On Rad's Radar? - hosted uc Archives

CloudTC and N-Able Acquired

2013-05-22T13:55:23Z

"Australian-owned IP PBX systems company, Vixtel, has completed the acquisition of Silicon Valley based glass phone developer, CloudTC, for an undisclosed figure," according to news reports. I really liked this phone when it came out. It was ahead of the curve. CloudTC was a Startup Camp Comms candidate.

"Vixtel CEO, Terry Crews, said the acquisition would enable the company to offer Australian businesses a product that brings smartphone technology to the desktop. Crews mentioned the move is also consistent with Vixtel's strategy to own, develop and maintain all technology within its product offering." Those are some pretty strong arguments for this kind of move. How many Hosted PBX companies can say that? Just the hardware folks.

In other news, another Startup Camp Comms winner, VerbalizeIt, was on Shark Tank.

SolarWinds is acquiring N-Able for $120 million in cash. This adds RMM (remote monitoring and management) to Solar Winds catalog of IT services for the small business (sub-100 employees).

M&A: 3 UC Deals and a Cable

2013-05-16T18:50:20Z

Well, it was quiet, but now M&A is heating up with the weather.

"Private equity firm GTCR has acquired NewWave Communications from Pamlico Capital." NewWave is a cable company in the Midwest with 90,000 subs.

Iotum acquired FreeConference.com when it bought the assets of GCP. Calliflower is a conferencing service owned by iotum.

Evolve IP now calling itself the trademarked Evolve IP, The Cloud Services Company™, has "announced that it has completed the purchase and customer integration of iPiphany of Chicago, Illinois and Semperon of West Chester, Pennsylvania. All three companies are on Broadsoft, so integration should have been easy. I wonder if this is the start of the Broadsoft service provider consolidation.

Infonetics announced its US Hosted VoIP winners. Comcast came in first again. Comcast is likely Broadsoft's largest customer in the US for Hosted PBX. (XO is supposedly its largest US customer, but XO mainly sells SIP Trunking.)

Think about this: in 2003, Broadsoft's second customer started up with Hosted PBX, which means it has been 10 years for Hosted PBX. Ten years, 1000 providers, and only $1.5 Billion in HPBX revenue - that is sad.

In the same vein, ten years means that the VC and PE firms have been sitting on big investments for 10 years without cashing out! That is like wearing a cast on a broken limb, having an inch that you can't scratch, and counting the minutes until the cast comes off.

I wonder when Verizon and its VCE with Google integration will kick in and start taking names. I know it will take time. I mean, it took this RBOC 8 years to hit 50% penetration in just one market - Dallas, according to Fierce. BTW, 50% penetration is what it needed to be financially successful, according to the VZ CFO.

The Hosted PBX space has a couple of big problems: the big guys - VZ, Comcast, Cox, Bright House - are now in the game. They have a brand advantage and deep pockets. I am already hearing about many deals that are going to brands, including to EarthLink over an independent or stand-alone VoIP company.

I see more deals happening soon.

Big Changes at Broadvox

2013-04-14T21:56:37Z

Just over a year ago, big changes happened at Broadvox. Bruce Chatterley, who was CEO of Speakeasy until MegaPath absorbed Speakeasy and Covad, became President and CEO at Broadvox. As is often the case in telecom, top executives bring in their whole team. Chatterley hired Chris Gellos, who was head of sales at Speakeasy, to be EVP of Sales at Broadvox. Many more former employees of Speakeasy were hired. Broadvox CMO David Byrd left for APNI, where he proceeded to hire Chad Krantz - and other Broadvox employees followed.

Time and again, I have remarked that this kind of thing won't work. Unless the team had knocked it out of the park before, why would it work again? And let's face it: There aren't that many companies knocking it out of the park. Lots of BB, K, and singles. A few people told me that it's more about surrounding yourself with people you can trust.

Both Gellos and Chatterly are moving on from Broadvox, according to an internal memo delivered late Friday. Andre Temnorod will be assuming the roles of CEO and president; Pete Sandrev will be taking over Sales.

Despite claims by analysts and IP phone vendors that HPBX would rock this year, VoIP is selling, just not a lot of Hosted PBX -- or not much more than normal. SIP trunking and other dial-tone replacement are making the most gains for to a number of reasons.

One reason: IP-PBX (premise gear) hasn't experienced declining sales like so many predicted.

Another reason: selling SIP Trunks and replacement dial-tone is the fastest form of sale (order taking).

There is -- and will continue to be - many personnel changes in the telecom/VoIP space in 2013. Wait at see! It will be a wild ride.

This is a tough business - Hosted PBX. It should be about business process improvement, outcomes, productivity -- but most people don't want change. How do you sell productivity when people can't figure out (or refuse to figure out) the new phone system? How do you sell BPI when a majority of people abhor change? Uphill climb.

Still, if you are in the HPBX/UC space, then the key is to put the best team together you can. Find A players. Let them do what you pay them for. What should the C-Suite do? Help the A players perform as best they can. Upper management's job is foremost to remove obstacles. Obstacles get in the way of sales. And it all comes down to sales, right?

Is the Channel Too Lazy to Sell Cloud?

2013-03-29T12:31:56Z

Talking with channel managers lately in the Hosted UC space, well, has been depressing to be honest. No one is having fun - or knocking it out of the park. Yes, there are pockets of success - mostly from verticals or niches (surprise!).

So one CM made the comment that channel partners are too lazy to sell cloud. "It is much easier to sell network or a box than it is to sell cloud." There is some truth to that.

VAR's and Inter-connects have a similar business model that is centered around selling a box, installation and support. So cash flow comes from selling the box. They receive a chunk of money upfront. I am not certain that any of them survive off can recurring revenue yet.

To remedy this, some master agencies and vendors are looking to pay some of the commissions upfront, but this requires risk and financing, which devalues their own companies (and makes an exit harder).

From what I have seen and heard, most channel partners - agents, VAR's, Inter-connects - sell Hosted PBX as a third option after all else fails -- and typically sell it as cheap VoIP.

To me, this means that the service providers and the CM's have done a poor job of training and communicating who the target customer is, why they should buy UC/HPBX/Cloud, and what the value proposition is. Am I surprised by this? Not in the least. Why?

For one, many cloud companies have too many executives from the CLEC world where it has always been about Arbitrage - "Let me save you money!" And, let's face it, CLECs know nothing about marketing or positioning or branding - and neither do most cloud providers.

The other big problem is that most of these companies are enamored with their technology - as if the market gives a crap about their technology. People have iPhones and tablets and a bazillion apps. You think your tech is cooler than that??

This was a problem that ISP's had too. All techies that just like to be techies. The reason that 8x8 has grown is because some where along the way they switched from being a tech company to being a sales and marketing company. Most cloud providers are not there yet.

It is also very challenging to sell cloud services, especially UC, with its myriad pieces and components. What channel partner is going to remember all the stuff about your UC product and about the other 10-12 services that he also offers???? Um, not very many.

The flip side to this is that most cloud providers don't really sell direct. They dapple in it because it is expensive. However, if you haven't sold it, you don't know how to train or coach others to sell it either. You don't have the sales process and questions in place as tools for the channel partners.

There is another challenge right now: sales sizes are too small to cash flow for the provider or for the channel partner - so that will grind things to a halt sooner rather than later.

My CM pal also mentioned that partners don't want to explain all the features of HPBX/UC, do an ROI or TCO, check the WAN and LAN, etc. It is far quicker to just sell network or a box - and move on.

The reason that UC is stuck is because it is not exactly like what people have now. So there is training and education needed to the customer and her employees (as well as to the channel partners). This could be fixed IF the channel would actually eat the dog food. Not many channel partners actually use cloud services. If you drink the kool-aid how do you sell it to someone else? (Sales is about the transfer of emotion - if the partner isn't excited about your product, why would the customer be?)

There are a number of reasons that UC isn't selling. (Another is too many providers that all look the same.) As my brother tells me, "But, bro, Lync is selling!" Sure as part of Office 365 or to Fortune 100. And mid-sized businesses with more than 250 employees are buying UC, but are they buying it from the channel or from one of the top carriers?

Another trend is that smaller, unknown cloud providers are losing deals to better known companies - like Comcast, EarthLink, etc. WHy? Trust factor. Brand is a trust factor. So it comes back to marketing.

So is the channel too lazy to sell cloud? Or have the cloud providers just done a really poor job of picking partners and/or marketing?

BTW, there are certainly channel partners selling cloud, but they are dedicated to doing so. They drink teh cloud kool-aid.

The UC Space Right Now

2013-03-26T14:09:48Z

I was chatting with another industry blogger recently. We were discussing how there are a lot of VoIP Providers out there. I estimate it at over a thousand. However, I don't see the Hosted PBX space making huge strides. Before VoiceCon, the numbers showed that premise based PBX units were the stagnant -- not decreasing.

My associate says, "Everyone has a similar platform and features; sales are predicated on relationships and lacking that price. Key system emulation is big for VSB" (very small business = less than 10 employees).

In Icarus Deception, Seth Godin describes the marketplace changes that we are living in with the decline of the Industrial Age. Godin says that we live in the Internet fueled Age of Abundance.

"We do have an abundance of choice, an abundance of connection, and an abundance of access to knowledge. We know more people, have access to more resources, and can leverage our skills more quickly and at a higher level than ever before. This abundance leads to two races. The race to the bottom is the Internet-fueled challenge to lower prices, find cheaper labor, and deliver more for less. The other race is the race to the top: the opportunity to be the one they can't live without, to be the linchpin we would miss if he didn't show up. The race to the top focuses on delivering more for more. It embraces the weird passions of those with the resources to make choices, and it rewards originality, remarkability, and art." [Seth Godin]

So why isn't UC selling?

People suck at selling it. Companies suck at marketing it. Companies stink at deploying it.

I know that is harsh, but how many businesses ask for UC? Um, none. They want a cheap phone system and their smartphones.

If Apple made a UC platform, everyone would buy it. Why? It would be user friendly. It would be a little different from all the rest. It would be branded and marketed well.

No one even does anything cool with the IP Phones! Those full color screens on those tiny computers that run XML and have numerous soft buttons that are useless.

The Broadcore Connect UC bundle includes voice, video, messaging, conferencing and mobility solutions with various connectivity options. How is that any different than XO's or any other Broadsoft BroadCloud BroadOne?

Everyone is offering a bundle - ANPI, VoIP Innovations, everyone! It's worse than the allergy aisle at the pharmacy!

"Successful organizations have realized that they are no longer in the business of coining slogans, running catchy ads, and optimizing their supply chains to cut costs." - Seth Godin

The Cloud Communications Alliance in Clearwater

2013-02-05T18:02:23Z

The Cloud Communications Alliance is meeting in Clearwater, FL.

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Larry Lisser from EMBRASE presenting at the CCA meeting in Clearwater FL.

Joe Marion, President of the CCA, welcoming everyone this morning.

VoIP in 2013

2013-01-17T17:26:10Z

It's January and people are still making predictions about 2013. Dave Michels wrote a nice piece about the history of Level3's 3Tone service, which I was pretty familiar with due to four of my clients rushing into the void to sign up - just as Level3 was aborted the service. I view this move by Level3 as one reason that I don't see Jim Crowe as the visionary others do.

Today, we see VoIP Innovations rolling out a complete wholesale private label VoIP service. It might be too late for another entrant in the space, but I think the wholesale Origination/Termination space is flat with low margins, so it's a pivot towards higher margin and new prospects.

Most predictions about VoIP center on two things - mobile and video - just like they have for the last few years. If you really want business VoIP to take off, you need more inter-connection, in order for HD Voice and Fax over IP to work across NNI's. Remember the VoIP Peering Fabric?

According to Frost, "Approximately 42 percent of non-cloud unified communications users intend to deploy hosted phone systems in the future." Well, seeing as how the Hosted PBX market is still smaller than Centrex that didn't require much of a crystal ball. As the RBOCs delete copper, Centrex will die too. (Seems strange that they would be so quick to get rid of POTS and Centrex service since the margins on those are big.) Most of that Centrex business should convert to Hosted UC systems. The only thing stopping this conversion is the sales teams of the cloud comm companies. If ever you were going to invest in your sales teams, NOW IS THE TIME!

Why? People are not buying the same way as they did 4 years ago. The services being sold are not the same as 4 years ago. However, the sales people ARE the same as 4 years ago!!! Get the disconnect???

Will the mobility piece be a hurdle for some Cloud Comm companies? Maybe. I think that the SP (service provider) that can sufficiently integrate their MVNO with Hosted Exchange and their Hosted PBX offering will have an advantage. I would say be a big winner but to win, that SP would need a great sales team and other elements of the organization at the peak of its game (billing, customer service, deployment, on-boarding).

Congrats to Vidtel for scooping up Alex Doyle as VP of Marketing. Doyle had a long run at Broadsoft before a short stint at Polycom. Expect big things at Vidtel, a video conferencing company that doesn't rely on hardware as a crutch.

On that note, ACT Conferencing, one of the leading conferencing service providers in the US, is announcing a partnership with Vidtel to deliver cloud-based video conferencing. ACT will be a channel partner of Vidtel selling the Vidtel MeetMe service. Just an example of the ongoing shift in video conferencing towards cloud applications (from hardware).

One last trend I am seeing is that a lot of SP's are leaning heavy on the channel for sales in 2013 - FreedomIQ, Vidtel, Panterra and EarthLink among them. [Note: ELNK just laid off 15% of its workforce.] How effective that will be depends on a number of factors that not all these companies have figured out yet. The glaring hole in that strategy is that if you have issues - with the service, the channel program, tech support - the channel will abandon you. Even if you fix the problems, you have to regain the trust you lost. It's a tough road.

I think 2013 is a year of opportunity for any cloud services. I just don't know who the winners will be.

The Pivot to Attractiveness

2013-01-17T17:06:51Z

I spoke with Mike Cassidy at SUTUS this week. SUTUS is finally seeing success after years of trying to find its niche in the SMB PBX space. SUTUS had a couple of pivots along the way - and usually a new CEO to go with each pivot.

Now they are on the path to success due to stumbling upon a vertical.

When you are in a hyper-competitive market like SMB phone systems or better yet Hosted PBX, you have two choices: you can chase everyone as a potential customer or you can tell a better story to attract the right customer to you.

Most of the Hosted PBX space spends dollars and days chasing low hanging fruit instead of compiling a database of good clients within one or two verticals.

What is so special about a vertical? At least three things. Less competition, more word-of-mouth, and you learn the inside language to provide valuable, specific benefits to the vertical.

I hate to say that VZ was the first one to take a step in that direction by launching VCE with Google Apps integration but the fact is: it's true.

The Cloud Comm Alliance has a meeting come up in Tampa Bay on Feb. 4. I hope that I will hear a couple of stories about a pivot or two where these service providers have decided to attack a vertical to hack some growth like SUTUS did.

Am I Selling Cloud?

2013-01-07T16:34:47Z

I signed up as the first agent for Broadsoft's second customer in 2003. They were unprepared to sell via the channel, and even less prepared to market their offering in general.

In 2005, I signed up as an agent for another Broadsoft shop. It was a wholesale offering for service providers. The company had problems delivering quality service.

When I look back at all the VoIP companies I worked with, most sucked. They could not deliver on the service promises. Mainly, I think because they were in it for the Arbitrage.

I had a long discussion with a reader on Friday where he expressed concerns about most telecom and VoIP companies treat engineers poorly. He mistakenly thought that CLEC's and VoIP companies were in the engineering business. They are not. They are sales & marketing machines that happen to offer VoIP. The engineering, the service delivery, the customer care -- are all secondary concerns. Selling and billing are the primary concerns.

When I say this industry is built on Arbitrage, I mean that since the dawn of the first IXC, any competitor in this space has been about "I will save you money." It has never been about building something better and growing the total revenue -- it has always been about selling a cheaper substitute for the ILEC. This is why the debt is high and the revenues are flat or declining for most companies.

One reason the ILECs are winning is because their replacement services - voice, texting and mobile data -- actually cost more than the replacement services!! This chart shows that mobile data revenue has surpassed fixed broadband revenue. Of course it has -- mobile broadband is expensive!!!

RAD-INFO INC has signed a lot of NDA's and a lot of agent agreements to sell VoIP and other cloud services. Usually it has amounted to very little.

My clients have been selling cloud services - like virtual desktop, Hosted PBX, Hosted Exchange, XaaS, and VPS - for a long while. I only sell to an end user through a client service provider. I am selling cloud, but I am selling it to the service providers and through them to the end-users.

From what I have seen, the hype of 2012 has certainly helped the marketing for cloud services, so 2013 should be the year that the needle actually moves on the revenue side.

Of course that depends on whether the service providers can actually sell their services and provision them to the customers' satisfaction. (Both of which are up in the air presently.)

A Little Bit of Tuesday News

2012-12-18T17:11:46Z

365 Main returns to the data center space with its completed $75 million acquisition of 16 data centers, in the US from Equinix. Some Equinix execs came along with the acquisition. The data centers - located in Buffalo, Chicago, Cleveland, Dallas, Detroit, Indianapolis, Nashville, New York, Philadelphia, Phoenix, Pittsburg, San Jose, Seattle, St. Louis, Tampa and Washington D.C. - seem like the former Switch & Data facilities. It was a great deal for 365 Main (and thier VC backers).

An interesting thing is happening, 8x8 has seen its stock increase in just the last six months from $4.25 to $7.40. What gives? Some of it is the hype around cloud. A good part of it is that the company is really hitting on all cylinders. The financials are looking good. It broke $100 million in business VoIP revenue. That's a milestone. The third reason is the PR - scoring a couple of patents and the Gartner Magic Quadrant. The final reason is that 8x8 is a good takeover target.

Sprint is busy with M&A activity. After Japan's Softbank agreed to invest $20 billion for a 70% stake in Sprint, the cellco bought some spectrum and customers from US Cellular. Now it has finalized a deal to acquire all of Clearwire. The $2.2B deal has been backed by TWC and Comcast - 2 of the three cablecos that own stakes in Clearwire. (the third is Bright House). So if all goes as planned, Sprint will own Clearwire and its spectrum, but will still have a spotty network that it needs to build out - AND will still be a distant third in the US cellular market. Another fine Hesse deal.

Cbeyond rolled out its own Broadsoft based Hosted PBX service. I have no idea how that meshes with their previous hosted Asterisk server in a cloud container. I also don't know how that will go over with its indirect channel. Cbeyond becomes just one more company to roll out Hosted PBX. Is there anyone NOT offering HPBX? The only interesting one so far is - and I hate to say it - VZ with its Virtual Communications Express. The interesting part is that it is OTT (over-the-top) and integrates with Google Apps for SMB. Thus, targeting the 4.5 million SMB's using Google Apps. Who else does that?

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 ;)

Microsoft Lync in my Opinion

2012-11-28T14:48:12Z

Have you been hearing buzz about Microsoft Lync? Microsoft is spending millions on marketing it - and I hear that the Fortune 100 have deployed it but in limited roles.

My brother works for a Microsoft integrator who has 135K seats deployed. I'm not even sure what that means, because Lync isn't being used exclusively as a landline or PBX replacement. It has many uses and not all of them are apparent. For example, it is can be deployed just for Presence and IM/chat. It can also be used for a conference bridge (like in the Office 365 bundle - does that constitute a seat?).

Sure, it CAN be deployed as a voice replacement BUT you still have to have SIP trunking from a voice provider. (Lync is not a dialtone provider; that will come from the SIP Provider.) Lync will act like a PBX in this setting.

Remember that Lync is the 3rd edition of Microsoft's Office Communicator Server. IMO, MS has not decided what they want from it yet.

Skype, mobile apps, messenger, Presence, PBX, conferencing -- it is all very cludgy. By that I mean, it isn't straightforward; it isn't user friendly.

My fears lie in the fact that Microsoft can't make a product that doesn't have to be patched every day due to too much bloated code and too many unnecessary features. And Lync has a lot of features. (Adobe is giving it a run for its money in patching Flash though.) Then by the time the user has a stable operating system (like XP SP3), Microsoft rolls out a new one - and we start all over again (from unstable and what many would call beta!)

My brother likens Lync to Sharepoint. Once people know what it can do... Well, more like, once it is thrust upon the users.

When you try to be something to everyone, you end up lost.

Telovations is Getting Acquired!

2012-11-26T18:41:00Z

As the Hosted PBX space is finally gaining traction, carriers are buying instead of building. ShoreTel bought M5. Comcast long ago bought NGT. Even Broadsoft bought a service provider, Adaption Technologies.

It's public: Bright House Networks, a top 10 MSO, is acquiring Telovations, a Broadsoft based UCaaS provider. Tampa Bay is not only home to Telovations but one of the biggest markets for BHN.

Telovations will become part of the Enterprise Sales division at BHN, reporting to Craig Cowden, SVP, Network Engineering & Operations, and Enterprise Solutions, Bright House Networks.

This makes me wonder about the rest of the Cloud Communications Alliance members. Who's next?

On a similar front, 8x8 just made Gartner Magic Quadrant. It's stock is more than 50% higher than it was in June. Analysts have it a buy due to strong revenue growth. The market cap is about $457M for approximately $110M in revenue. It would be worth it for someone like TWC who does not have a Hosted PBX service yet. That is the funny thing about the BHN-Telo deal: TWC usually does things first and BHN follows. This time, it may be the other way around.

Moves and Changes This Week

2012-11-19T16:29:14Z

Cisco announced plans to acquire Meraki, a managed Wi-Fi company, for about $1.2B.

Broadsoft announced UC One and now Rich Communications Services (RCS) to be added to its BroadCloud SAAS platform. [UCStrategies]

After Softbank put $20B into Sprint, Sprint turns around and buys some US Cellular markets for $480M. Consolidation - that's all we have left as an industry.

RUMOR! Google and DISH launching wireless network! This is the rumor, since the FCC is about to rule on spectrum that DISH controls (40 MHz of MSS S-band spectrum in the 2 GHz band, that the FCC renamed AWS-4). This spectrum may get cropped and added to the H-block auction. Should have an FCC announcement by Thanksgiving.

Right now, One in five smart phones sold in the U.S. is from the Samsung Galaxy series. I guess the $1B patent fine was nothing!

Being Choosy is Being Profitable

2012-11-12T18:43:19Z

There was a lot of talk about Insurance in this political season. Insurance companies decide who they will cover. For example, in Florida, insurance companies decide who they will offer a home owners' policy. In Healthcare, the insurance company decides, not only who they will cover, but what they will cover. This maximizes profits for the insurance companies. Maybe this is a model that CLECs and ITSPs should look at.

In a small way, fiber companies and MSOs have a similar strategy, but it revolves around fiber build-out and three year payback models. If the customer can be profitable to the carrier in three years, then the company will construct a fiber route to his premise. If not, either pay for the construction or find someone else.

Being choosy and able to say No is significant. Right now, cablecos wants a signed LOA before quoting out a prospect's site. If the prospect doesn't like the letter of agreement (that closely resembles a servcie order), no quote from Cox. The prospect is flummoxed. There is a reason that companies have policies and one of them is to be profitable.

Recently, I spoke with a Hosted PBX company exec about the difference between a CLEC sales approach and the HPBX company approach. The CLEC was working on lower margin while grabbing market share. The CLEC has access to the capital to win deals on lower margin. The HPBX company wants to maintain margin, but doesn't like losing deals. Either you chase market share or you chase profitability.

In some ways it is a public versus private debate. Public companies don't have the same objectives or metrics that a private company does. Public companies have more access to capital, but are slaves to the transparency and need to maintain a share price. This mindset is anathema to many private companies struggling for growth amid cash flow and capital issues.

I am a big proponent of selective selling for a couple of reasons. It is more profitable to be selective. The take-away close - the idea that someone can't have your service - works in more often than not. It is easier to create a value statement or USP for a target audience. It is also cheaper to market to a target audience as opposed to the general marketplace. Learn from the insurance industry - be picky about who you target and sell to.

Over the years, I have advised clients about Lit Building strategy. Still, many service providers do not have a procedure, process, strategy or plan to sell deep into a building that already contains a customer. Gone are the days of sales territories. However, as CLEC's begin to sell EoC and multi-location deals, they will learn that they will have to say no. They will say No to single location deals (if they are true to their multi-location strategy.) They will have to be picky about what customers they chase with 30, 50 and 100 megabit EoC offerings, since there are factors like distance and copper pair counts that affect the ability to deliver service. Sales departments will need to get more selective to be profitable.