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.
]]>"The U.S. (and the world) is in the midst of a sea change in how we spend our leisure time. Young people are less inclined to indulge in America's favorite pastime: zoning out in front of the TV. On average, people ages 18 to 24 spend half as much time watching live and recorded television as 35-to-49-year-old Americans, according to Nielsen...... Young people are definitely watching video, but it's more likely something from YouTube or a friend's Snapchat story on their phone than the episode of "Grey's Anatomy" their parents are watching on the living room TV."
"All told, traditional cable, satellite and telco pay-TV services (not counting OTT offerings) lost a net of about 1.64 million video subscribers last year as compared to a loss of some 980,000 in 2015." [telecomp]
Telco TV was too late to the party. It cost the telcos billions of CAPEX dollars to find out that cord cutting was real and OTT video - Netflix, Hulu, YouTube, Amazon Prime, Sling TV -was going to be the winner.
The economics look upside down. Bear with me here. Right now the cable operators are winning the war for both broadband and voice. In many areas, cable is now the incumbent voice provider.
With triple-play the operator sees ARPU of about $161. If the customer only buys broadband - which is happening more and more - the ARPU drops to $65. Never mind the tax implications for federal, state ad local government (they are screwed either way), just consider what this does for revenue numbers.
The ripple effects are already being seen. ESPN, the Disney owned sports channel, is in a tail spin with a loss of about $500M in revenue per year from cord cutters. Cable channels are either being closed by the content owners or re-named and re-tooled. There aren't 500 useless channels; there are 1M with all of the streams and social media. This will be a real problem for content creators, actors, writers and advertisers.
Windstream, CenturyLink and other RLECs (Frontier, Fairpoint, TDS, et al) have been working hard to get the percentage of revenue from residential/consumers from the average of 75% to a 50/50 mix with business services. Windstream bought EarthLink; CenturyLink bought Level3. TDS bought managed IT firms and data centers. Fairpoint sold itself to Consolidated Comms. Frontier keeps buying states from Verizon and AT&T; consequently, their mix is still heavily consumer.
Everyone has a revenue problem. Pricing pressure has squeezed every operator. It will get worse. Millennials don't want to pay a cable company. They have a huge cellular bill and student loans totaling $1 Trillion. Couple that with stagnant wages and a bleak jobs future that is getting darker with all the investment in robotics and AI, the economic outlook doesn't look bright. As I have asked before: if wages are stagnant, how does someone continue to keep the economy spinning with buying?
I hope, unlike cord cutting, that operators don't have their head in the sand on this issue.
With 5G trials rolling out, will the next generation - who aren't buying homes and aren't buying cars - buy wireline broadband? A few analysts say Unlikely. I already know several twenty-somethings and thirty-somethings that do NOT have terrestrial / wireline broadband. It is all smartphone and hotspot at home.
What does that do to the economics of the network? Business revenue will become even more important. And as revenues decrease, price increases will result, which will mean less subscribers.
Planet Networks believes that rural and under-served areas will still be on wireline because 4G and 5G will not get there any time soon. That may be true - so RLECs will be happy - but the majority (80%) of the population lives in urban areas.
In other nations, cellular (including fixed cellular) are sometimes the only available network. It is cheaper to put up towers and radios than to dig up streets and sidewalks to lay fiber.
]]>After 15 years, 2000+ providers can only take a 28% handhold in the market?
The growth rate of Hosted PBX (HPBX/UC/UCaaS) has always been a hopeful bad guess. And it will continue to do so because too many people, companies and dollars have been invested thus far for any analyst to turn on the sector.
There are 4 major problems with the UC Market.
One, PBX sales have declined about 3% per year. Even Avaya going bankrupt isn't going to speed that up. Not only do people trust boxes; they are cheaper in the long run. Single location businesses, which is most of them, don't have a PBX problem that UC solves. There is a current Product/Market MisMatch that needs to be examined.
Mobile UC may get more traction. Or a simple PBX like Dialpad or Fone.do. Gary Kim writes that the market may be too small. At ARPU of $400, it takes a bunch of sales to move a needle for a company like CenturyLink, Verizon, AT&T, Comcast or Charter.
Two, I wrote this last week. Any 15 year old product needs a re-fresh or re-think. We are overdue for a Re-Think. Slack was a re-think, but that strays to the edges of what UC is. So does Cloud Contact Center. And these companies want to be everything for 1-1000 employees. This isn't Pasta or Rice. This is technology.
UC is Change. People hate change. The Channel doesn't sell Change; we take orders on replacement services. Harsh but mainly true. There are exceptions of course, but the general rule is that agents are transactional. Even Inter-Connects aren't excited to go sell a cloud service. MSPs will if it is white-label and can be bundled into their package, but that falls into POTS Replacement more than a full-blown UC deployment.
Three, HPBX has 2 camps of buyers: POTS replacement sold as cheap as possible and actual UCaaS. Where do you think most of the market is? Right, cheap VoIP.
Now if I am buying cheap VoIP, am I also going to pay for a backup circuit or SD-WAN or any other service enhancement or assurance? Unlikely -- or I wouldn't be buying cheap cable broadband and the cheapest OTT voice!!!
If the buyer spends more on bandwidth, has a backup circuit, they are likely going to buy UC as BC/DR and that isn't cheap VoIP.
The fourth Big Problem: There are far too many providers! Telarus represents at least 37 HPBX vendors. Other masters have at least 25. How does anyone differentiate/ stand out/ position in a marketplace where the cloud broker has a choice of 2000+ providers?
This becomes a problem for the providers who enter into a Price War (seats cratering to below $15 each) and a SPIFF War, where providers are literally buying sales.
One of the most successful HPBX providers, 8x8, is up for sale. This move comes after a recent re-branding as a Global UCaaS provider.
Are the owners (the 8x8 founders still own most of the voting stock) looking to exit? Or is it that the machine to keep bringing in 20% growth quarter after quarter is grinding down? I just don't know who would pay $1.5 Billion for 8x8. VZ payed $1.8 for XO which owned fiber assets. WIND payed $1.1B in an all stock deal for EarthLink, who also had a bunch of fiber. Fiber gets a bigger multiple than VoIP.
The other thought is that what if $300M is about all the B2B annual revenue you can get?
From a recent discussion about Amazon Chime: there are approximately 100 million phone/conferencing lines in North America. If Amazon Chime with Vonage can hit a 5% share of this market, that equates to 5 million subs. At $5/seat/month, that is $300M incremental revenue opportunity for Vonage. That would be a needle mover for most UC Provider, considering 8x8 is at $225M in annual revenue now.
The emphasis has always been on multi-location and mid-market. That's why "41% of larger enterprises are using cloud UC services." Now everyone is focused there (upmarket). However, the bulk of the businesses are single location small business (20 million of them). That means a new product bundle is needed to attract this crowd. Many thing that this sector will be mobile only with an auto-attendant in the cloud.
When you look at the large number of messaging apps, at some point, one of them - Slack, Messenger, WeChat, HipChat - will hit the right bundle of functions to steal mass appeal. Not yet, but maybe soon.
]]>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.
]]>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.
]]>Yet, this headline: "75% of internet use will be mobile in 2017 according to forecast" is kind of misleading. "Zenith Media has released a forecast which says that mobile devices will account for 75% of global internet traffic in 2017." Globally that would appear to be on point since much of the world is mobile only. Laptop and desktops aren't booming. I wonder if tablets are considered mobile or only if they are on a 4G plan.
Mobile internet use passes desktop for the first time, study finds. "The combined traffic from mobile and tablet devices tipped the balance at 51.2 percent, vs. 48.7 percent for desktop access, marking the first time this has happened since StatCounter began tracking stats for [global] Internet usage."
Keep in mind that Mobile vs Desktop has unique User Behaviors. Maybe 55/45 is as far as we go.
"For someone in telecom, the surface-level answer seems obvious. Millennials grew up in the age of cell phones and the Internet. They expect constant connection, mobility, and innovation. This explains why millennials are shaking up personal mobility and communications. But how is it that they're having such an impact on business communications and collaboration too?" from this report.
To continue, "Millennials are becoming the majority in the workforce. They're already the largest generation in the U.S. workforce and should be more than half of the global workforce by 2020. Millennials are becoming managers and leaders. Their preferences and early-adopter tendencies are shifting the conversation about tech in the workplace."
This might be why so much emphasis is on 5G and mobility, but let's not forget that the 2 RBOCs get about half their revenue from mobile, so they will hype up the biggest half of their business.
I don't know how 5G will trump fiber to the home, especially for Boomers and older. Reading tablets and phones with old eyes is a challenge, believe me.
As we have recently witnessed with IOT and hacked phones, security will be an issue. A big issue. No idea how we handle that going forward since people still use password for password (and 1234 for PINs).
If 5G is sold in buckets of data, how does that compete against cable wi-fi or an almost unlimited fiber pipe? "Wi-Fi Expected to Carry up to 60% of Mobile Data by 2019". Is that still mobile only?
Fiber has had set-backs, especially with Google Fiber, but it is also on the rise. More than 600 independent telcos have FTTH projects in the works. Getting pole access via telco, power and government entities is a maze of red tape. Yet cell towers are facing bigger hurdles as no one wants one in their neighborhood. Companies like Crown Castle and Zayo are building out small cells along their dark fiber routes to help 4G fill-in. No idea how dense it will need to be for 5G -- or the lasting effects of that many radios and wi-fi routers per block.
What about the economic effects of fiber? "The evidence is mounting: investment in fiber improves the economic performance of a community as well as its quality of life," said FTTH Council President and CEO Heather Burnett Gold. Would fixed 5G present the same economics?
We will see a certain amount of the market go wireless only. "The latest data from the Centers for Disease Control paints the picture of a growing mobile first society in the U.S., with nearly half (45.4%) of U.S. households wireless only," from the CDC's National Health Interview Survey (NHIS).
5G will change things for a few companies. Point to Point licensed wireless has made a few CLECs happy (and profitable). But it isn't for everyone or for every where.
]]>We have seen consolidation in the contact center space - ININ-Genesys and others. It isn't over yet. There are too many players in the marketplace, and for right this moment money is still cheap. Better to buy your competition than try to beat them.
More predictions: "Global unified communication and collaboration market expected to grow at a CAGR of 12.3% from 2016-2020," says a report by Technavio.
So 8x8 and Vonage are at 600K seats each. 8x8 has 45,000 Customers according to June 2016 investor prezo with ARPU at $399 now.
Windstream and BroadSoft team up to bring customized Virtual PBX to hospitality market. WIND is a confusing deal. They own Allworx which they never discuss. They push MITEL and Avaya - and they have a Broadsoft. That is a lot of platforms to know, sell, manage, support.
Comcast Business Services revenue increased 17.0% to $1.4Bn with small business accounting for ~75% of revenue and ~60% of growth. Voice makes up 7% of Biz Services Rev..
Megapath launched the latest Broadsoft offering called MegaPath One with the usual collection of bells and whistles. MegaPath also rolled out Skype for Biz integration.
ITSPs are so worried about Microsoft eating their lunch that they integrate with it or add some Microsoft to their offering, like MegaPath and Velis4. Even TelePacific is joining the Microsoft CSP program. WIth the DSCI deal approved at the federal level, there should be more news out of TelePacific.
RingCentral doesn't break any stats out anymore as they just play with GAAP and performa stylized finance sheets. "In 2015, nearly 30% of RNG Office new bookings coming from up-market customers with at least 50 users, up from about 20% in the year ago period." Now they are bringing in customers with 100+ seats. All the UCaaS players are going upmarket, where the ARPU is higher, to cover the cost of sales and support.
RingCentral (RC) did make one big change: previously RC distributed phones to customers by reselling third-party phones; maintaining inventory, handling A/R and warranty processing, etc. Now they made a deal with Westcon to distribute phones to RC customers with RC acting as an Agent of Westcon and getting a referral payment per order. Westcon will now maintain inventory, handle A/R and warranty processing.
Jabra Survey Finds Small/Medium Businesses Driving Productivity through Unified Communications. "Between a third and two-thirds of all small/medium businesses (SME) will either add unified communications (UC) or replace existing systems with UC within the two years, according to a recent survey by Jabra."
Cisco Spark, Microsoft Skype4B and other services are putting pressure on the OTT VoIP players. "RingCentral and friends are now facing challenges from Microsoft and many other titan-sized technology experts. The proof is in the pudding, and these VoIP experts must continue to show that they can deliver healthy business results in head-to-head competition with true giants," states this article. Because all the noise right now is about Skype (and Slack started doing TV commercials), the market is wondering if stand-alone VoIP can continue to afford to buy market share. VoIP players are giving free phones, SPIFFs, free months of service, just to get a customer. The cost of that acquisition is being questioned on the stock market. OR it may all be a fluke and stock speculation going awry.
There were a large number of service providers in the space of UC&C - from Fuze, RC, the Cloud Comm Alliance members to the LECs to the other numerous ITSPs. Then softswitch vendors decided to become service providers, too. Broadsoft BroadCloud; GenBand Nuvia; Alianza Cloud Voice Platform; and Metaswitch MetaSphere Cloud Services are all competing with their customers and making it easier for new entrants into the already bloody ocean of Hosted VoIP. (Now even enterprises can be an ITSP).
Everyone is pushing up-market, but Cisco recently did a study on small businesses. The study found "on the IT front, a majority of small companies (86 percent) are considering the use of cloud-based unified communications (UC) systems as a possible solution to their communications needs, replacing their more traditional premises-based counterparts."
"Yet unified communications as a packaged service, despite its relative maturity, remains far less than universally adopted, particularly outside of larger enterprise accounts. A recent survey of more than 400 enterprise and SMB IT decision-makers, performed by UBM Tech for XO Communications, found that only one-third of organizations had fully embraced UC. On the other side of the spectrum, a separate survey performed by Osterman Research for ConnectSolutions found that about as many IT decision-makers (26 percent) and business deci-sion makers (39 percent) are either "somewhat" or "very fearful" of migrating to UC. Nearly half of those surveyed admitted that they don't fully understand the full impact UC would have on their organizations. These fears and trepidations come despite the fact that 71 percent of those surveyed by Osterman believe there are "significant" or even "enormous" benefits that can be realized from the deployment of UC." [from ChannelVision magazine].
Mobile UC is going to be another segment of the UCaaS pie. Mast Mobile, Apple, Google and now Verizon's One Talk. You know that Sprint could have driven this years ago when it first announced integration into the Broadsoft switch for 4-digit dialing to cellphones. But Sprint just couldn't get out of their own way. It would take months to deal with them for quotes, sales sheets, etc. It would be scary to think how long deployment would take. But now VZW is doing it - all in-house - with their Broadsoft.
]]>VOSS Solutions has been a Cisco shop for many years. Now they are launching VOSS-4-UC, a management platform for the hybrid Cisco and Microsoft environment, which I would imagine is how many Fortune 5000 companies operate. VOSS also hired a Skype for Biz Chief, in a nod to the growth of Office365+Skype4B.
Meanwhile another Cisco shop launched a UCaaS service for small business. Verizon One Talk is a BroadSoft based, mobile first offering for small business. As Verizon wrote me, "It is selling well out of the gate because it is simple, easy to buy, only the key features, and the sales channel that incented to sell it at scale." At this time, I don't know the difference between One Talk and VCE, the other BroadSoft offering that VZ sells, but I will look into it.
Meanwhile, Gary Kim has a good write-up on One Talk; so does Telecompetitor. The VZ commercial is a little over the top but it gets the point across. The key is that small businesses that One Talk targets are going all mobile anyway. This offers them some PBX functionality on top of that -- to look "bigger". See the video here.
Intelepeer added some channel help and re-organized to support their Cloud Advantage Partner Program. Intelepeer is a SIP provider with close ties t o Cisco platforms including Spark. They partnered with Chinook on a hosted Lync/SIP bundle. More and more providers have to embrace both Cisco and Microsoft, who hold 55% of the UC market.
"According to the survey, 26% of IT decision makers and 39% of business decision makers are either "somewhat" or "very" fearful about migrating to UC with nearly half (48%) of those surveyed admitting that they don't fully understand the full impact UC would have on their organizations."
Verizon kind of tackled this, right? By getting simple AND by targeting a segment of the marketplace (not the WHOLE marketplace of 1-1000), their UCaaS offering will sell. Skinny bundles will help or highly targeted packages make it easier to message to the prospect.
On the enterprise front, it will be a hybrid world going forward. We see more providers embracing Office365 (especially when so many ran from it at launch). Others have come to realize that it will be a Cisco+Microsoft world, so adjust to it.
]]>If you can't see the flash based player above you have two options: listen on Soundcloud or download the mp3.
]]>If you read this blog last month, then you know first up will be SD-WAN. This technology is going to change things for carriers and customers. This tech will allow customers to have monitoring, analytics, failover and a view into their WAN. It won't matter what pipe - 4G, 5G, fixed wireless, copper, fiber, cable modem - the customer will have a layer of monitoring and transparency that wasn't available before.
SD-WAN is going to allow even small offices to have disaster recovery with a choice of broadband - DSL, cable or 4G. Packet shaping, load balancing and more.
We looked at TelePacific, Velocloud, Escessa and Aryaka last month. EarthLink rolled it out (Mettel did too) with talk about one box (one appliance on the customer premise) will be the router, firewall, switch, et al. Simplifying the borders with SD-WAN. It all goes back to the SDN control panel at the carrier. If it all rolls out as planned, this will be the next Integrated T1 for CLECs.
Monitoring circuits is in. A couple of master agencies have bought in. AireSpring offers AireNMS (monitoring) for its circuits. SD-WAN will provide that built-in.
CenturyLink launched something that looks like SD-WAN (and they talk about an orchestration layer which is SDN talk). They launched "Runner, a configuration management and orchestration service that works across hybrid-IT architectures and diverse cloud environments." [CPonline]
SMS will come up often - in Push-to-talk technology as well as on landlines. This will extend the usefulness of copper for the ILECs. SMS will also be a part of the contact center platform. Companies will want customer service reps to be able to handle SMS/text as well as social media communications. We just saw this with MITEL's features PR. Vonage buying Nexmo (and twilio set to IPO) suggest that SMS via API is growing.
Take text and add AI (artificial intelligence) for businesses to automate answering frequently asked questions, like hours, directions, parking, daily specials, events, etc. There are a few companies in this including Thomas Howe's KISST and a former ITEXPO exhibitor, Biztexter.
Not many folks jumped on the MDM (mobile device management_ wagon. Well, after MDM leader, AirWatch, was acquired by VMware some were skeptical. In 2014, there were signs that it would change desktop management for laptops and iPads (see here). Next a consulting firm, CapGemini, looked at what they had to help them design this product called Workspace One . It takes the BYOD mess and adds some security and organization to it by delivering and managing any app on any device via enterprise mobility management. Think about the way you can sign-in across Android devices to see the same apps. Kind of like that mixed with desktop-as-a-service type thinking. CapGemini white labels it (see pdf). I wonder who else will?
Congress just got hit with Ransonware. Cyber-security and data backup will become critical for businesses. XO took a step towards this with its XO Site Securitythat integrates firewall and threat intelligence technology from Fortinet and managed security services from BAE Systems. (No idea why XO is NOW rolling out new products. They will be Verizon this time next year!)
BitTitan knows that Microsoft will own a good chunk of the business market with Azure, Skype for Business, Office365 and more (There are a number of Platinum and Gold Microsoft partners beefing up their Office365 practice now.). They added an Upsell engine! Plus are rolling out OneDrive for Off365. Microsoft just announced that they will revamp Sharepoint to compete with Slack and Dropbox.
SLACK. (That is all.)
]]>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. ]]>Slack has video and voice. Snapchat does too. WhatsApp - also owned by Facebook - does too. Office365 does. Apple has Facetime. There isn't anywhere that you can go to get away from voice or video calls.
This means more avenues for ads, robocalls, annoyance and loss of productivity. All of this was supposed to make it easier. (I hope it all comes with a DND (do not disturb) button that is easily found.)
A bunch of UCaaS players are rushing to catch up to Slack by adding threaded group messages, containers and the like to UC&C Presence and IM apps. Here's the problem: I have too many ways for people to contact me!
If I thought I was tethered before (because of a smartphone), now it is far worse.
And the inbox is now inboxes!!! Not just Outlook and Gmail, but Messenger, Slack, twitter, SMS/text. Where did that address or request go? What inbox is carrying that thread?
I not only have too many interruption points, I have too many inboxes. This stuff isn't getting simpler. It is getting more complicated.
Can you imagine discovery during a trial? I need his snapchat, facebook, twitter, gmail, outlook, messenger, office365, skype history, inbox and calls. How long would it take to gather all of that?
Gary Kim writes that telecom is a commodity like sugar. The Next Gen Network isn't a carrier network; it is the Internet. Everything rides over that now. Not the best solution for a reliable, secure network.
With Hosted PBX revenue at around $9 Billion globally (via Gary Kim), then it isn't growing but contracting.
Free P2P voice is taking over where cell phone minutes had ruined the landline business. Texts, email, chat and social media are replacing voice calls. [Even in dating, a form of sales, there is no way to call anyone through a dating app despite technology that could provide for it.
Chat is replacing text. Minutes are declining. Where will the revenue come from?
As they spend CAPEX to build fiber to the premise and to the tower, dropping $40K on a fiber build is not uncommon, how do they get the revenue back? The ROI is long. The ARPU is flat. The only thing changing are the fees. They keep adding more and increasing them. The fee should just be called Margin or Profit.
No idea where this is going, but it isn't getting simpler. The way to interrupt someone is too pervasive. When employees are already working longer hours, distraction avenues have increased. Would be nice if it got simpler.
]]>The ecosystem is the environment around software like Apple, Amazon, Google or Microsoft. It stretches pretty far and runs up and down the stack. It isn't just horizontal; it is vertical too. It makes the company pervasive in your life.
The brand of the iPhone became a status symbol, ease of use, security, luxury, and becoming part of the clique - the Apple/Mac/iOS clique. (I am often told I don't get it because I am an Android/PC guy).
The iPhone, and then the Samsung line of phones, is now the promise of a digital leash. Anyone can contact you, any number of ways at any time - voice (rarely); text; messaging on Kik, FB, whatsApp (encrypted); Snapped at; tweeted at; DM'ed; and on and on.
Due to ubiquitous cellular networks and not quite ubiquitous wi-fi, we can look anything up; research and buy; and even pay with this little device. This little device that people would not give up despite the growing expense - monetary, health, privacy.
Now ... that same consumer is being asked to buy a desk phone to go along with your state of the art unified communications platform. How silly is that?
They have a phablet in their pocket that has more computing power and more applications that the IBM 3033 mainframe I used in college at RPI by a thousand-fold. Yet you want them to still use a desk phone like it was 1999? The whole idea behind cloud is flexibility, mobility, scale and productivity.
The beauty behind the iOS app is that it looks similar across devices - laptop, tablet, phone.
Users are not adopting UCaaS deep enough or broadly enough to be sticky. Partly because UCaaS means that they have to Change (and people hate change). Party they haven't been trained. Partly the story they have been told sounds awful.
Along comes UC-One revision 21 on Broadsoft, now there is a softphone and mobile client that is similar across devices. Now you ease of use, elegant design, a Slack-like interface and functionality across devices. It has presence, chat, video and voice calling, click to call, drag to conference, integration with Office365, universal address book - all in the app.
There is no need for a desk phone. This will run on your PC, laptop, tablet and phone. Up and running as soon as we port the number.
As slick as it is, only DSCI, soon to be a TelePacific company, is running revision 21 in the USA. This isn't BroadCloud; this runs on DSCI gear.
It has been awhile since I have seen UC-One. It looks like this could help make the desk phone obsolete.
The funny thing is that there is a PR firm emailing me press releases about new handset manufacturers entering the market (Yeastar being one of them). Polycom has likely peaked on the number of handsets that they will sell (or has one year left to peak), since Yeastar, Yealink, Grandstream, OBihai, snom and others are aiming to pick away at the desk phone and location phone market. Jabra is attacking at the speakerphone sector. The DECT and cordless phone sector needs help; it is limping along on dialysis because it needs an infusion of models that work with longer battery life.
For companies with employees who are mobile, virtual, in sales or knowledge workers, which is about 25% of them, a desk phone is a waste of money. Here in lies the softphone problem. ITSPs spend far too much time on the phone debate - how much, lease/buy, RMA. Why?
Probably for the 75% who still want a handset.
Mast Mobile combined an MVNO with a UC company. Cool idea, but the story and go-to-market are lagging. There is also the matter of most everyone has a cell phone right now.
Things are changing. We get caught in the trap of This is how things are done. We always sold it this way. Once we can learn to shift out of that comfortable rut, things will improve.
One reminder: you are not a handset distributor. You are not selling a phone system. You are providing a platform for communications in 2016 that allows for productivity and efficiency. If you don't believe that just go sell bandwidth.
]]>Often I have said that the money would be in Layer 1 or Layer 7. It is clear today that if you do not own the pipes (Layer 1) then you better go up the stack to Layer 7 with an app to make yourself sticky.
In FB Messenger you can order an Uber and pay for it within the app. This should be a huge alarm bell for many companies.
Google Fi, Ting and Republic Wireless rely on wi-fi offload to keep the cellular rate plans low. If everything is a byte/packet -- including all your MMS and SMS traffic on a messaging app -- what happens to cellular ARPU?
There is a mobile UC company that has no desk phone option; offers its own MVNO plans; and ties into Salesforce with Zapier like integration. Mast Mobile even raised $7 million. It will be this type of thing that upturns the UC sector. Outsider, Dark Horse.
For being an engineering company, Broadsoft, has lost stride in the UC&C race. As it buys companies, it is getting outpaced by the likes of Slack and Mast. The race is going to heat up too. Microsoft wants this space. Cisco has a two-pronged attack in this space - Spark and HCS. Avaya, MITEL, Shoretel, Unify, Panasonic and NEC are struggling to hold on to their grip of the marketplace as well. Metaswitch is revving up its engine.
There are actually 3 separate markets: Hosted PBX (for folks that want key system replacement), Contact Center, Workflow. The important features include GUI/portal, analytics, integration and ease of use. No company will be good at all of that. Oh, they will try. They will struggle, spin, twist, but being everything in the 1-1000 space ignores the reality that those are very separate markets with different needs, buyers, sales triggers. But hey, investors, greed and clueless execs have always been a part of telecom. Why change now?
It won't be one of the current players that wins the UC&C marketplace. It will be a surprise, an upstart. And it won't integrate with Salesforce either. It will have a great GUI (user interface). It will be simple but elegant. It will be designed by users, not engineers. It won't be a faster horse; it will be a Model T.
PowerNet agreed with me that the key to success in UC has a couple of factors. One, know your target market. And that if that target is 10-500 or 100-5000 employees, you are already in trouble. You better have a product manager for the various services that will target each segment of that target market.
Deployment, support, customer care and training are the factors that will win.
If you think competing on price is the answer, then you have to cut costs - in deployment, support, etc. You have already lost. You can't beat the WalMarts at price. In our business that would be the cablecos and the OTT ITSPs who will win a deal at any cost.
If you think drop shipping the phones is going to be the way to go, here's the 3 places that your thinking is wrong. (1) Are you better at this than the 3 folks doing this well today? (2) You are still thinking about desk phones! (see below) (3) Do you have an answer for solving churn, returns and acquisition costs?
The drop ship "solution" is great for the under 15 employees - and there are 25+ million of these businesses. This is voice replacement mostly; it rides over the top; it requires QoS; high churn business. And there is still the marketing part of the equation: How do you acquire customers profitably?
If you wanted to go this route, why did you spend the bucks on a softswitch? You could do this with a class 4 or an SBC or a Freeswitch!
In voice replacement (or even in key system emulation), if the customer isn't using the product features for the benefit of their business, they are going to churn (for lower price or better support or better quality). That means you have to sell on benefits, outcomes, case studies (not price). You have to deploy to the design of the outcome. You have to train and re-train the employees to use the system.
You are selling change.
YOU ARE SELLING CHANGE.
Or you are taking orders for dial-tone. Which is it?
"Ninety-three percent of employees that use unified communications (UC) tools increase productivity, according to a recent study commissioned by XO," the press release reads. "The research reveals that the two UC tools having the most direct positive impact on employee productivity are presence detection and multi-channel contact centers."
There is a lot of chatter about desk phones going away. If that were true then VoIP Providers would stop being Polycom distributors and sell the comms platform first and foremost. That isn't going to happen soon. Despite the clamor that it is all mobility, the ITSPs still talk and sell desk phones. If mobility was the answer and end-all, the sale would center around click-to-call, softphones and portals.
There are a number of disruptors in the space (see above). Many apps have video calling, texting and voice calling abilities (WhatsApp, Snapchat, Skype). The VoIP provider has to recognize that integration is a vital step in being sticky. It is also the next evolution for AAS providers. Get out of the silo and connect with other apps. Even RC agrees according to this article on UC. Fonality is getting into the integration game as well. Integration drives productivity - which is the outcome you are selling. (Vonage didn't buy gUnify by mistake.
"According to IHS research, 85% of organizations are using smartphones as part of their UC strategy and 79% view voice integration with their business apps as critical." [source]
If you think mobility is the only saving grace, re-think your service offering. It needs to contain integration, sound design for outcome driven deployments, training and re-training and customer care (not support, care!*). None of this has to be sold on price. Only 40% of the buyers use price as the sole factor; that means 60% know price is not everything. Those 60% have to be sold on the value of your offering; sold on the outcomes in productivity and efficiency that your platform can deliver. (BPI!)
It has been 12 years since I first saw Hosted PBX. In that time, 15% penetration. Something has to change for that to change.
SIDEBAR:
Robert Scoble announced that Rackspace will be re-selling AWS! You get Rackspace's fanatical support for your AWS finally. People will buy support. Always have, always will. Rackspace has a culture of fanatical support. There is a $1.8 billion dollar business model around support.
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