On Rad's Radar? - mpls Archives

Will It Rain for EarthLink in the Cloud?

2012-05-24T04:32:20Z

EarthLink is really pulling out the umbrella to get it to rain in Cloud. EarthLink picked up XO's former CMO, Michael Toplisek, as EVP of IT Services. The press release says that he was President of Concentric Cloud, but that was for a hot minute, since XO only rolled out that brand 2 weeks ago. He's not a cloud guy - he worked at XO, Global Crossing, MCI and Frontier - all telcos. The only IT he got near was conferencing at GC. Why would you spin this resume? (Especially after the Yahoo resume-gate.)

EarthLink rolled out 4 cloud packages. "The Cloud Launch Pad, the Cloud Entry Bundle, and the Secure Email Bundle enable customers to economically partner with EarthLink to complement their internal IT resources by leveraging a comprehensive mix of IT Services and security experts in an enterprise class data center environment." [Source: PR Newswire] FYI, "Cloud Launch Pad is designed for organizations that want to leverage the benefits of a virtual environment or that currently run VMware® environments and need additional elastic computing capacity."

These products allow the business to keep things intact, but layer on Cloud Services from EarthLink to complement the current system or outsource extra capacity or services.

The Secure Email Bundle is with Zimbra, encryption and archiving.

The fourth package is Cloud Workspace, which is hosted virtual desktop.

An interesting play since it sounds like it requires MPLS. If so, then ELNK is tying their products to MPLS, probably to insure quality of service delivery.

Will they be able to sell these services against other MSP's and VMware partners? We'll see. It will depend on training - not just salespeople but the marketplace as well.

Watch this video where all the Master Agents talk about why they are choosing EarthLink.

The Incumbent Mindset

2012-05-10T18:02:28Z

I'm heading to NYC next week to attend Seth Godin's seminar. It is always worth the trip to me. From his Domino Project newsletter today, a little insight:

"It happens to just about every industry, from hard drives to furniture--the insurgents, coming up from the bottom of the market, had an incentive to refine their techniques, engage with their customers and innovate. The incumbents, saddled with much higher costs and less innovation, watched themselves go bankrupt, one by one."

Can you say China? HUAWEI? Vonage? 8x8?

Every market gets disrupted. The Internet has been the greatest tool of disruption. Think about Netflix and Google Apps.

"Instead of working hard to keep their share of a shrinking pie, or working even harder to make sure the industry stays as is, I think the most essential thing legacy ~~book industry~~ players can do is set up independent ventures with great people and little interference and work really hard to put themselves out of business by starting at the bottom, not by reinforcing the top."

Some ILEC's like Windstream, TDS and CenturyLink have used acquisitions as a way to counter-balance disruption that broadband and cellular have done to the market. M&A will only get you so far.

We are already seeing where Live365/Office suites have become a commodity. VoIP is certainly sold as a commodity. Hosted PBX is probably next. Any time you can automate it, someone will come along, with less costs, and undercut your price. The Incumbents will have to take the hit just to stay in the game. Look at CLEC's and the T1 market. The cablecos are disrupting the T1 market. Next it will be MPLS.

It will be skill set, human talent, integration, customer care, and WOM that will set your product offering apart from the rest of the crowd.

That Seth Godin always gets my mind going.

Is it Cloud versus Agents?

2012-05-02T16:45:52Z

Is it Cloud versus Agents?

As an Agent, I sell bandwidth and transport almost exclusively. I am learning that the Channel does not want that business. The carriers do, but on the wholesale/carrier side. No 10GB private lines. No 1GB ports. Nope. The Channel wants Multi-site multi-access customers. That's fine. Just stop talking about your fiber map then. It's irrelevant for that kind of sale.

The CLEC's also want Agents to sell Managed Services and anything Cloud. That's nice but who cares?

Cbeyond announced that they are "no longer recruiting traditional telecom agents". well, they already signed up the biggest masters - CMS, Telarus, Microcorp, TBI, etc. So what they are really saying is that traditional agents will have to use a master agent to get paid. That's becoming Normal in telecom. Carriers just want to deal with master Agents. I guess, they think that is more effective or efficient. I have no idea if it is either. We'll see, I guess.

Like so many other providers, Cbeyond thinks that the answer to its cloud strategy will be VAR's. That's not likely to happen.

VAR's don't trust telco. (Heck, I'm still waiting a month for an FOC from XO on an Internet T1, so I totally get the attitude.) VARs already have relationships with VAD's like Ingram and Tech Data, who can provide most of what Cbeyond is offering - or they can provide it themselves. Would you go to Rackspace or Cbeyond or EarthLink for hosting? That's basically what it comes down to: who is doing the hosting.

Right now Microsoft itself and carriers are getting into the traditional VAR space (offering hosted Microsoft products and data backup). Why would VAR's shift from a reseller model to a sales agent? It's kind of like, do you want white-label or straight resale?

The thing that most miss is that it is all about Control. In white-label, you can build a branded business that you have a decent amount of control over, especially in Hosted PBX. In straight resale, the bill, the brand, everything is in the carrier's name. No control at all.

My clients - CLEC, ISP and ITSP - want the illusion of control - or at least as much control as they can get. VAR's want the same thing. In the case of the ISP and the VAR, they like technology, but selling and marketing not-so-much. And you won't have much success forcing them into a sales+marketing shop - any more than you will trying to get T1 slingers become Consultative Sales people pitching cloud. Why? Motivation. Comfort Zone.

Robin Robbins has a very successful business offering turn-key marketing programs to VAR's. Cloud providers need to plug in to that kind of a system.

XO just re-launched its old hosting brand, Concentric, probably to get some space between the telco and its cloud services. (XO has to do something about its reputation in the telecom space and re-branding buys them time until someone buys them.)

Some Agents will obviously move into this space. Some already have making money on Cloud Comm like Hosted PBX, UC, IVR and conferencing. Some have sold collocation - although its a big leap to PAAS and IAAS from colo. But virtualization might be a nice tool in that box. It will come down to who you trust to deliver it.

I'm not saying Agents shouldn't be shifting their business. Lord knows that the way it is now, it is extremely tough to make the living we are used to while selling what we are used to. So a shift has to come. I just don't think it will be to the same carriers that make it in the future. When you look at things like commission adjustments, contract disputes, channel segmentation, and the like, Agents might want to try another silo of vendors to see if they get a better shake.

There is a tremendous amount of competition for the attention of Agents and VARs. That means that there will be price competition, commission shopping, and other things that the providers do not want to have to deal with right now.

The only providers who can afford to be exclusive right now are vertical cloud providers and cablecos - both have an almost exclusive product to offer.

Everyone else is selling the same stuff - MPLS, SIP, backup, managed network security, blah, blah, blah. That means the Channel can shop around. And as you can see from the ecosystem diagram, there are a lot of places to shop - VAD, Microsoft, Google, Amazon, ILEC, CLEC, Cableco, MSP, Rackspace, Web hosts, Parallels, ITSP's, and so much more. And Agents can just partner up with a VAR or MSP to sell their own services, leaving the CLEC's out to dry.

It's a matter of control. Do you want to build yourself a business with white-label partners (like VAR Dynamics) or do you want to trust that the telco that is having trouble delivering telecom services reliably will be able to provide you and your customers with unparallelled service delivery of cloud services?

We'll see. In the mean time, be nicer to the Agents. They may be all you have left.

Get Off the Agents' Back

2012-04-12T21:48:50Z

These were my thoughts on the 2011 CPZ that I was a panelist on. These are my thoughts as a reaction to the latest CPZ.

Surprisingly, not everyone read my post about how the whole telecom eco-system is shifting. Agents, Masters, Carriers and Cloud Providers are all going to experience a Shift.

Did you ever see Shift Happens?

Considering all these factors - Quota, Debt, declining revenue, pricing pressure, and flat markets - the future does not look bright.

Most of the people who were talking on the CPZ 2012 video about transactional agents are not actually agents and to my knowledge never have been.

Does a subset of Agents shop masters? Probably. On the other hand, I know masters who shop to sub-agents with "I'll give you another point or two to go with me." Part of this is due to the weight of quota on the Master Agency business. Master Agents are under a tremendous pressure to hit quota to keep the support level and sustain the commission revenue at its current level. So don't get mad at the Sub-Agent when Masters are doing it too.

Value and Telecom

The whole Industry talks about VALUE, but can they describe it? No. Our Industry has been a series of me-too, arbitrage bandits selling the same thing: UNE-P, Integrated T1, SIP Trunking, and today it is MPLS. It's all just similar looking and sounding services. How does an Agent or a Prospect tell the difference?

Branding is non-existent in our space, except for the Duopoly of ILEC and MSO. You create value with branding. Other value comes from benefits and differentiation. We are lacking the Differentiation.

Without value, it becomes a commodity. Commodities are price shopped. Tell me the difference between any two Internet T1's or any two SIP Trunks.

Carriers are Unhappy with Agents

Just because Agents don't act like you want them to doesn't mean they are all in the wrong. You built this current eco-system. Now you want the ship to turn on your say so. Easier said than done, pal.

Truthfully, have you done all you can to give Agents the tools they need to sell your product? Not to be repetitive, but have you established your value statement? Do you know who the target market is? Do you know what triggers the sale? Who is the actual buyer? Answer those questions first.

The Industry wants the Channel to go upstream, except they don't. By that I mean, the carriers want revenue. Period. It's all about quota. While they might want an Agent to sell MPLS, they aren't turning away T1 business either. However, they want the Agent to turn away from that business to go upstream. Yeah.

Keep in mind that it might be that the marketplace doesn't want to go upstream either.

Right now, Cable is doing an excellent job of disrupting the market and stealing business with cheap loops.

At a CLEC training, it was stated that cable would own the sub-$500 business. It sounded like they were conceding it. The cablecos will become the de facto ILEC's. I have no idea what the ILECs are going to do. Only the 2 RBOC's have a cellular business. And CLEC's will probably run into too many problems to continue to sell network access.

In that same training, the CLEC stated they wanted Multi-site, multi-access business. Unfortunately, everyone wants that business. Masergy, Smoothstone, EarthLinke, Megapath, Netwolves, Wind, CenturyLink - just to name a few. To hear carriers talk, I guess, MPLS is the new Integrated T1 (in every way). They say there is more margin in it. No there is not. There is more revenue per customer, but they will have to give away margin to (A) hit every site and (B) win the business in a hyper-competitive marketplace.

No one buys the way most service providers sell either. That's why the carriers are always searching for Consultative Sales Professionals. The whole industry sells what they want - and it is followed up by a series of me-too. Just because one CLEC is selling Managed Security does not mean that the marketplace wants it or will buy it or that it will want it delivered that exact way. It also doesn't mean that the next eight CLEC's or service providers need to market that same offering. Do we know what the marketplace is expecting?

How Things Can Shift

One thing that could cause a big shift is if Tech Data becomes a Master Agent. With TDMobility, they already have the platform and are selling cellular in a Master Agent model. Plus by offering mobile device management, TEM and all that hardware, they have caught up to the big Masters. CDW could become a Master Agent if they wanted to - and they might have to in order to sell more hardware.

Dell could become a Cloud Provider. As it stands now, they are an MSP Enabler. And Dell is selling CDN now! It will be interesting to see what Ingram and SYNNEX - both betting on cloud services for their future - do to not have to compete with Dell head-to-head, while also competing with Tech Data.

I don't think that most telcos will make the shift to managed services and cloud successfully. It's labor intensive. It doesn't scale like telecom. They think they can automate everything, but that only works for cookie cutter stuff. Plus they can barely deliver telco services without a headache. I think MSP's will win this war. Any company that can integrate apps (like CRM and invoicing with Exchange and Sharepoint) will be successful. If they partner with VAR's who can handle the on-going maintenance and support that all this technology will require, they win big.

Can the Channel change to become Trusted Advisors? Probably not all of them. Selling Cloud is different than selling telecom. Period.

The Channel basically sells replacement services. Here are some examples: VoIP for POTS: SIP Trunk for PRI; Ethernet for T1. Each transaction is replacing like for like. Even MPLS is just a replacement for Frame Relay, ATM and IP-VPN.

That is why selling Hosted PBX and other cloud services are so challenging: It is not a simple replacement. It's not like for like.

The sales process for selling replacement services is pretty easy. When the sale becomes about business process change or fork-lift upgrades (like Hosted UC or Virtual Desktop), the sales skills are different. The sales cycle is different - and longer. Provisioning takes longer. Ultimately, commission payments are much later.

This is really important to remember.

Selling Cloud and Managed Services will not just be more of a challenge, but it may be less satisfying. Why? Transactional sales types are motivated and driven by quick hits and a lot of ink in a month. Extended sales cycles are less motivating to this type of sales person.

Moreover, as commissions decline with the price decreases, agents have to sell more and more to maintain their revenue goals. Shifting to new products, new sales skills, and a different sales approach will be a huge leap, especially without training, a financial cushion, a deep desire for change, and vendor support.

Agents are not FARMERS! They are Hunters! They do not do Account Management, cross-sell or upsell to the base. Smart agencies will higher a couple of farmers to work the customer base and perform account management.

All of this makes me wonder who will be the Agent of tomorrow, who will be grooming accounts and performing consultative selling of complex solutions to their customers?

What is the Market Expecting?

2012-04-01T17:46:30Z

Tuesday I was in Vegas at the Channel Partners Conference mainly for the TCA events. At the TCA Channel Chief Summit, Tiffani Bova of Gartner and Rauline Ochs of IPED Market Bridge Alliance presented research. The take away for me was in perspective.

No one buys the way most service providers sell. That's why we are always searching for Consultative Sales Professionals. Because the whole industry sells what they want - and it is followed up by a series of me-too.

Just because one CLEC is selling Managed Security does not mean that the marketplace wants it or will buy it or that it will want it delivered that exact way. It also doesn't mean that the next eight CLEC's or service providers need to market that same offering.

The market is consuming technology differently. It enters the business via the consumer. About 70% of devices are owned by the consumer in the business environment. Only about 30% are paid for by the business. That means support for devices either isn't available or is imposed on the IT staff by the employees. That's a confusing (and expensive) way to handle it. Don't you agree?

Most of what Bova and Ochs presented had to do with mobility and Cloud. Mobility is a huge problem for most CLEC's as the model for cellular sales is unprofitable - whether they sign a wholesale, agent or MVNO contract - the margin on cellular is thin to none.

And what is prompting Cloud? Two things: ubiquitous broadband and a mobile workforce.

Ubiquitous is really hyperbole because even with 3G, 4G and wi-fi, you can't get bandwidth everywhere and even when it is available it is shoddy (like at tech conference hotels).

Mobile workforce means a couple of things. One that more businesses have accepted remote workers - whether at home locally, across the country or across the globe. The economic downturn (and all the consolidation) has translated into businesses having less workers but expecting more work. This means working at home, while on the road, etc. Hence, not just email, but the application data has to be available from any authorized, connected device. That is the beauty of Cloud.

Cloud changes the way business is done.

Read that again, because that means it has to be sold that way.

It's easier to sell email, because everyone has email and it is almost a requirement. Selling unified messaging gets more complicated. Unified Communications and Collaboration is just too complex of a sale, of an explanation, of an implementation, of a deployment. That's where the service providers want to go, but they neglect the challenge of the sale. There is a lack of the story, the sales triggers, the value proposition, the WHY, and of course the on-boarding.

One thing Bova pointed out was that VDI (virtual desktop) sales have grown in EMEA (Africa and Mid-East) while have stagnated in North America. One reason: VAR's have too big a quota with HP or Dell to take a 500 desktop refresh to VDI instead of selling 500 desktops. Not just the quota for the discount, but to sustain Gold level service. It's the same with Cisco, Microsoft, etc. VAR's will keep selling what they sell for 2 reasons: First, to maintain the current level of vendor support to continue to service current clients in the manner that is expected (or even contracted). Second, making the changes to shift business to an MSP or all service model is complicated and expensive. Bova suggested firing clients and employees to create the business you will need in 5 years, but that's easy to say from a consulting seat. Not so easy from a business owner perspective.

When EarthLink told its channel partners in Tampa that it only wanted Multi-Site multi-access opportunities, it didn't come right out and say that it would stop selling T1's, but that was the underlying message. (And ELNK did tell me that 1GB and 10GB private line, even ON-net, was not what they wanted to sell.) That's one way to start planning for where you want to be. Say no while being specific about what you are looking to offer.

As a whole I don't think the service providers have any idea what buyers are buying or why. Just because you WANT to sell MPLS with security or Hosted UC&C or whatever, doesn't mean that prospects will actually BUY it (that way).

When does something become a commodity? When the customer buys it directly online.

For non-commodity services, you need a well trained sales force that understands the brand, the value proposition, and the target. As an industry we aren't there yet.

I'm going to leave you with that.

Coming soon two posts: (1) Master Agents are like Pharma Reps. (2) Tech Data versus Master Agents.

EarthLink's Sweet Spot

2012-03-14T19:53:22Z

I learned a few things at the EarthLink training today in Tampa. EarthLink has 175K business customers and about 3 Million consumers, most of them dial-up customers, providing $20M in free cash flow per month. So of the $1.3B in annual revenue, about $500M is dial-up. ELNK has 4 data centers - Columbia, SC; Rochester, NY; Marlborough, MA; and 55 Marietta.)

The first (or 70+ slides) shows that Pipe is the foundation for Managed Security and other services. However, despite having 28,000 miles of fiber, they don't want to sell transport on it. Even On-Net gets the response that "This is not our sweet spot".

What is the Sweet Spot? As I wrote here, Multi-Location Multi-Access type across LEC's or cablecos.

The partner portal is in development. The customer portal, called myLink, seems cool they way that you can drill done on customer locations in Google Earth and open a trouble ticket.

Agents in the room, called T1 Slingers, asked about DSL, since EarthLink resells ADSL out of 10K end offices through 12 providers. As a resell service, a 1FB is required. And since neither RBOC is really supporting their copper plant and especially not DSL, it leaves the business DSL customer hanging for days when there is an outage. [See my post about Is DSL Done?] 3G/4G wireless backup is my answer for that. There are cool routers that even do it automatically.

The other question centered around T1. "You just are not going to make a living slinging T1's at $400 any more." PRI's are available east of the Mississippi still, which actually IS an advantage for ELNK. TDM PRI's are still the preferred reliable way to deliver voice to a PBX, especially with alarms, faxes, and elevators.

It was an hour on MPLS. I still find it amazing that almost 9 years after my first MPLS class, we are still presenting the Fundamentals of MPLS. For Agents, it will be about layering on services to the MPLS network. The sticky stuff is value added services.

Retail needs a voice line, some Internet, credit card processing, payroll and data backup. That should actually be a bundle that someone offers. ELNK has the old New Edge AX platform that connects payroll and cc processing to the MPLS Network. Add on a VoIP line and some data backup and there's a bundle. Want to make it stickier? Add network DVR to the service so that those IP surveillance cameras can be viewed from anywhere (and can't be erased locally). Bingo! (Do you have an opening in Product Management? My resume is here.)

The team mentioned POS, Inventory, HR and Loyalty programs. Do you have those on the AX platform? Those would make some excellent sticky add-ons.

"So we have an Internet T1 service that connects you securely to one of 4 data centers, Mr. Prospect. Do you currently have a payroll service? Are you looking to upgrade your POS? Are you worried about security on your credit card data (PCI compliance)?"

That's where the conversation has to go. Even though the customers just want the access - as cheap as possible - Agents will have to steer the conversation to: applications on top of that access (AOTTA).

So back to MPLS with Type II access. Ethernet is delivered over a Type II DS3 from the LEC. T1 is delivered over the ILEC copper pair. DSL is a resell of the ILEC product offering. Then for outliers to attach to the MPLS network, there is an IPSec GRE tunnel with BYOB (bring your own broadband). Blended Access.

EarthLink is a Sprint MVNO, but it is more for 3G access where there isn't DSL to attached to the MPLS. Also, for the MPLS customers that want to have one bill that included cellular.

Something else I learned: ELNK bought STS because Rolla knew the Mark Amarant, CEO of STS, and STS had a reputation for best practices in on-boarding customers in the Hosted PBX realm. That's smart, because Hosted PBX (like VDI, another product that ELNK is rolling out), requires a detailed on-boarding process from pre-sales through post-sale, including mapping extensions to desktops, extension attributes, handset type, employee training and some on-site installation. EarthLink is not selling Hosted PBX as a stand-alone. You have to buy access from ELNK.

So in summary word of the day: "Blended Access".

Key association: Multi-location multi-access MPLS.

What Else Are You Going to Sell?

2012-03-04T23:44:40Z

TDM is running out of runway. Agents have already switched to selling Ethernet, MPLS and SIP Trunking. What else can they be selling?

Back-up, like Conferencing, is a cash cow that Agents just don't sell. From archiving email per federal regulations to backing up laptops, smartphones, databases, customer records, billing and more "in the Cloud", online backup service isn't much different from Google (see Chrome ad) or Apple iCloud. Access to everything you need through an authorized device attached to the Internet is the beauty to Cloud services, but backing up data is vital to business continuity. How long can a business run without billing records or a customer database? Not very long. Think how flummoxed you are when you lose your contacts in your smartphone. Imagine that contact list was your business. That's why backup is important (to your customers). VAR's are already selling different versions of online backup: their own; a white-label from Remote Backup, DriveHQ or LiveDrive; and a resell of Carbonite (who is hugging Agents right now) or Intronis (who loves the Channel) or Anxient or many others. There are some like SugarSync or Mozy that backup your smartphone and your laptop to the same account.

Managed Security - most of the CLEC's (XO, EarthLink, Netwolves, Integra, Cbeyond), the RBOCs and the ILEC's (Windstream and CenturyLink) offer some type of security offering, usually Managed Firewall, IDS (Intrusion Detection Service) and Network Monitoring. As more data moves to the web (Cloud), security will become even more significant, in the form of email and application security, encryption, event and log management, and mobile device management. For example, Reflexion provides hosted email security, archiving and encryption services exclusively through the channel.

Hosting and email services - everyone has a website or blog; everyone has email. Why shouldn't you be offering those services too? XO started out as Concentric Network, a hosting company. This was Cloud before it was called that. XO sells Hosted Exchange and website hosting. Megapath just rolled out the Microsoft suite. Intercall offers Live365. It isn't big dollars, but it is a place to get your feet wet in Cloud and apps.

Managed IT - remote monitoring of servers and desktops - is a VAR service powered by software like Autotask, Connectwise, Kaseya and GFI MAX. As businesses are essentially dependent upon computers and technology to do business, managed IT services become an option when skilled technical support staff are too expensive, churned or unavailable.

A step past, Managed IT is the remote desktop - aka Desktop-as-a-service (a term I dislike) and VDI (virtual desktop infrastructure). In 1999, Wyse terminals were going to replace desktops for efficiency. It didn't happen (except in the POS space.) Now we are trying it again. MSP's offer this service - with a big fat helping of bandwidth. There are big names in this space, including Citrix, VMware, and Microsoft. There are also a number of providers, like IIS Group, who provide VDI through the channel. Navisite, which TWC owns, just chose Desktone as its DaaS partner.

Next to DaaS is HaaS, or Hardware as a Service. Don't ask me how this is different or how it isn't just leasing. Ask Chartec.

There are issues with selling cloud services - like the service provider's (SP's) financial position; redundancy and resiliency of the SP's architecture; SP's ability to scale in terms of on-boarding new customers properly and scaling tech support for end users; the end users' experiences as cloud services will change some business environmental factors; and licensing issues.

That being said, Agents should be surveying their current customers about the needs outlined here. Why? To get a bigger share of the customer's wallet.

Another way to look at it is: the customer is going to shop these services like he shops T1's, broadband, and voice. He might as well pay you to shop them for him, like he does for the telecom stuff. Get in there!

If you liked this, you might like this blog post too:

What about selling Cloud

One addition, I interviewed VAR Dynamics (local boys from Tampa) at ITEXPO. VAR Dynamics is a private-label Software-as-a-Service (SaaS) and Cloud business apps provider selling exclusively through channels. Apps include Microsoft Exchange, Microsoft Dynamics CRM, Microsoft SharePoint, Zimbra, BlackBerry BES, email encryption, email archiving and more. There will be cross-over in what a provider sells. Just as VAR Dynamics sells the Microsoft software and email security, CLEC's that you are already familiar with - like XO and Cbeyond - offer a variety of services to sell deep into your customers.

What Twitter Told Me This Week

2012-02-10T16:11:39Z

I get a lot of articles off twitter. Too many to write about all of them so I am just going to drop some on you here.

Please be advised that the FUSF rate for Q1 of 2012 has increased from 15.3% to 17.9%. For further information regarding FUSF Fees and rates please see the FCC website.

RebTel is #2 behind Skype with 15M users doing 2 billion minutes of international calling. [venturebeat]

Both Florida state and federal lawmakers are trying to overturn the NFL blackout rules. Main argument is those stadiums were paid for with public tax dollars. [tbo]

Besides the M5-ShoreTel deal, I saw 2 other acquisitions occur. [radinfo]

Your open wi-fi access point leaves you open to lawsuits. Awesome! [radinfo]

FCC Eyes Google Voice’s Rural Call Blocking - just a part of the whole FCC Rural call completion review and the inter-carrier compensation issue. BTW, it's AT&T that keeps poking Google in the eye at the FCC about this.

It's Halftime America!

EarthLink is still utilizing the AX platform from New Edge Networks (now named EarthLink Business). XCast just set up an NNI (an inter-connection) with that platform for better performance. The AX platform allows cloud providers to connect to EarthLink's nationwide MPLS network for better quality to the users.

TELX is building another data center in NYC, land of not much commercial space for sale.

MITEL has achieved CLEC status in all 50 states. Maybe that's to help it deliver Hosted MITEL UC service to its customers.

What Will You Be Selling in 2012?

2011-11-16T14:18:51Z

Most channel executives will tell you that the 2 biggest products for 2012 will be MPLS and SIP. It makes sense since the PSTN is being phased out as the telecom infrastructure turns to an all-IP network. It also makes sense that not all traffic can travel (safely, securely or timely) on the Internet, so MPLS becomes the WAN solution for control and privacy.

Ethernet will be the product of choice. No more T1. Everyone is going to want an Ethernet hand-off at 10MB, 100MB or a GigE. Even Telarus has added Ethernet to its GeoQuote tool. XO, TelePacific, MegaPath, Paetec and Mammoth Networks have all announced EoC (Ethernet over copper wires) availability. [Now if all 5 carriers had a shared database for EoC availability THAT would be worthwhile.]

Of course, we will hear all about Cloud services from every carrier, including Cbeyond and Integra Telecom. We will hear cloud a million times in 2012. Maybe the conversation will turn to Cloud Differentiation. IN other words, what kind of Cloud are you selling? Is it redundant, resilient, duplicated, backed up, SAS 70, PCI Compliant and secure? How so?

But Cloud means that we will be hearing about Managed Services, especially Managed Security. EarthLink has been talking up its Managed Security offering for its MPLS customers. Integra Telecom launched its Cloud Firewall Service at ITEXPO. Netwolves has been selling this kind of stuff for years. Even TelePacific is jumping in this space (of managed security) due to its recent acquisition of Telekenex.

The question really becomes: What will the Channel sell?

Agents will continue selling POTS, T1, PRI, broadband - but what will be the breakout product for them?

Will it be cellular? If so, it will likely be 3G/4G backup for broadband.

Will it be Ethernet? Probably, because it can be sold as a replacement service for T1. (But agents will need to learn how to sell DIA over broadband, which many will likely not even try.)

And selling SIP trunking as a PRI replacement is currently happening. however, Agents need to remember that they need to check for interoperability between the SIP provider and the PBX (or customer equipment).

The Cloud folks wish that Agents would sell their stuff, but I don't see that under the Christmas tree this year for them. Maybe 2013.

Agents Need Training

2011-11-01T04:09:18Z

According to David Byrd of Broadvox, agents and VAR's need more training when it comes to SIP. As he wrote in his Wild Mushroom post, "Too often we encounter a situation where an agent sells a SIP Trunk with no understanding of the difference between it and a PRI. This can lead to a disastrous situation. First, an agent needs to understand that the bandwidth require per phone call is more with G.711 not less than a PRI. Second, IP enabled equipment is required. This can be an IAD, IP PBX or, in the best case, the addition of an IP board or card. It is also very important to check the carrier’s interoperability IAD and IP PBX list."

Inter-Op and codecs are just a couple of things that Agents and VAR's need to learn. The world of TDM is defined by standards and pre-set configurations. The world of IP is wide open - no standards, just a bunch of specs that engineers and geeks tweek to get things to work. Being a Net-Head means a world of possibility, but it also means that pre-sales checking becomes paramount.

There are lots of places to get training. Alteva has a cert program that costs about $350, which includes sales and product training. As Byrd mentions, SIP School is around. MegaPath offers MPLS University. Avaya has a SIP for Dummies book. Almost every carrier has training on their product. I know that you get inundated with training webinars, but services today are not what you were selling five years ago. Take the time to take a few. Or lose out to other Agents who DO take the training - and become the Preferred Partners for the carriers.

Agents and VAR's can also test their knowledge with the TCA's Certified Telecom Professional certification program. The program includes subject material that can be reviewed before or after taking the exam. (Testers get 2 shots at getting a passing grade of 70.))

So PAETEC is in the WIND

2011-11-01T03:36:27Z

A majority of PAETEC shareholders voted yes to Windstream's offer. It looks like Level3 and EarthLink won't be grabbing Paetec. There are other CLEC's to grab, especially Icahn's XO that just let 400 employees go.

Meanwhile, Network Billing Systems (NBS), "a fully-integrated telecommunications service provider, is expanding its MPLS network by partnering up with Windstream in an effort to expand the delivery of value added services to customers. The Network-to-Network Interface (NNI) with Windstream's advanced MPLS IP network will allow NBS to offer MPLS via Ethernet and T1 connectivity." [press release on TMC]

The Panel of 5

2011-10-11T13:29:53Z

How does an agent distinguish between five CLEC's if the channel heads of those five companies spend much of an hour saying, "I agree" and "What she said".

That's what happened at the carrier executive panel at the Microcorp One-on-One event last night. Donna Wenk, SVP at PAETEC; Blake Wetzel, VP at CenturyLink; Mike Jerich, VP of Global Crossing and now Level3; Cardi Prinzi, EVP at EarthLink; and Carolyn Rehling, Regional VP of Sales at Sprint sat on a panel as Brad Miehl, CEO of master agency Microcorp, asked about plans for the Channel, products and what we might see in the Industry in the near term.

Everyone said MPLS and SIP -- oh, and Cloud - would be core products in 2012 - even Sprint, who mentioned its global MPLS. Sure, but you have to stop men tioning wireless in the same sentence as your wireline division to avoid scaring off the buyers.

Who will be the buyers? On big deals, it will be the whole C-Suite - CFO, COO, CIO and even the Board of Directors. You are going to have to talk to each one about these deals - especially Cloud - in their own language.

All five value the Channel. What else would you tell a room of agents? But Wetzel did note that 67% of all technology is purchased through the indirect channel. Half of PAETEC's revenue comes from a third party (indirect, referral).

We will see more consolidation in the next 24 months was something else they agreed upon. Donna Wenk stated that rate erosion, churn and buying power were the main reasons for scale (consolidation). Prinzi mentioned that there are companies ripe to buy right now. It has been noted before that acquiring skills and products -- like virtualization, hosted PBX, or a vertical product set -- are good reasons to buy (instead of build).

Will there still be transactional agents? Of course. Companies still need network. The five carriers are looking for partners who are willing to shoulder more of the burden (like have their own NOC, support people, etc.)

On Teaming: it can work, but real life experiences from agents in the crowd is different. You might need teaming on some deals - even if it is just to avoid the direct/indirect price war over the customer - but he who has the relationship should manage the account, in my opinion.

On Convergence: Wetzel says it's all about where they store their data. Hosted IVR, Remote Storage, Communications-as-a-Service -- all have been around for a couple of years, so all have been selling cloud for 2 years. It isn't knew. Jump on board.

The big disappointment (besides no Q&A) was that there was so much agreement, it's hard to figure out the positioning. I guess it comes down to who you like; which Channel Manager is the most helpful; and (after the TNCI BK) which carrier you feel comfortable with, because no one wants to lose revenue to a carrier bankruptcy. (Unfortunately, I think we will see more of those in the coming months as well.)

Ethernet is Spreading

2011-07-18T15:59:55Z

So many notices this week about Ethernet. It's the preferred protocol for most businesses. (No one wants to buy a DS3 card and configure it, I guess). Ethernet is becoming more and more available as the delivery protocol for Internet bandwidth, MPLS, IP/VPN, and Private Line.

The M&A targets are all fiber guys like FiberLight, AboveNet, Zayo, Sidera, Fibertower, Fibertech and XO. All are Ethernet players.

AT&T announced that come August 1st it is almost doubling the Metro Ethernet rates in the 9-state BLS region. What a bonus for customers.

Sprint launched Ethernet access in 25 new markets and expanded offerings in five existing markets. Ethernet is available for MPLS and IP products. Sprint finally leveraging their pin-drop network. [Don't want to play with Sprint directly, TNCI resells Sprint.]

FiberLight released a new IP network architecture based on Ethernet for governemnet and enterprise customers. Juniper and IBM are technology partners in this new IP platform.

In a similar fasion, Comcast and Ciena went on the road to train salespeople on how to sell Comcast Metro E. "Ciena's Carrier Ethernet Service Delivery (CESD) platforms are being deployed by Comcast as customer premise equipment for business services and wireless backhaul."

Media reports that wireless backhaul is a huge market - and it is slowly migrating to Ethernet. I think physics determines that wireless tower backhaul is a finite market - - you can only get so many bits into X amount of spectrum, no matter how many radios you use. So with everyone spouting off about backhaul opportunities, I don't know how many players will actually make a huge dent in revenue from it. I have seen figures that VZW pays less than $1000 per tower backhaul. That would take a lot of towers to move the revenue meter. And let's not forget that it is a competitive market -- RFQ and bidding war anyone? Especially after you told Wall Street how much the backhaul market would bring in. DUH!

In other Ethernet news in July that affects the Channel:

Netwolves announced that they can put multiple Ethernet providers with managed services on 1 invoice. NetWolves has relationships with over 50 different providers that sell Ethernet services. This allows us to find the provider that is best suited to deliver the service for you. We also have the ability to bundle multiple Ethernet providers onto a single bill for your customers.

Also, Airespring uses the lowest cost provider per area to build an inter-connected MPLS network. (Can you say NNI?)

NITEL is another carrier that can help Agents expand their product offering to with nationwide MPLS, Ethernet, dedicated Internet (DIA) and private line services.

EarthLink Business has nationwide MPLS, formerly sold under the New Edge brand. Since adding Deltacom, Ethernet should be available extensively in the Southeast.

All this Ethernet talk makes me think of the numerous Carrier Ethernet Exchanges that have evolved - from TELX and Equinix to Neutral Tandem and CENX. It's a lot of spots popping up to inter-connect using Ethernet. Basically, it's a meet-me-room with carrier ethernet switching gear (usually from Cisco) that allows the exchange of traffic at 100MB or higher. It is a cost-effective way to pay for peering (sort of), as you exchange traffic of HD voice, video, SAAS, mobile data, CDN and tele-presence packets. Carrier Ethernet Exchanges mean Ethernet sales and in many cases collocation sales for agents.

US Signal deploys Cisco ASR 9000 Series for enhanced Carrier Ethernet and a new managed Data Center service. The ASR will allow US Signal, a TCA vendor member, to scale its Ethernet offerings in the Midwest. "US Signal Managed Data Center service is built with dedicated resource pools designed to rapidly provision and host Virtual Private Servers accessible through the upgraded US Signal IP NGN." So we go from Ethernet to Cloud just like that.

Tele-Pacific Buys into Hosted

2011-05-06T19:16:11Z

Tele-Pacific is buying its way into Hosted PBX with its acquisition of Telekenex. TelePacific will gain approximately 1,000 business customers and 122 employees along with the hosted PBX platform. Tele-Pacific will run Telekenex as a separate channel, which is a good thing.

This is a good move for Tele-Pacific as it continues to dominate its region with more services plus another data center. It also gains a nationwide MPLS backbone and a fiber network in the San Francisco-Oakland Bay area.

Some telcos think they have to get into Cloud, so they are buying Savvis, Terremark and data centers. Other telcos realize that cablecos have a leg up on Hosted VoIP services, so they have to consider whether to jump in that pond. Some have, like XO and now Tele-Pacific. Still others, like MegaPath, realize that just selling Layer 2 and Layer 3 won't cut it long term, so they need to look more like an MSP (managed services provider). Tele-Pacific gets a data center, fiber, a Hosted PBX platform, customers and managed services - as well as talent to pull it off.

Since Tele-Pacific is so channel friendly, hopefully agents will get to make money from the new services division.

The FCC is Reforming

2011-05-02T21:03:26Z

The FCC is working on reforms.

Reply comments are due on Comprehensive USF and Inter-Carrier Compensation reform NPRM (notice of proposed rulemaking).

AT&T and T-Mobile Applications Have Been Filed (here) and the FCC Opens Docket for Proposed Transfer of Control of T-Mobile USA, Inc. to AT&T Inc.. Please comment. The Senate is holding a hearing on May 11 titled, "The AT&T/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?"

As part of the Universal Service Fund Reform, the FCC is looking for comments on Lifeline and Link Up reform and modernization. WC Docket No. 11-42

Even Congress is busy. The House Judiciary Committee has a May 5th hearing Ensuring Competition on the Internet: Net Neutrality and Antitrust: Part II, FCC Panel.