On Rad's Radar? - sip trunking Archives

Interesting Links for Your Consideration

2013-05-14T17:11:47Z

There have been some interesting articles lately. I can't get to all of them, but here are some good reads.

Death of the Telecom VAR in 2013 - How an entire sub-industry will be wiped out in the next 24 months by Jeff Hawkes. "Traditional telecom VARs or value-added reseller businesses- those that derive the majority of their revenue from the sale of on-premise PBX equipment to business customers- have ridden one of the longest product life cycle waves in recent technological history and combined with an emerging threat from hosted phone providers and a professional background that leaves most ill-prepared to run a business larger than a few employees is threatening to wipe-out or dramatically alter an entire sub-industry in the next 24 months." He writes like me.

Not telecom - but patent law - Monsanto wins a big case. "The court ruled unanimously that an Indiana farmer violated Monsanto's patent on genetically modified soybeans when he culled some from a grain elevator and used them to replant his own crop in future years."

Infonetics scores Comcast, Verizon, 8x8 and XO top North American business VoIP providers. SIP Trunking is the big winner. Revenues are the big loser as SIP trunk is used as a low price dial-tone replacement.

Blair Pleasant is "still not convinced that the cloud is the long-term panacea."

Doug Mahoney reports that HD Voice is Experiencing Unprecedented Growth globally.

YorkTel's VideoCloud integrates with Microsoft. So I wonder how Skype feels about that.

lastly....

The Cash Cow is Dying: Mobile Networks Face Bleak Future (based on SMS and LD revenue). Lucky for cellcos that Metaswitch just released Clearwater, an IMS implant.

The VoIP Market Right Now

2013-04-29T19:14:00Z

"The market for VoIP services has moved well beyond the early adopter stage to mainstream status in many developed countries. SIP trunking and hosted UC continue to heat things up, fueling growth," reports Diane Myers, principal analyst for VoIP, UC, and IMS at Infonetics Research.

According to the study, "Due to continued demand for enterprise cloud-based services, hosted VoIP and Unified Communications (UC) services revenue grew 17% in 2012 from 2011, the most of any segment."

The reality is that SIP Trunking jumped 83% because VoIP is a cheap dial-tone replacement. Replacing PRI's and other voice circuits (POTS, Integrated T1) is the easiest way to ink a deal - we will save you money! Unfortunately, it is also lowering overall revenues.

Premise based systems are not going away any time soon. "Managed IP PBX services, which focus on dedicated enterprise systems, remain the largest business VoIP services segment, and sales grew 9% in 2012."

Dimension Data and Ovum performed a study on UC&C, "Currently, the US results are in broad accord with our global results: most UCC deployments remain premise-based and are managed in-house. However, US respondents are keenly interested in the managed services model for UCC, in which the technology is based on-premises, but is managed by a trusted provider. Strong interest in managed services indicates a shift from the traditional US 'do-it-yourself' approach to enterprise networking and communications. US firms also expressed more willingness to seriously consider the public cloud as a UCC delivery mechanism than their global peers."

Premise is still selling.

It's About Stats and Studies

2012-12-04T16:34:50Z

Here is a collection of some stats and studies for your reading pleasure.

(1)

Mary Meeker's 2012 Presentation On The State Of The Web is a good read despite being heavily mobile. She spends quite a few slides pointing out how SO many industries have been disrupted side-swiped by technology, especially Internet enabled apps.

(2)

"The worldwide Ethernet switch market, which had grown in large part due to the adoption of 10 Gigabit Ethernet technology in the data center, contracted in the third quarter, with revenue dropping 4.4 percent, according to analysts with IDC." [eweek]

(3)

Survey Finds 'Death of the Landline' as Most Disruptive Force to US-based Communication Services. I would have to agree. That copper plant impacts a lot of telecom.

(4)

"According to a recent market study made by Infonetics Research, the third quarter of 2012 saw a few positive changes in the leading business PBX telephony systems. Cisco was found to be the leading PBX business phone system vendor (for the 5th straight quarter), followed closely behind by Avaya." [source]

"the high roller in the Unified Comminications (UC) market is Mcrosoft, with a rise in revenues of approximately 40% over second quarter profits." You have to read it carefully. It's just about revenue growth. Diane Myers continues: “UC applications have been a real sweet spot. The demand for tools that aid employee productivity and flexibility is fueling growth in this segment, and Microsoft’s Lync has been the primary beneficiary, enjoying over 40% sequential growth in the third quarter.”

"Revenue is declining at a faster rate than shipments: for the first time, the average revenue per PBX line slipped below $200." This is globally in the whole IP-PBX space.

(5)

Frost & Sullivan's new report "North American VoIP Access and SIP Trunking Services Market 2012: Broader Market Acceptance Drives Robust Growth" to their offering. This couldn't be more obvious. SIP Trunking and VoIP are growing. No kidding. The PSTN is closing and copper is clipping. Cable Voice is all VoIP, even the PRI's. Try to buy a TDM PRI sometime, Frost & Sullivan. Oh, and there was consolidation in this space in 2011. See what I mean?

(6)

Garrett Smith on the video conferencing market.

(7)

Lastly, a beautiful infographic from GigaOm on the state of the US Broadband market!

Where's Your Special Sauce?

2012-10-17T14:22:56Z

Just saw a blog post about a company rolling out SIP Trunking to meet the market demand for low cost dial-tone. Really? Hasn't that been done? Over and over and over by so many companies?

I get the market wants to lower prices, but it also means lower margin. I also get that your "sales" efforts are easier with low price, but order taking only works if you are the lowest price and beat the current provider by 20% (according to studies). So can you do that? Can you scale it? Low price doesn't work with a couple of hundred customers.

Today, every telecom company offers SIP trunks in one form or another. How about adding Special Sauce to that? The Big Mac is just a double cheeseburger without the special sauce. How will you add something of value that will make your SIP offering different, stand out, special or even remarkable? Why can't you shoot for that instead of low price?

Want an example? Here.

The other factor in SIP Trunks is interoperability. Can you inter-op with enough models of PBX? Do you have a list? Are you supporting HD Voice? Do you bypass the TDM tandems in order to provide end-to-end IP service for Fax over IP and HD Voice?

Then there is the other side of this low price: Quality and Reliability. At low price, there is no way you can be geographically redundant. We have seen low priced VoIP before - it sounds like a tin can.

I just can't understand this industry's obsession with low price. It is so lazy.

Do you think you can deliver SIP trunks cheaper, faster and of better quality than Cable?

Some Moves That May Seem Like News

2012-10-02T04:17:34Z

Who is going 100G? Both XO and Spread Networks announced its deployment of 100G technology. The surprise? Bright House Networks announced that it will extend its relationship with Fujitsu and utilize that vendor for 100G in its metro network.

Comcast is going after E-Rate business - through the channel! They will be trying to hit the ILEC's in the breadbasket with this move. The RBOCs are most vulnerable here since neither ATT nor VZ allow agents to sell e-rate.

Comcast hits its 20th state with Business VoiceEdge, its Broadsoft based cloud-based voice and unified communications solution, in California. Competitors need to pay attention, since Comcast sells inexpensive Hosted PBX on its own network -- read No QoS issues!

TelePacific has made its SmartVoice PRI, SIP and business-line services available on a nationwide basis.

EarthLink already has an MVNO deal with Sprint from Deltacom. Now ELNK has a wholesale agreement with Clearwire for "high-speed fixed and mobile broadband service to consumers."

FairPoint taps marketing exec Barbara Dondiego as new CMO. Not picking on Dondiego - and don't know her - but she hasn't worked at any successful telcos - DeltaCom, WilTel, and MacLeod - so BK or bought.

MetTel hits 100K seats of Broadsoft. This makes them 5th by my calculations: Comcast has about 300K; 8x8 has about 210K; M5/Shoretel Sky has about 140K; and West IP has about 100K approximately.

TiVo settled with VZ for $250M over patent dispute over DVR software. VZ TV is now at 4.5 million subs - and will pay monthly licensing fees for those subs to TiVo. VZ also "agreed to pay CloudTV developer ActiveVideo more than $260 million over the video-on-demand feature." This has something to do with the VZ-Redbox video streaming lab test.

6 SEO Myths by INC

Larry Lisser is prepping for another awesome StartupCamp Comms at ITEXPO this week, but still put out a blog post. Note that Evolve IP bought IPiphany and Nuance scooped up Ditech - for the Phonetag service.

Twilio has new money and a new CMO. Oh, and a deal with ATT.

More Agents Getting Certified

2012-09-25T17:54:25Z

The Technology Channel Association has announced hitting two milestones: over 500 members and 200 members registered for the Certified Telecom Professional certification program. Those that have passed are listed on a special page. Why? Pride in being an Agent who takes this business seriously.

CompTIA has many certificates including a cloud one. Other organizations are putting together certificate programs - some for revenue, some because it will take a lot of education to move the needle on cloud revenue sold via the channel.

One of the reason for the need for certification is the change in telecom. For years, telecom was TDM. A PRI was a PRI, a standard with just two configurations available. Everyone knew what they were getting. Today, it is a miss-mash of TDM and IP - and a lot of grey area in the middle. If you are running a fax server, for example, a PRI that is actually a SIP Trunk with PRI signaling in the IAD is just not going to cut it. Some companies don't even know that is what they are delivering until it is turned up - and doesn't work! Then the real mess begins.

SLA's are all over the map, but are a feature that appear on many RFP's.

Certificates are about education. A certified professional is someone who takes pride in his (or her) business and understands that it takes ongoing education to do the job well.

Selling VoIP and UC via Channel Partners

2012-09-21T21:38:05Z

One of my ITEXPO panels is on 2 PM on Thursday about Selling VoIP and UC via Channel Partners with Chad Krantz from Broadvox; Joel Maloff from Phone.com; and Joe Schurman from Evangelyze Communications.

VoIP services are clearly in the process of replacing traditional TDM and LEC services, yet the sales approach may be very different. This session will focus on the sales of VoIP services via indirect channels such as sales agents and partners. It will also differentiate between selling to larger or smaller organizations as well as sales of complete unified communications solutions, SIP trunking, and hosted PBX. The target audiences will include prospective sales partners as well as service providers looking to enhance their market distribution models.

The Alternate to Cloud

2012-08-15T20:09:00Z

For Agents that just don't want to go cloud, there are some alternatives. In my latest book, SELLECOM 2: Selling Cloud Services, there are a few products that Agents can sell that still fall inside the Replacement services umbrella. T1, broadband, cellular, voice are all replacement services for the transactional agent. That road is bumpy. It won't take much for you to make some extra revenue.

One way is SIP Trunking. Everyone offers it. Find someone you like and trust and sell that, although if you are reading this blog, you probably are selling SIP Trunking already.

Next up is Conferencing. Web, audio and video conferencing are coming of age. Most companies use some kind of conferencing, you just have to get in the habit of asking about it. It's as easy as asking them if they use Webex. Then go into your pitch about quoting them a cheaper rate. You will see a couple of conferencing companies with booths at CPExpo in Orlando in 3 weeks.

Another easy one is efax. If you are selling VoIP, what do your customers do about faxing? One answer is efax from you.

One more quick one for your customers is email. Hosted MS Exchange, Blackberry Enterprise Server, Office 365, Zimbra, Zoho and Google Apps are all answers to the email question. Almost all of them pay you a commission through a vendor. (Google doesn't.) Zoho just rolled out email marketing into their suite of services. J2 bought Landslide.com to create CRM with email marketing. J2 also sells efax. Faxbetter.com is owned by my pal and is always looking for partners to sell 50+ numbers. The efax and email space are a nice little sale that will make you money.

Now to hit two bigger options that may be considered SAAS, but them conferencing, efax and email are all cloud services too. Just most folks don't look at it that way.

Telecom Expense Management is finely coming into its own. Many master agencies - like PARTNERIQ by TBI, INSITE from Microcorp - are offering TEM. Your typical medium sized business problem has more than one contract for telecom. Multi-location businesses have a number of circuits at each location. TEM allows for the centralization and organization of billing and contract data. If you sell it, you end up being the outside telecom department for that business. Isn't that what you want? That's always been my goal.

The final thought for Agents is MDM, mobile device management. There are so many reasons to offer MDM. "One laptop is stolen every 53 seconds! 70 million smartphones are lost each year, with only 7 percent recovered."

"MDM is in essence software that secures, monitors, manages and supports mobile devices deployed across mobile operators, service providers and enterprises and its s main objective is to provide a high level of security on a mobile communications network, while supporting multiple devices and continuing to reduce cost and downtime," writes TMCnet. TDMobility and MetTel are just a couple of vendors that offer agents and VAR's the MDM service to sell.

TEM and MDM offer "a complete view of customer spend, billing; Inventory and trouble ticket management." They are a way for you to differentiate yourself from other agents and other sales teams, while increasing your own profitability per account.

We hear a lot of talk about cloud - and technically these are cloud too - but you have to add to the catalog of services you offer today to become a trusted advisor. TEM and MDM are just two ways to have a value based conversation with your customers.

Masergy Buys Broadcore

2012-07-10T17:18:58Z

I knew Broadcore was in play, just like many of the Cloud Communications Alliance members. Masergy has a strategy to be more than an MPLS reseller. Picking up Broadcore gives Masergy

"Demand for business-class cloud communications is growing at a rapid pace. Infonetics reported that revenue from hosted PBX and UC services grew by 33% last year and SIP trunking revenue grew by 128%. Further, the number of seats for hosted business VoIP and unified communications services are expected to more than double over the next four years," the Masergy press statement reported. (see more about the Hosted PBX Market here)

"Broadcore will continue to operate as it does today, but as a wholly-owned subsidiary of Masergy. The Broadcore service platform will be directly embedded into Masergy's global MPLS network platform, which was purpose-built to deliver real-time applications like Broadcore's voice, video and mobility offerings."

Masergy kind of has to add some services because the dumb pipe model - even MPLS - is falling apart. Transport only works when you have an exclusive route or the fastest route. Otherwise just transport is a commodity that is price shopped online - or through an agent.

This reminds me of Qwest buying US West in 2000. Qwest needed revenue and traffic to fill its pipes. Hence, buying the ILEC. Masergy had a similar problem: transport in need of some services. And most likely many MPLS customers are utilizing either SIP trunking or Hosted PBX. It might as well come on the same bill.

This won't be the last merger in 2012 - that's for certain.

Rumor has it that one ILEC isn't done acquiring and T-Mobile may be a target.

Broadsoft Enhances Trunking

2012-06-13T03:58:34Z

Besides the stock price changing, Broadsoft is enhancing SIP trunking.

"BroadSoft, Inc. has announced the release of an enhanced SIP trunking solution, enabling service providers to add unified communications and mobile applications to their SIP trunking offering with speed and ease. With it, service providers can increase the value of their SIP trunks and improve their Average Revenue Per User (ARPU)." [UCSttrategies]

I wonder if they are enhancing SIP licensing as well. One of the big issues for Broadsoft based service providers is the licensing fees, especially the maintenance payments on unused licenses. For service providers with 25K licenses and only 12,500 seats, they are effectively paying a double fee for those active licenses. Hurts profitability.

With Hosted PBX revenue at roughly $500M (as estimated by Insight Research Corp.), this market has not grown like so many analysts had predicted. As Razorsight writes, "That is far less revenue than many had been predicting would be the case by now. "The hosted PBX/VoIP service providers had only garnered less than 4% of the small business lines (seats) as of year end 2010," Insight Research says... such forecasts suggest the hosted IP telephony market will not be bigger than the original "Centrex" business."

VoIP revenue is not anywhere near TDM revenue or wireless revenue. VoIP is mostly sold on price - SIP Trunking, consumer voice (Vonage, Magicjack), and even Hosted PBX. So the revenue is always going to be less than TDM and certainly less than cellular (even though that is VoIP too). That means margins are going to be less than in TDM.

There is an interesting prediction by The INSIGHT Research Corporation that states, "Over the next five years, all of the major US telcos and cable TV MSOs are expected to lose small business customers to a new crop of hosted service providers that will offer PBX-like voice services at lower reccurring costs and with minimal site equipment expense." This means that POTS lines and SIP circuits (digital voice lines that MSO's deliver over cable) will be subject to replacement by not just cell phones but some type of Hosted VoIP service. If you listen to some, the softphone on devices like the iPad will replace not just phone lines but handsets as well. To what degree? Maybe INSIGHT says in the study. i don't know. But this will be very low margin revenue, because in triple play bundles, the voice service costs about $15.

So what is this blog post about? How much longer will Broadsoft based providers continue to pay the licensing ~~tax~~ fee? On top of that, since Broadsoft already boasts over 400 providers and Metasswitch has most of the rest, there won't be many more softswitches sold. That means that most (if not all) of Broadsoft's future revenue will need to come from licensing and maintenance. Being public, BSFT will eventually have to raise the costs of maintenance to service providers to continue to fund research, fixes, etc. (Factor in consolidation and going out of business sales and that means even less sales.) Broadsoft may be te next Nortel. It certainly looks like Coppercom.

When one of the biggest independent Hosted PBX providers, M5 Networks, moves off the Broadsoft owned platform (M6) to its own switch, that doesn't bode well for the future. Since there isn't a roadmap for M6 Skinny migration to BroadWorks (without a forklift and a lot of tears), what happens next?

It's a solid platform. It scales. It's the licensing and business model that are the hurdles.

Just something to think about.

What is the Value Prop of VoIP?

2012-04-16T20:51:05Z

"It is happening and no one seems interested in stopping it - that hosted voice services are rapidly becoming a commodity service," Dave Michels

"According to the Telecommunications Industry Association, wireless has become the preferred voice-services option. Wireless revenue in 2012 is forecast at $335 billion, while all other forms of fixed network voice revenue will only total $176 billion ($132 billion for wireline, $38 billion for broadband access and $6 billion in cable/television revenue)," blogs David Byrd of Broadvox.

Those are interesting numbers. And there is more interesting numbers when you look at VoIP.

"Zeus Kerravala estimates penetration [of SIP Trunking] is right around 5% in the United States," reports Razorsight. Just 5%! The blog continues with: "In some cases, it is argued, SIP trunks do not save money." This statement flies in the face of an imperative in our industry. If a SIP Trunk isn't saving money, why not sell and install a TDM PRI that has known stability and quality? This would certainly be the reverse of where the Industry is heading: all IP. But if we are heading all IP in a move to save money - more for the carriers than the customers, I think - and SIP Trunks are not a big cost savings, where does that leave the sales proposition?

According to Insight Research, Hosted PBX is about $500M now. That's not a lot. I figure with 1000 service providers running around yelling "I'll save you money" while cutting pricing to close any deal, that figure would have to be greater than $1B.

Revenue is dipping in everything - GigE ports in a data center, T1's, MPLS, DIA, broadband. The only rates going up are cellular and TV.

Scary stat: "In 2010, operators made on average only $13.21 per user per year from mobile VoIP services."

There are reasons that the Hosted PBX revenue is small: VoIP is sold as cheaper than TDM, so on the conversion from TDM to VoIP the bill declines. Also, there is no way to accurately report the Hosted PBX industry with its 1000+ providers out there with everything from an Asterisk box to a Broadsoft suite. Also, switched voice traffic is migrating to other avenues like chat, IM, SMS, and cellular. That's why Unified Messaging and Hosted UC should be huge - but sadly are not.

One reason is that the sales pitch has been so loud for so long on I Will Save You Money that we have trained the marketplace to buy it that way. Sure, you can blame the Agents and the Direct Sales folks, but at the end of the day -- going back to the pin drop in 1986, we have been working on giving away margin and revenue. Oh and neglecting Value.

"The cable industry, without a doubt, is the main purveyor of VoIP in the United States. An industry strategy is to bundle video, VoIP voice and data. The approach is to offer a good deal on the three services....The bundling strategy has served cable operators well and has been embraced by telephone companies," reports Carl Weinschenk. This bundling has even resulted in a Price War. Again no Value, just commodity price shopping.

The thing about VoIP that most companies don't get is that it is just an app - Google Talk or any chat app that adds voice; gaming consoles that let you chat with your peers; Skype; MagicJack; mobile apps on your cellphone; audio conferencing; and now Hosted PBX. The Value of VoIP is that it can be attached to other apps like email or a computer we call a PBX or on another computer we call an IP Phone. The Value isn't in the dial-tone. The Value is in how it is applied and used.

Hosted PBX (and its complicated cousin, Hosted UC) take VoIP to a different level. Therein lies the problem though. Now it's tougher to sell!

The value of VoIP is in a click-to-call button or a Speak Live app on your website that converts prospects into customers.

The value in VoIP is allowing the medical office scheduling to be completed by the computer and not a human to save time, be efficient and let the office manager do other tasks.

With debt piling up and revenue waning, it's time for the carriers to change the way they sell. It's time to sell on Value. It's also time to realize that Layer 7 of the OSI model - Apps - is where they break-away from the ILEC's.

I've written before about what EarthLink should do, about niche marketing and about bundling. No is listening yet. But I will keep trying to drive this point home.

Another way to look at it:

People would pay more for Voice if we would sell it in a non-traditional way. Stop selling it like a POTS line.

Look at what Jon Arnold writes, "Building off that base, [ShoreTel] understands the voice 2.0 value proposition - it's all about the applications and the experience - not just cheaper, reliable connectivity. With VoIP, dial tone quickly becomes a commodity, and their view is that high value applications are the best way to differentiate against low priced competitors. One example was their Live Answer demo - a simple cloud-based diagnostic tool that shows what percentage of calls is being answered live. This basic piece of information has inherent value not just in the contact center, but for any business where phone inquiries can lead to sales."

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.

Cbeyond 2.0

2012-02-27T20:40:02Z

Cbeyond laid off 200 employees last week. "The company said it is reducing its traditional entry level direct sales force by about half while building a new direct sales group dedicated to managing existing and new technology dependent customers."

In a message to agents today:

"Cbeyond is making some significant changes that are going to directly benefit their Agent Partners. They will be reducing their entry level sales force by 50% and redefining the roles of the existing team. They will also be providing agents with enhanced support systems and marketing, along with hiring channel-centric cloud sales engineers to help partners secure deals. Per Zane Long, VP Indirect Channel Sales, "... agents are a critical part of the team that will help us build what we are calling Cbeyond 2.0".

Cbeyond is going through changes. It no longer opens new metro areas for telecom and network servcies. This puts a bottleneck on revenue growth and employee satisfaction, because during the emergence of new metros, employees had opportunity for advancement. Now there's a bottleneck. These layoffs will create some more pressure for a CLEC that is essentially a sales and marketing arm. Sure, technically they did a good job with SIP Trunking, but other than that it has been a marketing machine. Now it is reinventing itself into a cloud services provider. "By the end of 2013, Cbeyond expects about 25 percent of revenues will be generated from its cloud-only customers and its customers who buy both network and cloud services." ARPU will be lower for cloud services, compared to telecom services, but the margins will be higher. Well, until next month when cloud becomes such a commodity that it becomes a bloody price war like VoIP.

Why SIP Trunking is Not a PRI

2012-02-21T18:11:07Z

"Integra Telecom has lab-certified the Fonality trixbox Community Edition (CE) IP PBX system to operate with its SIP Trunking service. The certification helps ensure interoperability and seamless operation between trixbox CE and Integra solutions" - see how specific that is? That's the difference between SIP trunking and PRI. PRI has 2 configurations on the switch. The NI-2 protocol was the primary configuration for RAS boxes and PRI cards on PBX boxes. National ISDN 2 is a standard.

SIP is made up of about 30 RFC's (or opinions if you will). So each carrier configures SIP differently. That's why for SIP trunks inter-operability is so important! Down to the model number.

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.