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.
]]>Highlights:
Smartphone growth is slowing.
Global Internet use continues to grow at 10% year over year, with 3.4 billion people on the Internet as of 2016. [QZ]
Advertising is about visuals (pics/vid), measurement, mobile and engagement. UCG (user generated content) is back.
Growth in Internet population is slowing, but growth in online ads is accelerating.
Combined, Google and Facebook accounted for 85% of the total internet ad revenue growth between 2015 and 2016. [QZ]
Amazon Alexa and other voice assistant devices are disrupting Brands as well as text based search. That is going to effect advertising revenue on one hand. On the other hand, Alexa is pushing Amazon house brands over better known quantities in order to push up margins. And they are winning at it!
Customer Service is about real time customer conversations. The Holy Grail used to be single call resolution that was hampered by silos and technology. Today with AI, Cloud, omni-channel contact center, we are closer than ever to that goal.
Retail has some bright spots but requires strong community and specific target market (slide 58). Or Subscriptions. [Funny, I say the same thing about UC/Hosted VoIP!]
For Restaurants, Eating Out is now Eating in with restaurant delivery. Grocery shopping is also about personal and delivery. Do you see where this is trending?
I am skipping Gaming, China, india, except to say that Gaming is a skills school and the old time the phone is put away (as another tech toy has your attention).
88% of U.S. consumers use at least one digital health tool.
"The rise of fitness trackers and health apps are collecting more user data than ever, while hospitals are sharing more health care information with patients. The average hospital holds 50 petabytes of health care data, and the total amount of that data is growing by 48 percent a year, Meeker says." [venturebeat]
What happens online in 60 seconds: HERE.
]]>Cloud
Cloud adoption remains strong, with 60% of respondents indicating either Initial Implementation (31%) or Broad Implementation (29%) of production applications. Just over a quarter of the respondents are either Running Trials/Pilot Projects (15%) or Discovery and Evaluation (12%).
Respondents were asked to pick their top cloud computing related projects over the next 12 months and Cloud Security (37%) topped the list followed by SaaS for Application Modernization/Migration (33%) and Technology/Infrastructure Refresh (32%) was a close third.
"The [451] survey also asked if organizations are using professional services for their cloud enablement and it turns out that they are almost evenly split, with 41% indicating that they do use professional services - while the other 59% said they do not.
451 Research reports from HERE, HERE and HERE.
IOT
Compelling Business Need (52%) was the top driver for increases in IoT spending while another 48% cited Improved Daily Operational Efficiencies second, and Respond Faster to Customer Needs (43%) was third.
Currently for the vast majority of respondents, 87% said they did not have a dedicated budget for IoT, but rather it is part of their overall IT budget. In contrast, only 13% said they have a dedicated budget for IoT.
IoT presents new deployment challenges, so respondents were asked about their key IoT-related technology priorities. IoT Security (47%) tops the list, followed by Big Data Analytics for IoT (34%) and IoT Infrastructure Equipment (31%).
IT Pain Points
For those respondents that are adding dedicated staff in 2017, the top skillset they are looking for is Data/Analytics (70%). Security (55%) and Cloud Computing (55%) are tied for second and Network Edge/Perimeter (45%) is third.
According to 48% of respondents, Cost/Budget is the chief IT pain point, followed closely by Responding Effectively to Changing Business (45%) and Security Issues/Concerns (41%).
Data Center Priorities and Pain Points
Respondents were asked how they would address a shortage of floor space or power capacity within their data centers. An external fix, to Utilize Off-Premises Public Cloud Providers (37%) topped the list, followed by two internal initiatives: Consolidate IT Infrastructure to Accommodate Power and/or Space Availability (34%) and Expand an Existing Data Center (26%).
Respondents were asked about their highest-priority projects for data centers, and Improving Existing IT Asset Utilization (48%, up 4-pts) remains at the top of the list. Data Center Consolidation (28%, up 2-pts) is a second. Upgrading/Retrofitting an Existing Facility (20%, down 3-pts)is in third place.
]]>I sat down with an old colleague from ISPCON days, Tristan Barnum, and her co-founder at Tellient, Shawn Conahan. We talked about IoT, the Internet of Things, and its similarity to WebRTC. WebRTC was tech; VoIP is tech. Both needed a business plan wrapped around it to make sense. (The technology alone is not a business.) The technology has to be monetized. Tellient is in the business of monetizing IoT.
Conahan describes a marketplace as the place where data inputs into other data. All that data by itself means little. It takes analytics as well as understanding to give that data meaning. Then you can take that data and deliver it to a user in a fashion (or graphical form) that he/she can understand and utilize, in place of a terabyte of ones and zeroes.
"For companies wanting to embrace the Internet of Things to extract the greatest value from their products and customer relationships, the new value chain must include device analytics." [from the Tellient website]One example Conahan gave was over a NOAA buoy, which can be used to improve shipping routes from the same data that the NOAA collects (but doesn't use.) Another example came from GoGo (the satellite Internet provider to airlines) who will use data to help airlines avoid turbulence, which wears on both the passengers and the planes.
In a way Tellient is helping to build a mesh network to connect data from a number of connected sources, add analytics to it and provide a functional output (like graphs).
For me, Big Data, AI (artificial intelligence and bots), math (algorithms + analytics) are all coming together at the same time as sensors, computing and connectivity are all hitting mass market penetration. Look at the Raspberry Pi, a $5 computer! Sensors are under a dollar each. Smartphones can be had under $100. Connectivity is all you can eat. Data storage on AWS or S3 is pennies. All of this hardware is commodity. The smarts - the math - is where the business plan is. It is where the money is.
]]>There are 2.5 billion smartphones on the planet now, according to Ben Evans.
"China now has 656 million internet users. Brazil trails only the US in total Facebook, Twitter and YouTube users, and the country has more mobile devices than human inhabitants." [TCrunch]
Google, Apple, Facebook and Amazon are 3x the scale of WinTel. Not just giants in tech, but giants in the economy as well. More so than IBM or WinTel. [mobile is eating the world]
Machine learning and AI are getting exponentially better each year.
Facebook has between 15-20% of mobile time. And smartphone apps are 60% of all time spent online in USA.
With Amazon Alexa and Google Home (and other voice activated search), what does that do to your SEO or PPC campaigns?! POOF!
There are "nearly 3.8 billion internet users worldwide, almost 2.8 billion are active on social media." The most popular social networks "as of January 2017, based on global traffic figures for unique monthly visitors, shows: Facebook (with 1.1 billion), YouTube (with 1 billion), Twitter (with 310 million), LinkedIn (with 255 million), Pinterest (with 250 million) and Google+ (with 120 million)." [channel partners]
"Cisco and DHL, the world's largest logistics provider, estimated last year that $1.9 trillion dollars of economic value could be created by the use of IoT devices and asset tracking solutions in the global supply chain and logistics sector." [business insider]
NOAA has a new satellite "GOES-16 has four times the image resolution of the existing Geostationary Operational Environmental Satellites (GOES) fleet." See images here.
SIDE NOTE:
That said, people who blame increased connectivity for widening ideological divides misunderstand what's going on. The world is not getting worse, nor are our divisions deepening. We've always had these problems - it's just that connectivity is bringing them to light. Racism, xenophobia, bigotry and sexism have always been there, it's just that we can see them more clearly now. This unprecedented, radical form of transparency feels scary and dark, because it forces us to look long and hard into the corners. But that's also why connectivity is so important. Billions of people are starting to speak out, and that means we are no longer able to claim ignorance, and filter out the terrible things that have happened on the watch of good people in the past. Welcome to the world as it really is, and not the way the gatekeepers used to tell us it was. It's about time. [Future Crunch 30]]]>
Google Fiber stopped over-building fiber to the home (FTTH) to give fixed gigabit wireless a chance. This isn't even 5G. This is current non-millimeter tech.
AT&T is trying to get BPL (broadband over power lines) to work with Project AirGig. Will it work this time? The power infrastructure is still pretty old/antiquated, ut technology has gotten better.
API isn't talked about like that. Integrations are. UCaaS as a stand-alone platform is not that impactful to the employee work day. Integrated with CRM, email and other work day applications is. [All About API is at ITEXPO.]
Intelepeer just announced a platform that integrates with Cisco Spark. Hope they demo that at ITEXPO.
The IDEA Showcase is Thursday evening. I always get amped at startup events because there is great energy (hope, promise, excitement) that we kind of lack in telecom.
If you like startup stuff, the week of Feb. 13 is Startup Week! Techstars runs that globally.
Channel Vision Expo is collocated with ITEXPO again. This is the first channel partners event of the year. And it is collocated with MSP Expo. Should be interesting because more and more referrals and indirect sales are making a difference for cloud providers. 8x8 notes, "New monthly recurring revenue (MRR) sold to mid-market and enterprise customers and by channel sales teams accounted for 60% of total new MRR booked in the quarter."
I don't understand Blockchain. (There I said it!) Maybe I will get a chance to see what that is about on the show floor next week as well at the Blockchain Event.
WebRTC is still a thing, according to Andy Abramson. We'll see as Real Time Web Solutions has a section of the ITEXPO as well.
Most of the noise in my email is about HPBX/UCaaS, SD-WAN or IOT. The IOT Evolution is happening at the same time in Ft Lauderdale but it is a separate show. Verizon, Amazon, Gogo, Sprint, T-Mobile, Cisco (but no AT&T) are speaking and/or exhibiting.
That is a lot of tech to take in at one time, but it also in one place. Where can you get that much info/demo/prezo in one place?
Some interesting stats from 451 Research Group.
Overall IT Spending vs. Cloud Spending. Cloud spending remains strong, and the growth rate continues to outpace overall IT spending. A total of 44% of cloud users expect spending to increase over the next 90 days, while 4% expect a decrease. In comparison, 38% expect an increase in their overall IT spending vs. 11% expecting a decrease.
Cloud Adoption. SaaS (64%, up 1-pt) remains the most popular type of cloud computing in use, followed by Infrastructure as a Service (43%, up 4-pts) and On-Premises Private Cloud (34%, down 2-pts).
On-Premises Private Cloud Vendors. The most popular vendor for on-premises private cloud is VMware vCloud (65%), with Cisco (33%) and Microsoft Cloud OS (30%) a more distant second and third.
Key Attributes. The most important attributes for on-premises private cloud vendors are Platform Reliability (66%), followed by Value for Money/Cost (47%) and Technical Expertise (36%).
If you are in Ft Lauderdale next week, let's grab coffee! Or join us for dinner on 2/7 HERE.
]]>One big story was Google Fiber laying off and the CEO quitting. I tend to agree with Beranek on this: Google didn't want to be a network operator. They just wanted to scare the Duopoly into building out broadband networks, so that Google could get more page views a la YouTube.
People don't understand how much obstruction the Duopoly has in telecom. From lobbying to lawsuits, the phone and cable companies hate competition. They do everything they can NOT to compete. So given an upstart - Google Fiber or Covad or a muni network proposal - they go to town throwing up hurdles to success. Big is Bad for Consumers. Period.
The Election: Not getting political but it looks like Net Neutrality will be rolled back. Soon the 4 cellcos will make it look like 1996 again when it was Prodigy, AOL, CompuServe and DELPHI. Walled gardens are coming back. This will make it harder for any new entrants to get a foothold.
Devices: It was the year of device panic from Samsung's blowing up to Apple eliminating the earphone jack. Add in the mix, the hacking of the IOT devices used for DDoS attacks against Krebs and DYN. It was 100K hacked cameras and DVRs that took down the Internet in October. It is only going to get worse. For a society obsessed with guns, why don't we protect our information and devices? The Info War is going to set you back.
BTW, did you see that Quest Diagnostics was hacked? 34,000 accounts. Would you want your medical history online?
It was the year of hacks. Just ask the DNC.
Hacks and outages all year.
A lot of noise about Fake News (true), self-driving cars (almost) and SD-WAN (soon).
It was the Year of Uber. Of all the ride sharing apps including Lyft, Uber seemed to dominate. Close to 25 ride sharing apps have been funded to date, but it is Uber that leads the race, despite famous battles with cities around the globe.
VR got bigger (just as Scoble!) But like Augmented Reality, other than entertainment and early adopters I have no idea who is paying attention.
IOT was big. Everyone is still trying to figure it out. Or more precisely figure out how to monetize it for themselves.
Speaking of which, IAAS has blown up with one clear winner, AWS. At $13 Billion in revenue, it is all of the profit that Amazon shows. Rackspace, a rival, went private this year when a private equity firm acquired them for $4.3B. Like Dell, going private allows them time to pivot without the stock market beating them up. And speaking of Dell and pivots, what a year they had buying and selling. If the smoke ever settles in Austin, it will be an interesting story.
Artificial Intelligence is something I tend to think of as analytics and data mining. (We went from Big Data to AI.) From Siri to Alexa to IBM Watson, AI is entrenching in our world. A doctor friend uses Dragon Speak Medical Edition to transcribe his notes into the EHR system. That's the kind of tech we need.
Microsoft added its Skype real time translation service to cell phones and landline. In a global economy, this will be a game changer. And this is on top of Skype4B crashing past 50 million seats.
What else did we see a lot of? UC&C or UCaaS. So much of it. But when you have 2000+ companies plus thousands of resellers trying to gain some ground, the noise level will go up. Most of that noise is pure hype, spin and hullabaloo. More on that in another post.
Is there anything I missed? Is there something you are watching? Let me know.
]]>CS&L, the telecom real estate investment trust (REIT) spun out of Windstream last year, owns the copper and fiber assets that Windstream exclusively leases for its network. CS&L bought Tower Cloud and PEG Bandwidth to add to its fiber portfolio. CS&L lost $4.1 million during its 2016 third quarter on $200M in revenue of which 82% comes from WIND. CS&L will "acquire Network Management Holdings LTD, a private company that owns and operates 359 wireless communications towers in Mexico, Nicaragua and Colombia" for $65 million. Towers are like real estate for a REIT. Fiber is still an asset to rent in a REIT. Surprisedly, Level3 nor others have spun out fiber, data centers or other assets into a REIT as a tax savings entity.
As I wrote my column for Internet Telephony magazine last night, Tony Thomas must have read my mind. WIND CEO says that SD-WAN and UCaaS are the driving forces for the WIND-EarthLink merger -- and where success will come from for similar telecom providers.
Cellular companies have started counting all Internet connected devices as number of handsets slows down. In the latest quarter results (see here), it is all about the notes:
"Subscribers include retail and wholesale connections of both traditional and new connected device categories (e.g. M2M). Verizon Wireless subscribers include Strategy Analytics' estimates for wholesale and connected device volumes. Sprint subscribers and net adds exclude affiliate subscribers, but include wholesale."
The blended ARPU is diminished by M2M and IOT device revenue. And this will continue. Family plans, hotspot add-on, tablets at $10 per month - these are the tricks that will need to improve going forward for ARPU to not slide off. Or they will have to break out M2M and IOT which they can't do.
]]>AT&T with its DirecTV buy and its grab for TW is basically following Comcast's playbook. Comcast bought NBCU, is becoming an MVNO (cellular reseller) and has a $6B Comcast Business division that is going to chase enterprise (much to the dismay of CenturyLink and Windstream).
Verizon is busy selling off wireline assets and buying up as much spectrum as its AMEX card will allow in a heavy bet that 5G and IOT will solve all of their revenue and cable issues. In a move bizarre move, VZ bought up AOL and Yahoo as content plays. This playbook is solely Lowell C. McAdam's.
Frontier, Fairpoint, CenturyLink and Windstream are RLECs looking to get out from under a heavy debt burden without cellular assets and without a content play. Each has its own playbook.
Windstream buying EarthLink almost makes sense especially at a $1.1 Billion all stock deal. (This move doesn't hurt the channel since both providers were pro-channel.)
CenturyLink buying Level3 is not only surprising; it is disheartening. Level3 has its problems certainly. Yet its management understood the business it was in and what it took to win business. For a partner, that is a plus.
To fuel that $34B deal (total value of stock, debt, etc), CenturyLink is selling its data center business (Qwest and Savvis) for $2.1B to a coalition of PE firms headed by the former CEO of Terremark. This coalition is also buying 4 cyber-security firms to build a global cyber security business. Partners are curious if they will still get paid on deals already sold. And what the future holds here.
FPL getting acquired by Crown Castle also makes partners worry about commissions, since CC doesn't have a channel and doesn't retail its fiber.
The CLEC industry is practically gone now. After nearly one trillion in investment money dating back to 1996 or so, most of the CLECs we have come to know and sell are pretty much gone.
What does that leave the Channel? IOT, Cloud, UCaaS, SD-WAN, security - basically selling managed services. Network is going to be tough to sell and make a living on as prices continue to erode. SD-WAN for the win!!!
Network is easy to sell and there is demand for it. You really can't say that for any other product in the portfolio.
Data center is still alive and well. Long live colocation!
]]>I wonder back to when AT&T tried to buy T-Mobile in 2011. That Obama Admin said NO. Despite the fact that AT&T was actively helping the NSA and other 3-letter agencies since before 2006, when Klein exposed Room 641A.
Then there is the other program that AT&T runs for the feds: "Hemisphere was used far beyond the war on drugs to include everything from investigations of homicide to Medicaid fraud." The Daily Beast explains how AT&T is spying on Americans for profit. (It would be weirder if they were just doing it for fun.)
Barry Eisler spells out how all this works via his "fictional" book God's Eye View.
AT&T has hedged its bets since the T-Monile No. It won approval for DirecTV. It plans to get a Yes from the DOJ - and has told the FCC that they don't have a say in this acquisition.
From NEXTDRAFT by Dave Pell: "Will the AT&T acquisition of TimeWarner get federal approval? Before you place your bet, consider this data provided by the NYT: "AT&T is the biggest donor to federal lawmakers and their causes among cable and cellular telecommunications companies, with its employees and political action committee sending money to 374 of the House's 435 members and 85 of the Senate's 100 members this election cycle."
Why are they buying TW? Well, to catch up to VZ and Comcast. And because all the pies are flat. AT&T had a bad quarter. VZ has a had a couple. They are laden with debt. Cellular which is half the revenue or more is being picked apart by T-Mobile and to a much smaller extent Sprint. Cable is eating the wireline broadband lunch*. Since all of the bets were on cellular, it is now a run to use fixed wireless (LTE or licensed) for broadband deployment which will increase ARPU for them -- and the bills to consumers.
Ma and Pa Bell have spent tens of billions on spectrum. They will use it to get out of terrestrial broadband and have everything be wireless. They will still have to figure out the T-Mobile problem as well as the cable wi-fi problem.
They want content to build a walled garden - like Facebook or AOL before them. When you own the content you can be king, just ask Comcast/NBCU or Disney.
The one thing that will kill off the telco is an economic depression. When the US experiences another economic slowdown - like say 3Q2017 - consumers will have a lot less money to spend. That means ARPU will not go - and subscriber counts will go down. When you have to eat, you skip HBO and cable TV.
The auto industry is already feeling this crunch. More leasing, less sales, more discounts, interest free loans. The cars last longer. And driverless cars are coming.
One reason for immigration is to actually increase the population of the US. Millennials aren't having kids - in many cases because student loan debt and poor salaries make a child too expensive, except by accident.
In the midst of this noise 2 things to note: (1) ABRY is selling Masergy to Berkshire Partners for about $1 Billion dollars. The reports say $900M; I was told it is more than that.
(2) Google Fiber is laying off. The CEO of Google Access, Craig Barratt, is also stepping down. Too few subscribers, too many hassles means they will try fixed wireless then probably call it a day. The Duopoly of cable and telco have successfully squashed competition. And for all the little guys cheering, it could be you next!
Please note that in the middle of all this, despite the skyrocketing analyst forecasts, cloud computing is not mentioned in this scenario. Why? It amounts to peanuts in revenue for the Duopoly. "Total SaaS/PaaS revenues of top 50 software companies globally are $22.4B. Microsoft, Oracle, IBM, SAP, Symantec, EMC, VMWare, HP, Salesforce and Intuit are the top ten software companies worldwide," according to Fortune and PWC. Unless they were to buy Salesforce to gain $5.5Billion in revenue, they have to go content. Microsoft bought LinkedIN for $26B!! And LI revenue isn't even $4B dollars.
IOT isn't even a billion dollars in revenue for VZW yet. So how do you move the revenue needle at the former Bells?
* Per telecompetitor, "The number of U.S. fixed broadband subscribers dropped by nearly 200,000 on a net basis in 2Q 2016, a decline of 0.2 percent, according to the latest market data from Point Topic."
]]>It wasn't UCaaS after UCaaS after UCaaS. It was broken up. UCaaS/VoIP is still big - and there are still too many vendors for not enough sales - but it didn't seem like every booth. At the CSNG event, it was wall to wall VoIP. It looked like the starting line for the Great Race, with teams in their matching colored shirts from almost every VoIP provider - DSCI, Panterra, Jive, Fusion, Momentum, Net2Phone, Nextiva, Vonage, Star2Star and a few others.
TelePacific is closer to finishing its merger with DSCI, which will be good for all partners as this CLEC pops out onto the national scene as a Managed Services Carrier. TelePacific will have a new line of managed services launched soon in conjunction with DSCI. SD-WAN will just be one of the new services that partners can sell nationally.
SD-WAN is making a ripple. Verizon brought the full team to its hot dog and beer session on SD-WAN. Very competent people explaining the different ways that VZ can deploy managed SD-WAN either from Cisco or from Viptela.
Ecessa is excited about the opportunities that the channel is bringing them. Both Ecessa and Aryaka told me that right now it is about education - both to the customer and to the partner - about what SD-WAN is and what it can do for the networks and productivity of the customer.
Polycom wasn't prominent at the show, but neither was Yealink. A few UCaaS providers told me that more and more UCaaS seats are beings old without phones. Jabra and Plantronics are picking up business. (I wonder if ScanSource distributes those lines of headsets?)
Level3 is still going through integration issues according to two different partners.To be expected I would imagine as they try to merge networks with TWTC and add SDN.
Quite a few carriers spent more than a little time explaining that they WERE indeed embracing the channel.
IOT was talked about, but I still don't get how channel partners will make money at it. Verizon went from $455M last year to $800M this year in IOT revenues, which is a blip in their coffers.
A lot of talk about the ScanSource/Intelisys deal. The X4/Sandler merger didn't even get to spend a week on anyone's mind. Everyone is wondering if this will be a trend. There has to be at least two deals in the pipeline right now. We'll see.
Not much else to say. Safe travels.
]]>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.
]]>Sendhub,a business SMS provider that raised $10M, was acquired by Cameo Global, a global managed IT shop that does some contact center work.
Salesforce's leadership position in CRM now gets e-commerce with Demandware $2.8B acquisition
Broadsoft acquired Intellinote. [see here]
QTS buys DuPont Fabros Tech's New Jersey data center. This transaction comes after QTS transformed the Sun Times building in Chicago into a Tier 3 data center with 317K SF of capacity and 24MW of power.
Nest has unlimited budget, large workforce, and nothing. Oops!
The strike is over for Verizon and the lesson for the C-Suite: we can't get rid of wireline and unions fast enough.
ADTRAN launched hardware-as-a-service, a subscription service for MSPs to offer hardware to clients without leasing -- or another way to say that the leasing is built into a subscription service.
The Allied Fiber assets in the Southeast are up for auction under bankruptcy court approval. [source]
Rest assured, another prediction says the same thing that the other predictions said: VoIP Market Set for Steady Growth.
Want an example of Innovation? Zappos re-designs the shoe box!
CNBC list of Top 50 Disruptors
Mid-year channel trends HERE (site is hard to read with banners, pops, etc., but aren't they all getting that way?!)
Dean Bubley asks, "So uncomfortable Q for 5G designers & stds bodies: can critical-comms 5G really yield enough rev/profit to justify much expenditure/effort?" Follow up with this piece on 5G Vision. In short, is there enough revenue to build out yet another network (voice, 2G, 2.5G, 3G, 4G)?
Now softswitch vendors are service providers, competing with their customers and making it easier for new entrants into the already bloody ocean of Hosted VoIP. Broadsoft BroadCloud; GenBand Nuvia; Alianza Cloud Voice Platform; and Metaswitch MetaSphere Cloud Services [see here and here]
RETAIL: Sears, J C Penney - 30 Companies That Might Disappear In 2017 Based On Altman Z ]]>
Broadsoft has bought another company. No more internal innovation (still no Slack or Skype integration either!), just inorganic moves - Transera, Lenoid and PBXL. This time BSFT buys "Intellinote, an enterprise messaging-based team communication and collaboration software application built for the increasingly mobile and millennial workforce," says the press release. I am guessing this is their answer to Slack.
Or to put int another way: All your mobility and collab in one place idea. It might work, but playing catch up to Slack (like Microsoft is doing by re-vamping Sharepoint) is so telecom! Me-too! Me-too! Me-too! No one innovates.
"According to the latest market report published by Persistence Market Research, the global VoIP services market was valued at US$ 85.9 Bn in 2015 and is anticipated to increase at a CAGR of 9.5% over 2016 - 2024, to reach US$ 194.5 Bn by 2024," per the press release.
Maybe the inorganic growth will spur organic growth. Maybe at some point VoIP growth will actually catch up to predictions, but if you take out SIP Trunking, does it?
Adoption is the key. User experience. Productivity. We'll see.
Meanwhile, hardware PBXs are still be installed.
8x8 is working on world domination plans, which is great except they haven't really taken a bite out of the Apple (NYC) let alone most of America yet. At 600K devices, there are 25 million businesses in the US. With even 80K billing businesses, that isn't even cracking 1%. Take into account 325K from RC and another 80K from VB is about 2% of the addressable SMB market space. Yeah, I guess you should go global.
Adoption is a far cry from what was predicted. The smart home space is seeing the same issue.
"Despite the hype growing around smart homes - from fridges that can tell you what items you've run out of, to controlling your lights from a smartphone - the majority of people don't have much interest in the new technology, new research reveals." [source]
Consolidation and Adoption are just two issues to overcome.
Carbonite buys Seagate EVault cloud backup, DR for $14M, which is a deal, but even this little bit of consolidation does add up to much of the market - against Google Drive, MS Onedrive, Apple iCloud, Amazon S3, Dropbox and Box. Ransonware esurance is what this sector needs. Or some other way to tell the story of lost files, photos, etc.
While talking about needing a better story, here are 2 Slack commercials (one-zoo and two-spaceship) that are off-beat to say the least.
]]>Did you see that Apple had a revenue problem? Not as many iPhones are selling. "Benedict Evans (@benedictevans) says the mobile wave, which is split between mobile phones (voice/SMS) and smartphones, is coming to an end, and the next obvious market for growth is cars." Ben's blog is here and the slide deck is here.
The Autonomous car has big investment from everyone from GM to Apple to Google to Tesla to hundreds of other companies. It is where we are heading. (It is just another robot!)
Robotics. Global investment in robotics doubled from 2014 to 2015 to almost $600M, according to Financial Times. Robotics is going to replace a ton of workers.
Life Science (or biotech) is still healthy. From cancer treatments to testing, investment in this sector is still good, largely because R&D spending at Big Pharma has shrunk in total dollars due to consolidation. Also, Big Pharma drug pipelines are lean; they tend to buy new drugs, treatments and tests these days.
The ancillary to this is the IoT Healthcare sector which saw a rise of 20% in 2015 investment, according to CB Insights. One problem being faced is clinical efficiency, which is tracking treatments to boost the effectiveness of healthcare providers as well as to improve the delivery of healthcare in hospitals and clinics via connected devices/objects. That takes us into wearables, ingestables, brain sensors, home monitoring and more. A lot of cool stuff in this space, especially happening here in Tampa Bay.
In Colorado and California, cannabis startups are the rage. Legal marijuana sales are tracking at 3x Coke's bottle water sales.
Education technology is also seeing investment, but our education system sucks, so I am ignoring it for now.
CHATBOTS, PERSONAL ASSISTANT and Other forms of AI
Matt Swanson, Paula Bernier and others think that "chatbots will cause a near-term disruption in how businesses interact with consumers, and a long-term paradigm shift in how people interact with machines." See Matt's article on VB.
Paula writes about Facebook, chatbots and customer service here. Thomas Howe wrote, "As alternatives to websites and to mobile apps, Chat bots, digital assistants and intelligent agents are the quick and efficient way to connect your employees and customers to your business." Companies like BizTexter and KISST are already shipping services (and they did it before Facebook!)
Financial Technology is looking good. When there is a best of list of conferences for a sector, you know there is money there. The Fintech startup scene, according to CB Insights, has been healthy for a while. Pretty much the way Craigslist sucked a lot of revenue out of newspapers, banking startups will suck some profitable lines of business from Wells Fargo and other large banks. Hopefully.
BTW, Payments startups saw a shift in the last two quarters. Digital wallets like Apple Pay are here. Investments will slow as winners start to emerge (like in the ride sharing space).
SIDE NOTE:
Latency Arbitrage is why latency matters to anyone in financial. Listen to why. ]]>