On Rad's Radar? - saas Archives

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.

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.

A Fun Chat with VAR Dynamics

2012-02-01T05:51:08Z

It started out coincidentally as VAR Dynamics CEO, Tony Francisco, was on my plane this morning. And he just recently moved from Silicon Valley to Tampa Bay, where I live. He is working with Gazelle Labs and spoke at BarCamp Tampa Bay, which is an un-conference I co-organize for the last 4 years. I had to go to Miami Beach to talk to him though. Go figure!

VAR Dynamics is the geeks in the cloud that run the servers that run the software that VAR's and service providers then re-label and sell to end-users. Back in the day, they would be labeled Master MSP as they enable MSP businesses. I called then an MSPE - a managed service provider enabler. Tony disliked that immediately. They are like the VAR Viagra - get them up and running on the Cloud in a day, fully turn key and automated through the magic of open API's. Tony didn't like that either, but his VP of Marketing, Darrek Porter, a man who was in politics once upon a time, did. This system allows VAR's to consume and re-purpose cloud apps in a self-service atmosphere.

I like it when the discussion is lively, more like buddies chatting over coffee than telling me your talking points. VAR Dynamics has almost 200 partners, which include telcos, VAR's and MSP's. What's the difference between VAR and MSP? Mainly mindset. Break/fix versus MRR (monthly recurring revenue).

VAR Dynamics white labels a lot of Microsoft products like Exchange, Sharepoint, CRM and soon Lync Lite. They also white label Blackberry Enterprise Server and Zimbra. Why Zimbra? "For those that don't like Microsoft." They have add-ons like archiving and "Compliancy", which means help complying with the myriad federal regs like PCI, HIPAA, GLBA, SOX, etc.

Francisco did name drop Autotask, ConnectWise, Jamcracker and Reflection as current or future partners -- again through the magic of well coded open API's.

Are you a company with a base of customers looking for MRR - "and control of their future"? Then VAR Dynamics wants to talk to you.

How do you control your own future? By selling white-label services, you are the provider - no carrier deciding that the bottom looks better when they stop paying commissions - so the monthly commission isn't going to get cut off, unless the customer leaves you.

End Caps

2012-01-21T14:49:32Z

This was the week that we learned that online protesting can work -- if enough people get involved and if you get the support of some powerhouse websites like Google and Wikipedia. It looks like SOPA was dropped and the vote on PIPA was delayed. (It is still alive due to Democrat lawmakers who are beholden to Hollywood like Florida Senator Bill Nelson. If he knew how to turn on his laptop by himself I could understand it, but come on!)

We don't really need any more copyright laws. If we did, would the feds have been able to fly to New Zealand to arrest the owner of MegaUpload? What was he arrested and renditioned for? Online piracy.

Not for nothing, but don't we have more important things to be spending federal dollars on? We are a nation with lost priorities.

And yet another carrier joins the CLOUD: "US Signal recently released an Infrastructure as a Service (IaaS) product offering, what US Signal calls Managed Data Center. Customers have increasingly requested US Signal to host their applications, for financial reasons, scalability, security, and more."

Yesterday, TCA held its monthly agent webinar with Netwolves presenting on Managed Services. With most of the telcos offering Managed Servcies, we at TCA thought it was time to give an overview of what Managed Services are from carriers, who is buying them and how does an Agent sell them. How does an Agent start that conversation with the prospect about managed services? The webinar was recorded and TCA members can play it back at any time.

Nemertes Research predicts a shortage of colocation space in the U.S. beginning this year. That is likely because some colo space is being used for PAAS and IAAS. Also, some colo houses don't want to sell colo any more because there is more cash in xAAS. (Or so they say.) I have seen that trying to find single rack colo slots are getting more difficult. Personally, I thought that when Amazon, Facebook, Google and others built their data centers, a lot of space would be opened up in other data centers.

The other issue with colocation is that Equinix, InterNAP and now Savvis have cut the channel out of selling their space. Other data centers - like Vegas' SwitchNAP - are difficult to deal with. That kind of affects colo sales, too. Luckily, ViaWest and TELX are still agent friendly.

Code 42 Software, a cloud backup service named Crashplan, got $52M in funding from Accel Partners. It seems a massive amount of funding for an online backup company.

Is 5G around the corner? Heck, most of the US is still in 2.5G-3G land.

Oracle Says RightNow

2011-10-24T21:12:08Z

What surprised me about

RightNow positions itself, not as CRM, but as a cloud based customer service company. "RightNow's products add leading customer experience capabilities that help empower companies to interact with and provide a consistent experience to customers across channels," said Greg Gianforte, CEO, RightNow. This should dovetail well with Oracle's idea of Public Cloud that consists of sales force automation, HR/talent management, social networking, databases and Java. This transaction will likely ripple to more Cloud M&A - something that
The Cloud is really a value for IT services. It's about leveraging the technology and the technical skill set of another company in order to let the business focus on their own finctionality, instead of the tech that might help the business operate.

The move to the Cloud by carriers is due to the lack of margin growth in the primary business of access. It's moving up the OSI stack from Layer 1 (wireless, copper, fiber) to Layer 3 (Internet) to Layer 7 (Apps). As we have learned with the iPhone, people use apps. Apps drive traffic. So if you go after the apps and move them into a data center (into the Cloud!), then you make it possible for the business to have access to that data 24/7 from any where with many devices - laptops, smartphones, etc. That's the trend in the marketplace.

Just to simplify Cloud for you: email, anti-virus, websites (hosting), Salesforce, Amazon Web Services, Google Apps, Gmail, Hosted PBX, conferencing (GoToMeeting, Webex), Skype - are all examples of cloud applications.

The three things driving the cloud trend: ubiquious broadband, the economy, and the fast paced technology space. The economy means that companies have to do more with less (less people and less money). It means that there is cost cutting. Broadband is available in most places - DSL, cable modem, 3G, 4G, WiMax, LTE, satellite, wi-fi. This means you can get access to your data and apps (Gmail, Google Apps, Dropbox, whatever) from any where. Finally, the technology is changing so fast that by the time you install it, the tech is probably almost obsolete. Cloud apps means that you lessen CAPEX and upgrades (like with Microsoft software) are taken care of my the service provider.

There's revenue here. Either you be the one to have the conversation with your customers or someone else will. And they will get those commodity services like broadband, T1 and PRI after they get the cloud services.

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.

Alteva Acquired by WVT

2011-07-15T03:02:28Z

Warwick Valley Telephone announced that it is acquiring Hosted UC firm out of Philadelphis, Alteva for cash and stock valued at $17 million - $10M upfront. "At closing the Company will enter into employment agreements with certain of Alteva's key employees." WVT is going to integrate Alteva into its CLEC operation, US Datanet. Alteva is the second Broadsoft client in M&A activity announced this month.

"Pursuant to the Agreement, upon closing, the Company will purchase substantially all of the assets of Alteva, except for Alteva's employee benefit plans, organizational documents and insurance policies. The Company will only assume certain of Alteva's liabilities, including certain of its contracts, debt owed under specified capital leases and certain accounts payable."

It's ironic that telcos are buying into Cloud at the same time that they are also killing the Cloud. How are they killing the cloud? "The problem is that with cloud-based services being more consumer orientated, those bandwidth caps are proving to be useless. High bandwidth will apply to everyone, even if they are not file-sharing." I know that this is a B2B deal, but with all the home workers, tele-workers, solopreneurs, and SOHO, a lot of Cloud apps are accessed via consumer broadband and cellular -- both metered. Should be fun to watch those 2 things smash into each other.

4 Notes About CRM

2011-07-06T22:50:22Z

I get asked often about CRM systems for sales teams. (I should I train salespeople and help hire salespeople.) Here are a few thoughts about CRM.

One, it's only effective if the sales team actually uses it. Most sales stars are too busy selling to fill out forms completely, do their paperwork, or enter data in CRM -- unless you tie to their compensation. But do you want to force an otherwise productive sales star to paperwork and data entry? Or do you want her out selling more?

Two, CRM offers management a way to see sales activity. This is important for a couple of reasons: to know what is in the funnel; to know what may be installing (workflow scheduling, financial forecasting); and to know what is disconnecting (forecasting and cash flow).

Three, CRM for tele-sales should make the process smoother. Many Hosted VoIP systems integrate with CRM applications to make dialing, customer history, and note taking easier. It's up to the salesperson or Customer service rep to mentally accept this concept, so it doesn't become a source of aggravation.

Four, there are wide number of CRM applications out there (I list 10 CRM applications below). They are not interchangeable. Some do things better than other. Some don't.

Here are 10 CRM Applications:

Salesforce.com - at $2B in revenue it has to make the top of the list.
Microsoft Dynamics CRM - a shout out to my MVP pals in Florida!
NetSuite - competes with the Big Boys above.
SugarCRM - open-source and clunky but there are professional SAAS editions available. LotusLive and Social CRM integration.
Zoho CRM - lots of integration.
RightNow - Gartner Magic Quadrant choice (with FB integration).
BatchBook - which now just tags itself as Social CRM.
Hirerise by 37Signals.
The name says it all: Free CRM.
This is called a Sales Lyfecycle tool: Landslide.

When I first heard about Landslide from my business coach, Keith Rosen, it was a CRM application that was not only cloud based (or SAAS), but it had an available assistant that the sales team could call to input data and get information read back to them, like contact or appointment info. That was the part I thought would launch it - for busy (or lazy) salespeople. The company blog isn't just about the company; it's about ways to sell. (This post is an example about sales tools for a sales tool.)

At the end of the day, CRM is supposed to be a tool. It can automate some of the sales and marketing activities. It's a task list. It's a database of interactions with the customer. If embraced, CRM can make sales easier both for retention, upselling, cross-selling and acquisition. Are you using any type of CRM?

TDCloud Joins the Fray

2011-05-19T19:37:48Z

We have seen the hardware distributors moving into the cloud space. We saw that SYNNEX launched Cloud SolvUC as a unified communications play. According to the PR, the first nationwide cloud UC product. Umm, just from that marketing spin alone, I would suspect that SYNNEX did not have its finger on the pulse of this space.

Like voice agents moving to IP and hardware VAR's struggling to become MSP's, distributors moving to cloud services is heavy on hype and thin on details.

Ingram Micro has gone cloud and today Tech Data announced TDCloud. The interesting thing about the TDCloud is how closely it resembles IBM's cloud strategy. Could be because they are a partner.

Ingram, TD and SYNNEX are used to managing gear and licenses. Now they have to take on monthly billing, which will include lots of accounts receivable and probably billing issues.

Also, how does a warehouse and logistics company deliver on cloud computing services, especially something like UC? There is probably a third-party behind the curtain, much the way Broadsoft's BroadCloud services are mainly resells of a video conferencing service and the like. (By the way, how do you profit in this scenario? UC-company+Distributor+VAR-or-ITSP-or-MSP+customer? Seems like a lot of middle men.)

For VAR's or Agents to start selling Cloud, we need more transparency. We need to know what's under the hood. We also need a Value Proposition, because without a Brand in the marketplace (like Amazon, Rackspace or Google), how do you get the customer's trust on an unknown brand and service? UC is convoluted and no two companies define it the same way. The on-boarding of a UC customer is a challenge. If the UC Provider goes up in smoke -- and some will because there are just too many of them -- what happens to the VAR/MSP/Agent's customer? And his business reputation?

We need details to feel comfortable selling it. Time and again I have discussed the UC components that can be used to provide that solution - email, collab, VoIP, chat, presence, video, conferencing, text and now social media elements. You will need a provider who understands that and let's you configure and sell it the way each customer wants to buy it or needs it configured. XO distribute through TD, offers the UC components and wasn't even mentioned. Ah, pay-for-play models.

Let's look at one more element. Most VAR's stop at the Router. Most Agents stop at the router - just from opposite sides. Cloud services requires LAN, WAN, IT and telephony to all be on the same page. It requires Internet Access to get to the various apps in the cloud.

It will be interesting to see how this shakes out, but remember that Cisco didn't set any sales records for Webex and that's the perfect analogy: how does a hardware company and its Channel suddenly sell services? We aren't all IBM and they took years to get to the services business.

The Inexpensive Cloud

2011-04-21T14:20:11Z

Image via Wikipedia

Amazon Web Services including EC2 is down today. When Gmail has any failure my twitter stream goes nuts. Facebook collapses often.

There is one thing people should keep in mind: Building Resiliency and Survivability into a Cloud Platform is not cheap.

For Agents, used to selling TDM with five nines reliability, moving to VoIP with less than that will be a shock, especially when they find out after the first outage.

For VAR's, who have been running their own servers, and like visitors to Vegas who tell me they are up money, will tell you about never having any down time, moving customers to the Cloud, where you lack control and transparency, will be unsettling.

Everything breaks or burns out - that's the nature of commodities (and servers, power supplies, hard drives and NIC's ARE commodities). Outages will occur. The Cloud Provider has to provide updates (honest updates) - and the Channel will need to communicate with the customer. It will just be a shock the first time.

Let's just say that a cloud provider doing less than $8M in revenue is not going to have the finance or propensity to design in high-tech security, survivability, and resiliency, because it will be just too expensive. (This might explain why the finance industry is taking slow steps toward cloud use).

Let me explain. Security is a full-time job. Administering password management is just one aspect. The network gear is expensive - IDS, firewall, router, switch, etc. And in redundancy?! Twice or four times as expensive. (Two per data center as a back up and two data centers equals 4.) Add monitoring all those parts. Then securing the data, encrypting it, backing it up, off-site storage, etc. Not only expensive, but a challenge to manage.

And for Cloud Communications providers, dual data centers is more expensive when you consider that the softswitch is $250K and rides on a blade server (x2 for redundancy at each data center). Plus other gear like SBC's which aren't cheap either.

Even Google and Amazon can't keep everything up and running. Even these two don't have enough survivability and failover built-in to takeover after an outage.

This will be a problem for Agents selling Cloud. Agents and Customers will have to come to grips with the fact that the Era of Five-9's is ending. Luckily, consumers are so used to dropped calls and other glitches on the Internet, that perhaps this will lighten the blow. (Much like how inferior cellphone call quality allowed VoIP to take hold).

A Failure to Communicate

2011-04-06T18:01:07Z

In the Agent space, many non-telco vendors (like Conferencing and Hosted PBX providers) have tried to get traction. Sales traction from this independent sales force. It isn't going well.

Agents (and VAR's) spend about 80-99% of the work week in the comfort zone. That is, doing what they have always done. Selling what they have always sold. Selling the same way they always have.

Growth only happens in the Dis-Comfort Zone.

So providers have asked to co-market to the VAR or Agent client base. Maybe that happens one time. Maybe the results are "not worth it". So it doesn't happen again.

What's the Problem?

Well, Marketing requires Repetition - Not One and Done. There are 4 factors for marketing: list, headline, offer and repeat.

It could be that the Value Proposition for the new service (could be conferencing, data backup, efax or whatever) doesn't resonate with many of the targets.

One problem with Cloud is that it's too generic. It needs to be sold as a package aimed at a set vertical. For example, a premium Dental Office Bundle of DSL, 3G, mobile, credit card processing, data backup, EMR, dental practice management, invoicing system and payroll which ends up being a Dental Office in a Box.

That is easier to wrap your head around as both an Agent and a Customer.

Take Retail. Legacy New Edge Networks (now EarthLink Business) was very good at selling to Retail on its branding of PCI Compliance. The VAR or Agent can reduce churn and increase residuals if they sold a package of other services down that pipe. Attached to the NEN AX Platform are companies offering payroll, Hosted PBX and more. (I'm not sure how Agents make money on that, but it is a private connection via MPLS to the AX Platform.

What if payroll, Network DVR, a point-of-sale system, credit card processing, web conferencing, email, Blackberry service were added to the MPLS service along with 3G backup and cell phone service? The client gets one stop service for all its business application needs; the carrier gets a sticky customer with big ARPU (even though a percentage of it goes to partner companies); and the Agent or VAR gets paid on a bigger ARPU.

Plus now the Agent and VAR understand how Cloud and Apps and SaaS can affect a sale and a customer relationship. Something that has been disconnected before.

Next you have Unified Communications which has a similar disconnect for Agents and VAR's. Agents used to selling T1's and Ethernet and VAR's selling switches and servers don't have any of the UC components on their radar.

In this webinar with XO about the UC Sandbox, we talk about how UC is just a bunch of components to help any company communicate with employees, customers, prospects, partners and vendors. For UC sales to take off, the idea of the UC Sandbox has to get granular with very specific examples.

We will need case studies in print, podcast and video that are short but concrete about how a jewelry story benefited from UC and specifically what parts. Or how an auto dealership utilized UC to sell more cars or more efficiently scheduled repairs.

In the grand scheme, providers have to do a better job of being concrete with a value proposition and a specific case for both the indirect channel and the marketplace to embrace both Cloud and UC. All too often, I get pitched with a bunch of mumbo-jumbo that is either all about the company or a string of buzz words. Neither of those pitches explain what the benefit is; what the value play is; who would buy it; why would they buy; what pain does it solve. It is this failure to communicate these necessities that is causing a disconnect in sales.

One Quick Note About Cloud

2011-04-05T18:44:31Z

I keep reading all these projections for Cloud and I have to wonder: Has everyone forgotten that a good portion of this used to be Hosting? Shared Hosting; Managed Hosting; Dedicated Server; Collocation; Digital Hands. This isn't new. Plus it isn't like RackSpace doesn't door knock to see if a business has a server to move to their data center. So there is going to be plenty of growth in Cloud.

Remember that SAAS is everywhere; best example is email. It's QuickBooks online. It's e-filing to state and federal apps. Everywhere. We just never called it that before.

Stephanie Mosca wrote an article today about the growth of enterprise mobility and many other segments like all kinds of conferencing, cloud comm and collab (UC 2). Of course, there is growth in these sectors because a couple of years ago, sales were slim to none. So I get the media buzz about the growth, but let's keep in mind that 35% of $1 million in sales isn't moving the multi-trillion dollar IT or telco needle much.

But all this media buzz and ground breaking growth means get onboard NOW! Learn as much as you can and look for opportunities. This segment will only grow.

IBM's New(er) Strategies

2011-03-29T04:17:56Z

Image via Wikipedia

At IBM's Lotusphere this year (Feb. 1), IBM rolled out strategies for Cloud and Social Media.

IBM identified 5 ways that partners could benefit from the Cloud. They are as follows:

Cloud Application Providers - deliver business apps via a subscription model through the cloud such as SAAS
Cloud Builders - design, build and manage clients’ cloud needs, typically integrating with existing infrastructure.
Cloud Infrastructure Providers - provide a public cloud infrastructure or Platform as a Service (PaaS) on which app can be hosted.
Cloud Services Solution Providers - resell multiple public cloud services and offer complementary services such as training and integration.
Cloud Technology Providers - provide the tools, services, and technologies, such as cloud management, billing metering and monitoring — that help clients use the cloud more effectively.

These are ways for VAR's to stay in the business of providing applications and associated services.

According to some PR sent my way, " IBM is the largest consumer of social technologies. As a company, IBM takes social networking seriously - to develop products and services, to enable sellers to find and stay connected with clients, to train the next generation of leaders, and to build awareness of Smarter Planet among clients, influencers and other communities. IBM will showcase how it is poised to help clients exploit this transformation of a social business delivering new software, services and skills resources to help organizations adopt best practices, policies and software to transform their businesses, including: (1) New Cloud software and services that delivers a cloud-based office productivity suite; (2) New software to help companies and governments socially enable their business processes using the most successful mobile devices, including tablets, such as the iPad, iPhone, Google Android, RIM's Blackberry and Nokia devices."

See how they worked Cloud and social networking into that press release? Google Juice!

"IBM intends to offer a cloud-based version of LotusLive Symphony, an office productivity suite that will give organizations a social platform that enables them to simultaneously collaborate on documents in the cloud. LotusLive Symphony in the cloud complements IBM's on-premise, free of charge, office productivity suite, IBM Lotus Symphony." I didn't know IBM offered free office software.

In its collab suite, IBM will turn the inbox into the Activity Stream that feeds in twitter, LinkedIn, Facebook and SAP through the Social Business toolkit. (Yeah, it says SAP in the release.)

Meetrix is an IBM Partner that offers IBM's enterprise-class Sametime Server in the Cloud. "Combining Meetrix with Broadworks Connector provides unique capability for Broadworks operators to deliver a full featured, over the top Unified Communications and Collaboration (UC 2) offering to business-class customers." Simple Signal is using this service. Meetrix is the only partner for Hosted Lotus Sametime presently, which allows Meetrix to offer "businesses access to enterprise-class UCC features such as instant messaging, chat, presence, awareness, document and presentation storage and sharing, audio and video, web conferencing and e-signature capabilities through SAAS." Note: digital e-Signature. [pr]

I'm guessing that this will compete against Microsoft Linc. I'm also guessing that the marketing and branding of this will take some time, which they don't have. The key may be the Activity Box and the digital e-Signature capabilities. At least, that's what I would be featuring in my marketing. It should be interesting to see, especially if other Broadsoft CLEC's jump on that wagon.

How Important is Retention?

2011-02-27T16:06:35Z

For service providers who understand the cost of customer acquisition, retention is an important metric. In fact, Wall Street calls it churn. It has to remain under 2% to be considered under control.

For agents, retention is just as important. While you may not have calculated what your customer acquisition costs are, do you want to lose a customer? I don't. It's far easier to sell to a customer (past or present) who trusts you and has history with you than to sell to a prospect that doesn't know you yet.

For agents, the retention problem surrounds contract renewals. Carriers have different policies. In a recent case, the contract renewal went to another agent. He had a better relationship with the new IT director. Kind of sucks since he is getting paid to do nothing but renew the business I sold. That's what carriers think too. Why are we paying on renewals?

I've had my focus on other business needs and it cost me a couple thousand per month. I don't have a system in place. And as Karin Fields of Microcorp writes on her blog:

"Who would think there are so many things to consider with trying to maintain the base you already have? But that is EXACTLY the problem most Agents have is understanding and managing the complexity of retention. You have to consider the Carrier's policies; you have to develop a tracking system if you don't have access to a system like Nautilus; and you have to have a pro-active way to interact with your customers to maximize your efforts. And that is what I want to talk about today - the Yearly Review."

Today, a yearly (or even a quarterly) review would be wise simply to gain more Total Telecom Spend. With SAAS, conferencing, and energy, there are questions you can ask to get new business (even if you lose old business).

Security is another angle. Design a couple of questions to see if a managed security service (like firewall or IDS) would be something for the client to look at. If the questions are creative enough, it will have the client looking at you in a new light. (Hopefully, a greener light.)

And with Cloud, you can have a conversation about collocation, email, critical business process applications, and more to identify ways that your clients can leverage services you can deliver.

Easy to say. A challenge to implement. (Maybe it will be a TCA webinar topic in 2011). How do you implement a retention system?