You got my attention. I already had one go around with Convey and LSI over this.
Convey Services is SAAS company that runs a portal for master agencies. LSI and ByteGrid hired Convey to handle their portals and an event. Convey did a poor job on the details of this. The email came from them, not LSI or ByteGrid. The email didn't explain clearly anything actually.
Convey tracks agent usage of the portal. Where they go, what they look at. I figured they scraped my email from that. Convey says it was provided by LSI, who got it from a LinkedIn connection with one of their executives.
Everything about these 4 or 5 emails has been the showcase for the Lazy Marketer. Quick, Dirty and Hurried.
It was a blast email, but the emails were CC'ed instead of BCC'ed. (So I will likely get even more spam.) If you can't Blind CC, do I really think you can handle Compliance issues?
For your own education, HIPAA is not HIPPA. This does not exude confidence.
I asked to be removed from the email twice - both to Convey and LSI. No idea how ByteGrid got it. I have never done business with any of these companies.
Also, it takes one minute to look at my website or my twitter or my LinkedIn profile to know that I reside in Tampa Florida. Why do I get invited to so many events in Atlanta and Miami? One is a 7 hour drive and the other is 4 hours. From companies I have no relationship with?
If you aren't careful with my email, why I would I trust you with my client?
I know you think I made a mountain out of a molehill, but I get tired of the pile of email I get that is this or even more irrelevant.
I understand you want to get the word out. It's a fun event. Let's Blast it out! NO!!! STOP!
It's like when a Channel Manager from a carrier I quoted but never sold, does the musical chairs to another company and pings me from there. I shake my head.
3 Things:
Don't Be Lazy.
]]>RAD: The Telecommunications/UC space is changing. It is a lot different than when we both got in during the heyday of the 90s. How will these changes affect channel partners?
CEO: The evolution of Cloud offerings in the UC space is changing the fundamental structure of the type of partners that are required for a successful channel. The classic VAR's face the challenge of a major change in becoming solution focused, not product focused. This also entails a change in the type of technical talent required within the VAR's to execute on their new solution offerings. A market that for more than a decade had only 5 to 10 top providers, now as the shift to cloud continues, has 30 or more providers with UCaaS offerings. With this, VAR's that navigate the change will have to focus on providing solutions that incorporate integrations to other work flows, CRM's and related solutions. On the positive side, it does allow VAR's to truly become solution providers by having the ability to easily offer multiple Cloud solutions, finding the best fit for each prospect."
Tracey continues, "As a result of these changes, many of the providers turned to alternative channels like Master Agents and Value Added Distributors (like CDW and Jenne). This opened a larger market reach than the classic VAR channel, but has compounded the problem of finding resources to deploy and support these solutions as they grow in numbers and scope."
"As we sit today there is a lot of uncertainty in the channel and lots of scrambling for solutions. Channel partners that can adapt and overcome will have plenty of opportunity and the re-occurring revenue streams should provide many opportunities for growth beyond that of the traditional VAR."
"What is really needed to succeed is the technical talent and execution of a top VAR, with the exponential sales growth opportunity of a channel like the Master Agents built for carrier services."
RAD: What have you seen that is a positive indicator?
CEO: "We see growing demand from the providers for an answer to their execution and support issues. The demand for organizations that specialize in UCaaS/CCaaS and have the required skilled engineers to successfully design, deploy and support these solutions will see tremendous opportunity. We also see growing demand for technology in the business space that can improve companies' ability to compete in their markets. We see increase value put on UCaaS and CCaaS solutions as a key for organizations to succeed. It opens lots of opportunities for those organizations that are ready to take on the challenge of these changes."
RAD: How do you see the Contact-Center-as-a-Service space evolving?
CEO: "I see the CCaaS space evolving ahead of the UCaaS space. Contact Centers are often the heartbeat of an organization and its key factors - revenue and service. The more organizations realize that Contact Center productivity is a driver for their business, the more demand we see for the business applications/features to be built in to the Contact Center solution. The line between CRM and CCaaS is blurring as more companies demand integrated access to multiple communication channels and data sources. And today it's true not only for bigger business players but also for SMBs."
"There's a very limited number of competitive premise-based Contact Center offerings in the small-to-medium market. Cloud solutions are stepping forward bringing top-level Contact Center functionality to this market along with the reliability, scalability, continuous software advancement and next to zero hardware requirements. Smaller contact centers now can afford to operate on the same level as business monsters with less risk and more opportunities to grow."
Tracey adds, "We see some big SaaS CRM platforms presenting themselves as Contact Centers to play as CCaaS solutions but they are still lacking lots of expected Contact Center functions and they lack the ability to route interactions from multiple channels effectively. They face a step climb to catch up to the rapidly expanding feature/application sets of specific CCaaS solutions. At this point in time with some many of the CCaaS players offering integrations into these big SaaS platforms and having open API's for continued advanced integrations. It just makes more sense for CCaaS to be integrated into complete CRM than the opposite."
Tracey remarks, "When it comes to the channel, CCaaS business is a great source of MRR revenue. The average CCaaS deal will have a Top Line of 4x to 5x in comparison with UCaaS, and it is still a field with fewer players. MSPs, VARs and Agents who see the writing on the wall about declining top line revenue in their carrier business should really start considering CCaaS as an alternative."
]]>I know we are facing TDM sunset but from the looks of advertising from the likes of Birch and Bullseye, POTS is still alive and well - and profitable! POTS is still the reliable choice when it comes to voice lines for alarms, elevators and faxes.
For many scenarios, an on-premise PBX makes more sense than a haphazardly deployed Hosted VoIP scenario. Many a small business replaces POTS with SIP trunks to get mileage out of their aged key system. Switching to a new cloud PBX is not a viable option for some small offices because they don't want to change behavior. Hosted VoIP does a poor job on key system emulation despite years of partners selling it and providers trying to deliver it. It is one big face palm.
If PBX were indeed dead, wouldn't one of the leading UC companies have 1 million seats by now? Instead they are struggling to get to 700K seats.
The problem with UC is that it is mass market and it would be better off verticalized.
It would be better for all if Broadsoft wasn't competing directly with its own customers by selling direct to users at $15 per seat. That smells of desperation.
Someone asked me what I meant by that. Broadsoft selling direct cuts out their 400+ clients - like Vonage, TPX & Nextiva. Now these providers have to face price compression from their vendor. It's like ISPs and CLEcs who buy wholesale from ILECs and cablecos only to see retail rates are cheaper than their wholesale rates. Isn't that a crock?
BSFT can't add any more clients because every carrier on the planet has already picked a softswitch - BSFT, Meta, Netsapiens, or home brew. The only way to maintain revenue is to sell direct. BSFT isn't exactly raising the ocean or expanding the pie. They are just taking a big bite from the pie that their clients have been baking for 10+ years. Sure, everyone says that cloud comms is starting to take off; that it is hitting high adoption, but is it the UC we have seen or a bunch of variety?
Office 365, Cisco Spark, Dialpad, One Talk, Fuze, Shoretel, 8x8, RingCentral, Grasshopper, Mitel, Avaya, Jive, Intelepeer <- that is a lot of variety under the UC umbrella. With 2000+ providers of some form of UC in the US, even with an accelerated pace of adoption by users, will there be a clear winner soon? Probably not.
In fact, all these choices without a clear winner probably helps Microsoft more than anyone. When in doubt buy from the established.
There are factors: it isn't a replacement system so much as a change. Extra gear is required (POE switches, QoS Router). It isn't as reliable as POTS - and can't be used in all places POTS was. The call quality is often not clear (unless you put it up against cell phones). (It's why they are touting SD-WAN for UC). It isn't cheaper than POTS in many cases. The deployments are often messy. (Providers can barely turn up Internet Access without issues let alone something complicated like Hosted PBX.)
And finally it doesn't pay much in commissions. At $15 per seat and even a 20 seat deal, the MRR is $300. That is a big headache for $300 in billing revenue. Easier, faster and better to sell network still. Or POTS. Or on-premise PBX with higher compensation. 3CX has been doing everything to make a partner's business model sing.
This isn't me being a Pessimist. This is me being a Realist. This is just how it is in the street in many places.
I don't hear anyone hawking white glove service or money back guarantee or no headache install. I hear the talk of zero touch deployment. That's the wrong way to go except for the CFO who wants to maximize profit per contract. Customer experience is someone else's domain.
I don't hear anyone talking about their call quality, their customer experience, their hand holding on deployment, their world class PMO. These are better things to talk about than price and features.
]]>The products that have been launched recently sit in big buckets titled IOT, Cyber-Security, Managed Services, SD-WAN and of course UC (UCaaS, UCC, WCC).
Rich Tehrani has a nice read about AI and analytics transforming companies like Vodafone.
COLOTRAQ has a new IT Risk/Cyber-security Assessment and Planning Service. They even brought in some talent to delivery it in Victor Zamora.
MetTel launched a single SIM for IOT. One VAR I spoke with said that they are going to run with this to the end-user because it is a niche that is almost without competition.
Level3 consistently emails me about selling cyber-security, especially their DDoS Mitigation service.
EarthLink is still around? They launched a secure public Wi-Fi connections with Norton WiFi Privacy (basically VPN). Considering how often businesses use Starbucks, hotel, airport and other public wi-fi, this should be a no-brainer sale.
Panterra rolled out Streams, an ode to Slack, but integrated into a secure, encrypted full unified comms platform.
VZW has One Talk, one of the few mobile UC plays out there.
When TelePacific re-branded as TPx, the highlighted products were managed IT, security, UCaaS and SD-WAN.
Aryaka just rolled out a clientless SD-WAN: "SmartACCESS - the first-to-market SD-WAN for remote access, with built-in dynamic CDN." In the US, Content Delivery Networks are how a majority of users get their Netflix chill on.
Verizon announced that they are selling more MPLS due to SD-WAN. CenturyLink has said that SD-WAN is not a quick fix. So there is a lot of room for expertise and advising in these projects still.
AT&T says that enterprise clients want a hybrid solution to managed services. (Nothing new here). Some of the services will be outsourced to the likes of AT&T and some will remain in-house. That is the way it is for cloud as well - HYBRID, according to an Evolve IP survey. Private for mission-critical, Public (AWS, Azure, SaaS) for mass market stuff and VPS for DevOps. Pulling that together requires some expert help. Is that you?
All of these vendors are just waiting for Channel Partners to pickup the ball and run with it.
It will take more than the Twitter approach to launch. Twitter put there platform out there and waited to see what people would do with it. Years later, Twitter still has no idea what the business case or financial model is. Don't be Twitter!
It isn't about just throwing your toy into the yard so someone will stumble along to play with it.
We want to be spoon fed who IS buying it; why are they buying it; etc. (As I have written about ad nauseum.) It is all about the Stories! Ignoring this means that we will leave that toy alone on the ground over there.
I understand that channel partners have to innovate, change, transition, etc.
With network revenues steadily declining and telecom being a broken mess, partners spend all day selling bandwidth at lower rates - and lower commissions - and then having to navigate the many layers of Dante's Hell that is a carrier today to get it installed (and then fixed - yes I am talking to you ACC Business and GTT!)
In the midst of this mess, on-going consolidation and the accompanying musical chairs is making a partner's job harder, not easier.
Much of these products require new knowledge and some training. That is not time that is always available to partners. I know, Go Make Some Time before you become Extinct. You see, we'll have time when we are extinct.
Besides compelling stories, buyer profiles and the WHY, we will also need new sales skills. Selling dial-tone or network is replacement. Selling Cyber-Security or AI requires a different sales approach.
MSPs understand how to sell managed IT but some VARs do not. (Hence why they are still VARs!)
While many of these products allow a Partner to enter a green field with little competition, maybe the business model for the partner has to be demonstrated as well.
And maybe instead of launching more services, you figure out how to deliver on the ones you have. If you can't deliver the easy stuff (Network), I will never give you a shot at the complex!
Just some food for thought while you wait on the Channel.
]]>Someone I met in Vegas was a laid off CM who was discussing how exciting it was to launch her partner business. I hadn't heard from her and just checked on LinkedIn. She is back in the W-2 world of being a carrier channel manager.
Over the years I have met a handful of CMs who had been doing Agent business on the side to build up enough MRC (monthly recurring commissions) to make an easy slide over to the independent side.
There are a couple of executives to made the leap into master agencies by bring a deal in their back pocket big enough to start them off.
It takes a while to find a prospect, ink the deal, get it installed and then get paid. Number porting for anything voice and fiber installation for anything network can push out delivery dates. The other problem is that if you sell a 100MB pipe $995, after waiting 120 days for install and turn up, you get that commission check of $150. That isn't going to go far. You need to be selling deals every week. Not dabbling in it looking for a whale.
So while I understand the side hustle on being a partner, I don't know how anyone can look at it and call it easy.
An Agent is often described as a lifestyle business, too. Sure there is flexibility and monthly recurring commissions help, but you only get to eat what you kill. Time off comes with an opportunity cost.
That lack of a guaranteed check accompanied by those luxurious benefits are usually the deterrent to a switch from CM to partner.
]]>A better analogy might be Thermal Expansion and Contraction.
Channel heads tend to have this mentality of "Let's sign up EVERYONE!" The more we sign up, the more sales we will make. Logical, but false.
A bunch of things bottleneck this thinking including on-boarding, training and activity of "all the partners you can sign." See, Channel Managers who are the face of the company to the partner have a physical limit to the number of partners that they can effectively work with. It varies depending on the size, activity and engagement of the partner. But there IS in fact a bandwidth issue -- the Channel Manager (or CAM or Partner Manager) runs out of time in the day to read/return emails, texts, calls, quotes, and solve problems.
Another factor to impact this strategy is the co-marketing dollars. Partners want some love. That love comes in the form of marketing funds, attention, speakers (on webinars and at shows), training, etc. A provider only has so many dollars available to spend for this. And again we run into the human resources bottleneck.
If you have SYNNEX, ScanSource/Intelysis and Tech Data as your partners, you owe some fairly big MDF as well as have a duty to appear at two shows every month (sometimes more than two). Travel and time every month.
The contraction comes when the data comes is collected. At some point, you signed up too many un-aligned or un-engaged partners. In other words, the ROI of this false strategy has hit the books.
At this point the announcement is made that the channel is being consolidated to 5 to 10 top master agents. (We have seen this play out at a number of carriers over the years and it will be happening again in the next nine months.)
On the flip side, an agent will use between three and five master agencies for his business. Also, a number of masters have pass-throughs to other masters. There are volume groups like The Agent Alliance. So do you need to have an agreement at all of them? NO!
What could be affecting your sales instead of "not enough feet on the street"?
Here are three resources to help you.
]]>There is an interesting article on Business Insider about Facebook making switches and routers for themselves. But now a number of telcos globally are trialing the gear. That doesn't help Cisco at all.
At the same time, the carriers and just about every other managed services provider is offering SD-WAN. These deployments are white boxes. Cisco, Juniper, ADTRAN and others are being replaced at the edge of the WAN by white boxes.
It is also hurting VADs like Tech Data, because these boxes are NOT going through distribution. They are being distributed by the carriers like EarthLink and TPX directly.
ADTRAN is making moves to stave off extinction with hardware as a service, managed wi-fi, and SD-Access.
It's interesting because Amazon's Chime is competing against Webex on the collaboration space. Carriers are competing on the WAN CPE space. It's VAR channel is modeled on hardware sales and installation. Selling software is not nearly the same business model as hardware.
This is just an observation - and it will be interesting to watch as these things shift.
]]>The certifications not only created a lucrative industry but launched Brand Ambassadors into every business around the globe. Those Brand Ambassadors with their certifications were going to be buying Cisco or Microsoft.
An additional point about the certification, it was a buy-in from the partner. No fogging a mirror to be a partner, you had to take a test. You had to have skin in the game. I'm certain that won't be a telecom channel component any time soon, even though we are at a time when well trained and knowledgeable partners are desperately needed.
Finally, these companies build demand. They market to the channel, but they also market to the buyers, prospects and customers. Demand is a big piece of the puzzle.
One final factor was grass roots building with user groups. Microsoft did this better than Cisco. These user groups provided training, access, networking and more. VMWare has a large user group in Greater Tampa Bay. This helps the certified techie as well as the company. (You want well trained and engaged Brand Ambassadors.)
]]>What happens with Broadview Networks under Windstream? Windstream is only midway through its integration of EarthLink. It will now have 8 UC platforms.
That isn't too confusing to all of the sales channels. Eight to choose from! WIND should be a one stop shop for everything UC and SIP at this point. [Similar to VARs hitting up a VAD like SYNNEX for many of these same vendors.] To do that, WIND would have to hire in some name brand SIP Experts to start beating that drum - loud, clearly and often. Currently, the message is a new flavor of UC every webinar. No over-arching
The noise about T-Mobile and Sprint merging is getting louder. Here's the problem: Recall the mess that the Nextel-Sprint integration was. This will be worse. Why? T-Mobile didn't even really integrate MetroPCS. What synergies are there really? It would simply be to get bigger, not to be a better competitor. For at least 24 months, VZW and AT&T would simply kick its ass - and they wouldn't be able to do anything about it.
That sums up the Level3-CenturyLink merger as well. That is scheduled to start in September if California and a couple other states don't derail it. This will be a mess for customers and partners alike. The product set is so different. Level3 is wholesale VoIP, international, transit and transport. CenturyLink is consumer, small business, mid-market, broadband, voice and some cloud. Very different sales skills.
Both exited data center, but CenturyLink has acquired many cloud and security companies in the last few years. They haven't done much with it because they don't really sell to Enterprise like they would need to. Plus Branding. Plus confusion over at Savvis after that acquisition.
None of that factors change post merger. None. One problem with many of these telcos is that they don't bring in fresh blood. Frontier just hired from Verizon for VP of sales and retention. Pull in someone from outside telco. The biggest hurdle: Culture. Culture eats Strategy for lunch.
Most of the major CLECs are gone: XO, EarthLink, Level3. Others are transitioning: TPX, AireSpring, Birch, Mettel to try to figure out what business looks like with network resale and managed services. It is a different world.
Everyone was betting on UC, but most couldn't get over the deployment headaches. Then when the price war started, they not only weren't prepared for the war, but couldn't or didn't get into it. The latest top 10 leader board for UC doesn't look too much different than 2015 or 2016. Next year it will for certain.
Windstream and Charter should look different in 2018.
Cisco's Spark revamp at EC17 coupled with its latest acquisitions and lay offs might have an effect on Cisco UC seats later this year. Or the acquisition of West Corp by Apollo Management for $5B and change might stall sales. Some of Cisco's other partners - like FLTG in NY - also got acquired. Integration after acquisition always affects sales (and retention).
AT&T and VZ look to be big winners while the CLECs shift and transition. Some of the other players in the space - like Zayo and GTT - also made acquisitions. But are they really replacements for Ma and Pa Bell or even WIndsream, Level3 and C-Link? They have a window of opportunity that is for sure.
Zayo grabbed ELI and Integra. All of the press is about fiber to the tower, so I am thinking that will not be a C-Link or WIND alternative.
Comcast will pick up some business. At $6B in CLEC business revenue now, it almost surpasses most of the CLECs in revenue. They need to take some friction out of the quoting and ordering process. (Charter too! Unbelievable that at its size, it is so arduous to process quotes and orders.)
Until the next merger is announced this is what it will look like. The channel often went to CLECs because of channel friendly attitude as well as suitable product set. This time round the channel will be looking at companies NOT in the midst of turmoil. Ease of doing business will be relative. Just another reason businesses like using channel partners: so they don't have to deal with it!
]]>It isn't a sprint. It isn't about just growth. It is about steady growth and customer experience. Also, product-market/fit.
On LinkedIn this morning, there were at least 3 posts from channel managers closing business for their partners. If the channel managers are closing business, that is a better use of time than recruiting. And maybe a trainer is needed to teach sales skills and product to both channel managers and partners to keep those skills and knowledge fresh.
The other topic on LinkedIn this morning: SD-WAN. All generic info being shared under the umbrella of the vendors. This is not a good start to content marketing. This is not a good start to branding and positioning.
Seth Godin is giving a 100 day online marketing seminar. Take it!!!!
CenturyLink data centers were acquired by a group of private equity firms (Medina Capital and BC Partners) for $2.8B. This group will combine the 57 data centers with four cyber-security and data analytics portfolio companies to form Cyxtera. (Who picked that name?) The CEO of Medina Capital will be running the new firm and he used to be CEO of Terremark.
Verizon closed on the sales of their data centers (formerly Terremark) to Equinix this week. Windstream sold theirs to Tierpoint a while ago.
The divestiture of data centers by Windstream, Verizon and Centurylink does not represent a bad position for data centers. It means that the telcos didn't have the skills to leverage DCIM. The data center market is hot and growing. Inter-connection, peering, colocation and cloud computing infrastructure (IAAS, PAAS, VM, Hosting) are all in demand right now. Data center construction is growing by 8% per year.
Polycom was acquired by a PE firm. Many top execs have left. One went to Star2Star. This week the CMO went to Intermedia.Net.
]]>By that, I mean, if you can fog that mirror, you are a partner.
Shouldn't partner programs be more like the NFL or NHL draft than an army recruitment office?
Wouldn't it be better to not sign up everyone?
It would certainly help providers' partners if there was demand for the service offering and if there was just a handful of partners to supply that demand. Instead we have little demand* for the services and everyone can be a partner.
That is the VAD theory, because a value add distributor is similar to a store. They can carry anything. They are in logistics, warehousing and distribution. That is all the value they bring. In stock or not?
On the Master Agent side, I just don't understand the signing up of 20+ UC providers, 10+ data center providers and 10+ Microsoft Partners.
For perspective, USLEC had 26,000 clients when Paetec bought them; Cbeyond had 51K when Birch acquired it; 8x8 has 48K. These aren't large numbers. "In 2012, according to U.S. Census Bureau data, there were 5.73 million employer firms in the US. Firms with fewer than 500 workers accounted for 99.7 percent of those businesses, and businesses with less than 20 workers made up 89.6 percent." [SBE] The sweet spot for businesses, according to CompTIA, is 10-100 employees, which represents a 20% slice of the overall market - or 1.8 million businesses. FYI, 50K of 5M is 1%.
What's my point? No one is crushing it (or ever will). A lack of funds, crappy marketing (if any), no focus and flawed strategy that is poorly executed are all factors that mess with success in telecom. If AT BEST you are going to get 50K businesses, do you really need 450 to 2500 partners signed up to hit it?
Wouldn't providers do better with the zealots?
Verizon and BellSouth/AT&T used to be exclusive. Partners could only sell their services. It worked out well for both parties. It meant there was focus, specialization. Co-selling worked too.
By signing up every master agency, vendors think they get access to more partners. They don't. Most partners use 5 (five) master agents. VARs use at least 2 (more likely 3) different VADs. So by signing up more partners, vendors get their logo in more places, but they don't get more partners. In fact, what they DO get is to fork over more dollars for events.
The model can't last much longer. And if they did the numbers over the last even 4 years, they would find that Pareto knew exactly what he was talking about. Also, that the amount of busy work given to channel managers is just piling up. Hard to hit quota when bogged down with recruiting, quoting, selling, reporting, funnel and a hundred other things.
What vendors confuse is exposure for demand; logo placement for marketing.
I've written about it often and enough. Where's the competitive analysis of the marketplace? Who is your target? Why do they buy? Why YOU and not THEM?
It is very different with network. Lit buildings and fiber routes are the factor. You don't have that with managed services or security or cloud. The limiting factor for voice/VoIP/UC is LNP which has mostly been solved (except for pockets of independent IOC territories).
Put up the red velvet rope. Sign up, train, on-board and work with partners who actually want to work with you. And limit that. It builds up the relationships that you have. It makes your partners stronger.
It isn't going to limit vendor revenues, because vendors are probably quoting and saying YES to stuff that they shouldn't be. Vendors are NOT getting deals that they would like to - or that they built for - because they are too busy chasing every single partner and every single opportunity. In the process, the vendors are diluting their message (brand) and wearing out their channel managers. But hey what do I know. I have not only seen this playbook, everyone has a copy of it, and yet no one is winning using it.
*DEMAND = after 15 years, UC has only penetrated to 29% of the market? CLECs have been around since 1996 and can't get more than 1% of the market - in 20+ years.
]]>On an agent webinar this morning, Windstream is beating the SD-WAN drum. I understand that SD-WAN is a boon to retail, restaurants, branch offices and rural locations. Not every business wants to pay over $500 for a pipe. They want to pay what they were paying for T1s. SD-WAN will be a boon for broadband providers - satellite, 4G/LTE, fixed wireless, DSL and cable modem. It swings the WAN back to IP-VPN. Is that a great idea in the age of Hacking?
There are other benefits for SD-WAN: ease of management; faster deployment; analytics; transparency; failover/redundancy; but the bell that most CIOs rang at the WAN Summit in NYC was cost savings.
We are going to see a bunch of locations move from dedicated Internet (DIA or MIS) to broadband. From a commission standpoint that will suck. From a vendor standpoint that will be a pain. However, if partners layer on SD-WAN from a provider plus two broadband providers, we might be able to keep the MRR close. This will become the standard configuration for many business locations.
That is the drum that is beating.
As an RLEC (rural ILEC), revenue streams heavily favored consumer services. The RLECs had USF and TDM transitions occur to shake up their business models. Also, cable starting eating their lunch. DSL didn't cut it. The RLECs had to spend to beef up the network for both better broadband and Telco TV. They just did it too late. Now they have to chase the business markets with HPBX, SD-WAN, cloud services and anything else to bring revenue in and margin back.
CLEC margins on resold network are thin. UC isn't killing it, for anyone. Managed services is where the margin is. SD-WAN is just another technology that needs to be deployed for the customer and managed (like managed router or a monitored Internet pipe).
That is why the drum is beating.
Viptela puts it nicely, "In today's fiercely competitive digital-driven marketplace, enterprises must remove complexity from the WAN. WANs need to be easier to manage, cost-efficient, more agile and available, and better aligned with an organization's computer and business needs. The SD-WAN is quickly becoming an essential component of enterprise digital transformation."
This makes it sound like WAN is complex. It isn't really. MPLS is not that hard or complicated. It is easier than IP-VPN and more secure. (Or at least it is for me.) With many network operators connected to cloud platforms (like AWS, Rackspace and Azure), adding a direct connection to a WAN is simple. (Or if the customer has a data center presence,he can tap into the cloud via a peering fabric.) There are ways to architect a secure, manageable WAN.
Partners will be selling SD-WAN, the flavor of the year. I just wish they had not all been calling it SD-WAN and had actually incorporated it into a branded service offering. That could have led to differentiation and some targeting so it doesn't become a commodity so fast. (Oops! Too late.)
]]>If you cannot see the flash mp3 player, you can listen on SoundCloud HERE or download the mp3 HERE.
]]>Since most product markets are flat (think broadband, cellular, voice, TV), the race is on to take customers away. Without a better mouse trap, it is all about price.
In an industry (ours), where technology is painted as the product and we mainly sell replacement products (SIP Trunks for POTS and PRI, Ethernet for T1, 4G for DSL), the price compression happens quickly. This means less commission and less income for the partners (agents).
Despite this dilemma and the revenue decline it has caused carriers that has resulted in industry consolidation, carriers have not done enough Product Market/Fit testing. Once again they go wide instead of deep. (At least EarthLink went deep into Retail.)
Money is only left in verticals and specialization. HIPAA and other compliance allow for a discussion about business needs, not cost savings. Talking about business needs, outcomes, and pain points are how you move away from the RFP process.
Selling into verticals means that you can speak their language; bring best practices (or at least anecdotes); and word of mouth is louder in a silo.
This is just part one of several to come on how partners can make more margin.
]]>Was it just October that Windstream let its small business customers go? At that time didn't they tell the partner community that they only wanted deals $1250 and above? Didn't they cut commissions on Paetec customers?
This is a company that owns Allworx but pushes Mitel and Avaya on alternating months. They run both Metaswitch (and took on more seats on Meta with EarthLink) and a Broadsoft. So now they buy a 6th platform: Broadview's proprietary one. (I hope they kept the chief developer or someone will be searching through code for notes for months.).
Do you know how expensive it is to run 6 platforms? Or even 4? Ask Vonage how much that costs (they run 4).
WIND wants to compete head to head with RC, 8x8 and Vonage in the OTT market. Interesting because data demonstrates that the average OTT deal is $400, well, below the $1250 floor. Even Broadview admits to an ARPU of almost $1000.
I will get emails and calls that I am negative. Chris will ask why I can't write something nice. I'm not being mean. I am observing a schizoid strategy. Partners cannot turn their business model quarter to quarter to suit the whims of a vendor. It doesn't work that way.
A $5.4 Billion annual revenue up against $5B in debt. No more equity in CS&L, the REIT they spun off which renamed as UNITI Fiber. "Operating income was $515 million. The company reported a net loss of $384 million." This is a company that pays out healthy dividends to keep its stock afloat. It has debt payments as well, while acquiring EarthLink and Broadview (and before that data centers it then sold off.)
I hope they can at least take a note from EarthLink: Point yourself at a vertical or two and get good at it. EarthLink had captured the retail vertical with a focus and product fit unseen in the CLEC world. Windstream needs to do more of THAT.
Keep the ELNK Retail division rolling along. Leverage the Broadsoft Hospitality product to find a way to take Hospitality back from the cablecos. The REIT (CS&L) is on a tear buying up fiber and chasing E-Rate. That is a sound strategy.
I wonder if, like CenturyLink, being borne from a RLEC just makes sound strategy tough. So many fat years with USF monies pouring in and no competition that when the spigot went dry, competing just isn't in the DNA. Hint: hire Dabble Lab. Get Creative. Try stuff. Take real input.
SD-WAN is not the panacea that everyone is hoping for. If SDN is implemented the way LNP and TTU is now, oh boy! A few agents were on FB discussing ZTP (zero touch provisioning) as the end all. I remember Microsoft Plug and Play. It took years to get right. It will all depend on the CPE and the SDN implementation. And I am not counting on it. [And that is just CPE ZTP, not the handsets and UCaaS or Office365 or other software deployment. Just the WAN and CPE.]
Broadview has 20K customers, of which 7300 are cloud users. That isn't scale. That is less than one-third the of customers 8x8 has. Vonage has 650K seats; Broadview has 182K active users. Scale costs money. Scale requires talent. Scale demands process and procedure. We'll see. They didn't even finish the EarthLink integration so this should be fun.
**CRN - click through 10 slides just to read a half page story on this site! What a mess!
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