless broadband replacement for wireline services; and IoT (including connected cars) to add to its coffers.
A point I make often is that the debt that the ILECs carry is crippling with flat revenues.
Think about this: Vonage has taken $800M worth of voice revenue. Twilio gets $240 million in voice revenue. This is revenue that typically would go to Level3, Verizon and AT&T (and it probably does terminate to them eventually for a smaller percentage of that money).
WebRTC is being used in so many apps to allow for video and voice calls - bypassing the traditional voice network. [And bypassing the cellco text system and dollars.]
Then, we have Cable beating Telco in broadband bandwidth. Always has in fact. Gigabit fiber will be the real winner if the telcos decide to pursue that route for real (versus in just press releases).
We have telco getting in the data center - and now we have telcos looking to get out of that business without embarrassment.
There is a Talent problem, too. There are too many musical chairs. Not only can't you set a strategy when you shift personnel that much, you can't execute on a strategy either if the cogs are constantly being replaced. (And I don't mean cogs in a bad way. It takes a lot of talent to keep the wheels spinning.) The talent drain has also resulted in a domain knowledge drain as well. Quite frankly that means they don't where things are and how things have been done to keep things working. It isn't all documented, especially fiber maps!
Let's face it, for many companies that started with an A Team, they are now running with a B or C team. Why? As Steve Jobs said, "A Players hire A Players, B players hire C players. Get it?"
People move from company to company in teams. The same routine and team may work once, but it is not often a repeatable experience. There's a reason the Cavaliers recruited LeBron back to Cleveland - and didn't hire the whole Miami Heat starting line up.
The telco organizations harbor stifling factors: monopoly mindset, legacy systems, federal accounting and regulations, departmental silos and competing internal interests. These factors do not lend themselves to attracting more A Players.
There is also a surprising lack of talent for the new services and skills needed for omni-channel marketing; omni-channel customer service; cloud, managed services, migration and integration. This lack of skill will choke growth and brands.
We see outages and hacks every day. The worry is only about getting a customer. There is little concern for retaining that customer; data security; or a resilient network (4 Nines is good enough).
Many people are choosing smaller organizations to work for. The reasons are numerous but I would think that impact and voice play a major part. In smaller businesses, any one person can have a voice and can see the impact that they are having on customers, culture, and the company. That isn't the case in larger organizations.
Flat organizations (and smaller companies) have less meetings, fewer silos, maybe more transparent governance.
Most financial experts are predicting an economic slump in 2017. It won't matter which candidate wins the Presidential election, a slump is coming. We have under-employment; increasing number of freelancers; and a stagnant wage. None of these components inspire an economic engine that is fueled by consumer spending.
ARPU for cellular, cable and VoIP segments have been fairly constant over the last 4 years worth of data I could find. Bandwidth and voice revenues are actually shrinking. Total telecom spending from 2013 to 2014 shrunk $6 Billion dollars according to MarketResearch.
Growth will be hard to find. We are seeing a price war in cellular accompanied by escalating customer acquisition costs.
Hosted VoIP is experiencing a similar battle for customers that is increasing the cost of customer acquisition. Rising SPIFFs and other compensation are being used to grab both market share and channel partner attention.
PBX vendors are NOT crashing and burning as many had predicted. Premise PBXs are still being sold and installed by a robust band of vendors - Mitel, Shortel, Avaya, 3CX, Fonality, Zultys, Panasonic, NEC, Siemens and more.
We are half way through 2016. No big winners. The Twilio IPO was a surprise. Vonage spending all of its acquisition money for the year on Nexmo, Twilio's competitor, seemed strange, since there were Broadsoft clients they could have picked off instead to take a big step forward in the race. Slack and all the Skype4B hype are little surprises.
2016 is half over - and so many companies have either done M&A or played musical chairs that I expect nothing magical to happen in the rest of 2016. And I look at all of this and wonder what 2017 holds.
ASIDE: telco versus cable consumer data.
]]>RingCentral Enterprise with Google for Work is a new partnership. It will chase (far) behind the Microsoft suite. As expressed here, "Take Skype for Business, Cortana, and Yammer to name just three, held together by Office 365 and the Azure cloud platform, while not forgetting the Enterprise Mobility Suite (EMS), as well as the recent acquisition of LinkedIn." RC has had partnerships with AT&T, BT, Telus and others. These partnerships have not moved the needle. This one likely won't either.
A survey from BetterCloud finds a trend developing: 'Office 365-based organisations are more than four times larger and five years older on average, while companies who run Office 365 have IT teams five times the size of their Google counterparts." Looks to me that if you have a big IT department, you have a likelihood of more Microsoft certified staff (and Cisco certs as well). The one thing Google needs is a certification program. No better salesperson than someone that invested time and money on a certification.
magicJack is rolling out its magicJack for business to the SMB market. No idea why they claim so much success with the magicJack device, since that clearly was a fad - and what does that have to do with the SMB market? magicJack acquired Broadsmart for $42M. Why would it want to associate Broadsoft UCaaS with that device?
Finally the VoIP hardware vendors are stepping it up.
"Edgewater Networks' hybrid cloud to edge, end-to-end approach to security, service management and analytics is an ideal complement to net2phone's white glove business communications delivery platform." [pr] So net2phone is deploying the Edgewater IAD and management suite. The next evolution for Edgewater is SD-WAN, an orchestration layer that will overlay last mile to provide packet shaping, failover, analytics and more. Vonage Business and a few former CLECs (like ELNK and TPAC) have added SD-WAN as a managed service.
CenturyLink chose Versa as its SDN partner. Versa has been the "lead virtualization partner for the SD-WAN and SD-Security services launched last week."
CenturyLink beefed up its SDN and NFV strategy by buying the assets of Active Broadband Networks. "CenturyLink says it purchased ABN's edge platform assets, designed to enable service providers to deliver cloud-based services. The company said its purchase would help automate its network, move network functions into the cloud, and deliver SDN and NFV services."
Lastly, hardware vendor, PATTON, has launched a new VoIP CPE that integrate FXS, BRI with UCC and All-IP Communications. The SmartNode VoIP Gateways and eSBCs are designed for small offices that need legacy-device integration with All-IP business communications and UC&C.
Avant Joins Telarus, TBI as RingCentral Master Agents. I find it interesting how so many VoIP providers follow the same channel go to market strategy of chasing the master agencies, who already have 20+ vendors in that space. VoIP shouldn't be a commodity, but I guess that is just what it will be relegated to be.
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