I know we are facing TDM sunset but from the looks of advertising from the likes of Birch and Bullseye, POTS is still alive and well - and profitable! POTS is still the reliable choice when it comes to voice lines for alarms, elevators and faxes.
For many scenarios, an on-premise PBX makes more sense than a haphazardly deployed Hosted VoIP scenario. Many a small business replaces POTS with SIP trunks to get mileage out of their aged key system. Switching to a new cloud PBX is not a viable option for some small offices because they don't want to change behavior. Hosted VoIP does a poor job on key system emulation despite years of partners selling it and providers trying to deliver it. It is one big face palm.
If PBX were indeed dead, wouldn't one of the leading UC companies have 1 million seats by now? Instead they are struggling to get to 700K seats.
The problem with UC is that it is mass market and it would be better off verticalized.
It would be better for all if Broadsoft wasn't competing directly with its own customers by selling direct to users at $15 per seat. That smells of desperation.
Someone asked me what I meant by that. Broadsoft selling direct cuts out their 400+ clients - like Vonage, TPX & Nextiva. Now these providers have to face price compression from their vendor. It's like ISPs and CLEcs who buy wholesale from ILECs and cablecos only to see retail rates are cheaper than their wholesale rates. Isn't that a crock?
BSFT can't add any more clients because every carrier on the planet has already picked a softswitch - BSFT, Meta, Netsapiens, or home brew. The only way to maintain revenue is to sell direct. BSFT isn't exactly raising the ocean or expanding the pie. They are just taking a big bite from the pie that their clients have been baking for 10+ years. Sure, everyone says that cloud comms is starting to take off; that it is hitting high adoption, but is it the UC we have seen or a bunch of variety?
Office 365, Cisco Spark, Dialpad, One Talk, Fuze, Shoretel, 8x8, RingCentral, Grasshopper, Mitel, Avaya, Jive, Intelepeer <- that is a lot of variety under the UC umbrella. With 2000+ providers of some form of UC in the US, even with an accelerated pace of adoption by users, will there be a clear winner soon? Probably not.
In fact, all these choices without a clear winner probably helps Microsoft more than anyone. When in doubt buy from the established.
There are factors: it isn't a replacement system so much as a change. Extra gear is required (POE switches, QoS Router). It isn't as reliable as POTS - and can't be used in all places POTS was. The call quality is often not clear (unless you put it up against cell phones). (It's why they are touting SD-WAN for UC). It isn't cheaper than POTS in many cases. The deployments are often messy. (Providers can barely turn up Internet Access without issues let alone something complicated like Hosted PBX.)
And finally it doesn't pay much in commissions. At $15 per seat and even a 20 seat deal, the MRR is $300. That is a big headache for $300 in billing revenue. Easier, faster and better to sell network still. Or POTS. Or on-premise PBX with higher compensation. 3CX has been doing everything to make a partner's business model sing.
This isn't me being a Pessimist. This is me being a Realist. This is just how it is in the street in many places.
I don't hear anyone hawking white glove service or money back guarantee or no headache install. I hear the talk of zero touch deployment. That's the wrong way to go except for the CFO who wants to maximize profit per contract. Customer experience is someone else's domain.
I don't hear anyone talking about their call quality, their customer experience, their hand holding on deployment, their world class PMO. These are better things to talk about than price and features.
]]>Level3 CEO and President Jeff Storey is poised to get a huge prize for selling the company off. Isn't that great? For him, yes. He gets a "$1.2 million bonus after the Broomfield-based telecom's $24 billion acquisition by CenturyLink Inc. closes. In addition to the $1.2 million bonus payout, Storey is slated to receive an accelerated stock grant worth $3 million after the transaction with Monroe, Louisiana-based CenturyLink." Agents, meanwhile, get to wonder what happens post merger. How messed up will the networks be? How convoluted will ordering and quoting be?
After both Transbeam and NITEL announced that they are adding SD-WAN, MegaPath launches SD-WAN aimed at the SMB. That is the same place that SimpleWAN plays. SimpleWAN is up for the 2017 Venture Madness business competition in Arizona.
Velocloud raised a series D round for $35M. Many startups will look at this (and the SNAP IPO yesterday at $26B) and think that doing a startup is like buying a lottery ticket. In a sense it is, but building a business -- even to sell it quick -- still requires hard work, execution of an idea AND a plan, and sales. Velocloud is signing up partner providers faster than a PR firm can add them, but that doesn't result in meaningful sales for a long while!
You can learn from failure. #startup stories.
In the heat of SD-WAN, I wonder if people realize how shaky Cisco (and other router manufacturers like Juniper and ADTRAN) are? The SD-WAN white box is not a Cisco. It is an OEM that can be a router, a firewall, an access point, a Cradlepoint, darn near anything because we just push the software update to the box and either install the card/WIC or activate the card/WIC. The white box is replacing the traditional gear. Cisco and ADTRAN are in the box business. So are VARs. What happens next? Pay close attention - it will be a lot like the PBX Business, but decline a little faster.
Satellite ISPs OneWeb and Intelsat are merging. Consolidation in every sector of the ISP market - MSO, ILEC and now sateliite.
Verizon wins top honors from Frost & Sullivan for capturing more than a quarter of the North American VoIP and SIP Trunking Services Market.
CenturyLink makes changes to its Alliances and Strategic Partnerships programs.
In the EarthLink-Windstream merger, the ELNK channel chief, Olen Scott. emerges as the new channel head. "Jason Dishon, Windstream's former channel chief, has left the company to pursue other opportunities." It is a constant state of musical chairs in telecom.
]]>
With less than 25% of businesses on VoIP according to TechNova Consulting, then there is still time to make them relevant again.
Meanwhile Verizon is asking the FCC for permission to shutter more legacy SS7 voice switches. The TDM to IP transition is marching on. Frame Relay and ATM are mothballed. Soon SS7 as we are used to will be. I wonder if 9-1-1 centers have caught up yet?
AT&T told the FCC that "AT&T is progressing with its TDM-to-IP voice service transition in two cities in Florida and Alabama, telling the FCC that on a combined basis 50% of total customer accounts have voluntarily migrated to one of the telco's next-gen wireline and wireless voice services." [source]
OTT communications is growing so wide that it is now being reported on by analysts! "The VoIP market (e.g., Microsoft Skype), the IP messaging market (e.g., WhatsApp), a portion of the social networking advertising market (e.g., Facebook), Unified Communications (e.g., Cisco) and Cloud communications markets (e.g., Twillio) make up the OTT communication market." [source]
Broadsoft has 38% of the global UC market with 15 million UC lines, but that isn't a significant portion of the global business voice market. The analysts have now estimated CAGR in UCaaS at just 10% (down from the 20+% they were cheerleading for a few years ago).
Riddle me this: If the IP transition is going so well, how is the growth so slow (<10%) and the market penetration so small (15M = 38% or <25% of biz) when there are so many VoIP Providers out there?
]]>The TMR report looks at these "Key players operating in the unified communications market across the globe": Avaya, Microsoft, Polycom, IBM, NEC, Cisco, Siemens Enterprise Comm., and Alcatel-Lucent. (I didn't know ALU was in UC.)
Now another "study by Hexa Research reveals that increasing enterprise and workforce mobility will be important factors leading global unified communications market to attain revenues of more than $75.50 billion by 2020."
Hexa suggests that "Rising penetration of smartphones will also augment demand for unified communication products. Many organizations, large and small, across the globe are encouraging practices such as Bring Your Own Device (BYOD), necessitating reliable unified communication solutions. "
"Hexa Research divides all unified communications products into on premise and cloud-based or hosted." The leading players in the global unified communications market include the same players as TMR but named Verizon also.
Frost & Sullivan agree with that addition, because F&S "recognizes Verizon Enterprise Solutions with the 2016 North American Frost & Sullivan Award for Market Leadership. The company garnered 25.1 percent of total market share." F&S combine all VoIP, even SIP trunking, under their UC market.
Yet another firm called Research and Markets put out a forecast. "The global UCaaS market size is would grow from USD 15.7 Billion in 2015 to USD 31.3 Billion by 2022, at a CAGR of 10.5% during the forecast period." While none of them agree on CAGR or market size, all agree it is growing -- just in North America not as fast as investors would like.
R&M stated, "The major factors that are driving the [UC] market are low cost of ownership as compared to other communications tools, pay-per-use model, growing mobility trends and Bring Your Own Device (BYOD), single platform integration of all communicating services, rapidly growing demand by SMBs, and continuous service support options." They all parrot each other, or more likely they are parroting the marketing material of the UC players.
R&M reported that "The North America Unified Communication-as-a-Service (UCaaS) market size is would grow at a CAGR of 9.2% during 2016-2022. North America would be the largest market during the forecast period. Driving Small & Medium business UC adoption is the need to enhance collaboration, especially among remote and mobile workers, and boost productivity."
R&M lists these UC players in NA: BT Group; 8x8; WEST; Voss Solutions; Polycom; Cisco; Microsoft; Computer Science Corp.; and Verizon. That is a limited list for certain. In North America, the largest players are VZ, MS, 8x8, Vonage, Fuze, West, RC, Comcast and quite a few others among the 2500+ providers in that geography.
CenturyLink was honored with Frost & Sullivan's 2016 North American Hosted IP Telephony and UCaaS Growth Excellence Leadership Award, yet didn't make any other the research firms' lists.
]]>When asked if this wasn't just a wrapper around Broadsoft's UC-One or other packages, Nextiva replied, "NextOS was completely imagined and developed in-house."
This follows Broadsoft's own announcements about Hub, Team-One and CC-One. This is BSFT's response to Slack, a real-time messaging and collaboration app now at 4 million users.
"BroadSoft Business includes three core applications: UC-One, Team-One, CC-One, with BroadSoft Hub providing contextual intelligence across the entire platform so users can access the information and apps they need in one place," press release states. "Built into BroadSoft Business are bOpen, bMobile and bSecure capabilities that can enable service providers to deliver carrier-class security and reliability; the openness for businesses to be able to integrate their favorite business apps (CRM, email, calendars, Twitter, etc.); and full mobility to connect advanced unified communication and collaboration (UCC) capabilities to a user`s mobile devices." I'm not certain if this is BroadWorks add-ons or if you can only get this via BroadCloud. The difference being that BroadWorks is run by the VoIP Provider and BroadCloud is the white-label service that Broadsoft operates for the provider.
Frost & Sullivan analyst Elka Popova wrote, ""BroadSoft's share of the global hosted IP telephony and UCC services market is 41 percent, which confirms BroadSoft's market leadership." With 15 million cloud lines, "BroadSoft cloud PBX/UCaaS installed base 3x greater than closest competitor Cisco and 10x greater than RingCentral." The "cloud line" is defined by Popova as "The BroadSoft installed base is hosted IP telephony seats, fully-loaded UCaaS seats and business VoIP lines." Still don't know if they include SIP trunks in that number because 3 million of those would be WIND and XO trunks then. And that woould skew UCaaS/HPBX penetration. It does look impressive in a graph:
Microsoft previewed Teams, which is its answer to Slack. It is currently only available to subscribers of Office 365 Enterprise or Business plans.
Meanwhile Cisco introduced a "flex plan" for Spark that lets businesses choose cloud, on-premises or hybrid services in a single contract. That includes Spark Meetings, which is also a Slack competitor.
Slack is attracting its own ecosystem that allows companies to integrate other functions to Slack beyond comms. Slingr turns Slack into a task manager. Other scripts can turn Slack into a CRM with Slack's user interface. IDEA2 and other companies like the user interface and the open API on which they can add functionality to an app people already like and use on desks and on phones.
Interesting that these folks are rolling out more complex platforms at a time when Verizon is rolling out One Talk which simplifies the whole UCaaS thing for small business. It's my experience that most businesses don't want complicated (hence, Slack!) and most users want simple (think Facetime). Without user adoption, this is wasted expense.
Want another example? Salesforce CRM at $99 per user per month but only a couple of people on the sales team use it actively. There will be managers who don't utilize the dashboard or coach to the activity in the system. Despite how integrated the SF ecosystem can be, it isn't worthwhile unless the users -- your employees -- are using it and benefiting from it! Same goes for any software, especially UCaaS (which is morphing again from Hosted PBX to UCaaS to UC&C and WC&C).
]]>RingCentral Office annualized exit recurring software subscriptions (ARR) grew 39% year-over-year to $316.8 million. RC says they are growing margins and revenue, while also increasing their losses. Is buying market share working?
8x8 reports that Total revenue grew 24% year-over-year to $63.2 million; service revenue grew 23% year-over-year to $57.7 million.
8x8's New monthly recurring revenue (MRR) sold to mid-market and enterprise customers and by channel sales teams increased 30% year-over-year and accounted for 65% of total MRR booked in the quarter. Average monthly service revenue per business customer was $409, compared with $360 in the same year ago period.
Per the PR: Ending seats at Vonage Business were 616,000, up from 514,000 seats in the year ago quarter, a 20% increase. Vonage Business revenue churn was 1.4%, compared to 1.3% in the year ago quarter. (About double what 8x8 reports.)
This is such a spun statement: "Vonage Business revenue, which includes $24 million of Nexmo revenue, was $106 million, an 86% year-over-year increase on a GAAP basis."
Broadsoft buys VoIP Logic to increase its white-label business, which now pits them directly against wholesalers like CoreDial and Bluip - and other BSFT clients who wholesale like Comcast and Momentum. If UcaaS was growing for the 420+ providers that utilize a BroadWorks platform, would BSFT need to ramp up its white-label and direct to Enterprise sales?
Interesting to note that of the noisy 3 in UCaaS, only Vonage has a BSFT.
Windstream announced yet another UCaaS product This one is called "Windstream Hosted Communications (WHC) for Small Business, a cloud-based phone solution offering enterprise-level capabilities to small and medium-sized businesses. Powered by Broadsoft. WIND also offers Avaya, Mitel and Allworx. Quite the mixture. It might explain why they have 1 million SIP trunks on their Broadsoft.
A couple of bright spots are the cable clan are almost all running Broadsoft. XO is powered by BSFT. (Coming to a Verizon store near you in 2Q2017!)
Both Bells - Verizon and AT&T - run Broadsoft for SIP trunking and UCaaS. In fact, we will see how the Broadsoft powered One Talk drives sales for both VZW and BSFT soon.
Recall that went ANPI was sold to Onvoy, they had just 20K seats on Broadsoft, so not everyone is killing it in the UCaaS space. In fact, if you take a sample from the INC5000, most VoIP providers in the US are doing LESS than $5M in business ($2-$4 million seems to be the median.).
"For 2016, BroadSoft expects the acquisition [of VoIP Logic] to contribute approximately $800,000 in revenue," that means that VoIP Logic was doing about $3.2M in revenue. BSFT's 3Q 2016 earnings call was this morning.
There are certainly VoIP Providers with more than $50 Million in revenue. I would argue it is more a pyramid than a bell curve.
Companies are ramping up the SPIFF war to grab market share in the UCaaS space. It is likely easier and cheaper to buy deals from channel partners that acquire a whole provider - and the resulting synergy/culture mess that will ensue with integration after a buy.
Bullseye, Fusion, Star2Star, TelePacific, AireSpring and net2phone are just six of the companies posting SPIFFs for deals to Channel Vision magazine's email list and other places. And the SPIFFs are designed to skew for larger deals (more than 8x8's ARPU of $409). Some are specific to a preferred master agency.
At an agent event last week, I was talking to an Avaya partner who is still selling strong. Sure there has been some dip in on-premise PBX but not as much as you would think. Windstream is still selling mid-market deals of Mitel and Avaya boxes.
Do you know where the weak spot is? SERVICE DELIVERY, according to someone whose opinion I value greatly. Barely anyone has that figured out yet! And that is where the Customer Experience starts (and stops). Size doesn't matter. What matters is deployment, implementation, design, training and UX (user experience).
I keep hearing from folks who say the SAAS model is about OPEX over CAPEX. Well, that is the story but for most businesses, the spend over 4 years for a cloud comms solution is more than buying one. So there is a premium to be had for Hosted UC.
I have said it before: UCaaS is selling Change. You have to change the buyer's mind from "It is a phone system" to it is a new way to communicate and run your business with employees, contractors, customers and vendors. And then the buyer has to want that too.
I think much of the OTT VoIP is really about cheap dial-tone and one or two features (like conferencing or voicemail to email) as a bonus.
The other factor: CPaaS. Instead of using a desk phone or softphone, people are using Apps to talk to one another - like on Xbox, in Uber's app, Facebook Messenger, WhatsApp and Slack. This is taking away from some UCaaS sales as well.
The Skype4B noise has finally quieted down. But Greg Plum at PlumUC is running a Skype4B Bootcamp because users still can't figure out how to get the most out of S4B. All UCaaS providers should be training users constantly to teach/coach them how to improve collaboration and productivity, the two reasons the execs spent the money on UC&C to begin with!!!
FairPoint has entered the fray with Telax software. "Although FairPoint foresees the new service being applicable to all of its customer segments, the company expects the immediate sweet spot customer profile will be those that have 20-100 employees," per source. I guess in their territory that is mid-market!
Last piece of UC news comes from Broadvoice, who has been approved as a cloud services vendor for all states that participate in the public sector Cloud Service marketplace, created by NASPO ValuePoint in conjunction with the state of Utah.
Broadvoice CEO says that they are one of the only UCaaS providers in that marketplace. ]]>I have written about the massive amount of personnel shifting going on in the industry. I would like to think that all this change would mean, well, change. But it doesn't. It means a lot more of the same.
When chairs are being removed, who is going to take a risk? Not many. Most will hunker down, hire friends who will help cover their backside, and aim for the center of the road, playing follow the leader.
I see it with features, product lines, messaging, compensation (SPIFFs) and partner agreements. The sameness is like drowning in a pool of vanilla yogurt.
As we head to two back to back channel shows, I am packing with no visible enthusiasm because for the most part, there isn't anything to get excited about. The sameness is deafening.
There will be "newness" in the form of the re-branding of merged entities. And there will be a new term bantered about: SD-WAN.
There will be some new faces in familiar logos and familiar faces in new logos. There will be parties. (It looks like drinking is the main reason to hit DC this August - and I don't mean because of the presidential candidates).
This industry that is hoping and praying and dreaming of moving to cloud services is in major need of a colonic.
In the UCaaS space, premise based PBX has not disappeared. The handset / desk phone has not gone away either. Cisco and Intel are still shipping boxes and chips. Laptops are still being bought (more of them by Apple than the old PC guard). The laptops come with hard drives and O/S still, not dummy cloud terminals yet. Virtual Desktop or Desktop as a Service is not on fire in North America. All those analyst predictions were WRONG!
Most discounted one big thing: No one wants change AND selling Change is Hard! Cloud is change. And it isn't even assured change. If you have ever been involved in software deployment, you know that most of the time the desired outcome is far out of reach. In short, software deployment falls short. That doesn't bode well for a transition from a controlled environment (NOC, servers) to a rental model (SAAS).
Are people moving to cloud? Absolutely. If you want to include Salesforce, Office365, dial-tone replacement sold as Hosted VoIP and SIP trunking as cloud services.
Telecom spend is down from 2014 to 2015. A lot of that is due to price compression. Cable voice is about $10. Some Hosted VoIP providers are selling seats at $10. This happens for two really different reasons. Cable gets to raise bundle ARPU by $10 to give you voice. It is a win for cable. Triple play sales plus $10 extra. For the VoIP player, it is revenue, any revenue. Please someone buy my services!!!!
One Broadsoft provider dropped about $3M to get to 12,000 seats. The high end is Vonage and 8x8 with just over 500K seats each. Not even a million seats after 10 years! Meanwhile Windstream has 1 million SIP trunks on its Broadsoft platform - and XO has 2 million.
It used to be that voice went to the ILEC. Then IXCs came along to rob some LD minutes and then some toll-free minutes. Then CLECs got into the game. Even at its heyday, no CLEC had more than 60K customers, except maybe some UNE-P players before they crashed. Today, voice is replaced cellphones, cable voice, SIP trunks from OTT and CLECs, Hosted VoIP by ITSPs and apps of every variety. Everyone is fighting over a voice pie that is going to ZERO.
This is the main reason why when selling UCaaS, you have to look at the whole system and not that you are selling voice. Businesses have to be omni-channel now. That is why cloud contact center is hot. That is why CPaaS is hot (twilio IPO and Vonage-Nexmo deal and my podcast with Zilkr.)
While this shift is happening, it seems no one is noticing because the talk is the same. We push products at people who don't care because it is all the same. It is transactional. At least everyone knows the difference between a Big Mac and a Whopper.
If you think a new SPIFF for your HPBX offering is going to swing the tide, it better be larger than 7X MRC because that is the new table stakes now.
Well, two conferences of vanilla pudding coming up with a noise level that should have me drinking by noon. Let's meet for coffee. It's easy just get on my schedule.
If you want to be green jello in the midst of all that vanilla pudding or even better, a brownie or piece of cake, give me a shout. I have a bunch of thoughts on the subject.
PS
Next year at this time SD-WAN providers - meaning just about every LEC - will be in the same boat as the UCaaS folks unless something changes, besides the people keeping a chair warm.
]]>But eventually you think out the herd of competitors that you can afford to buy and now you have the real revenue growth numbers staring at your face. UGH!!! How do we buy more growth? Advertising won't work. It has rarely ever helped the CLEC industry. I remember Paetec ads about technology. XO was a big sponsor at the Tampa Bay Lightning hockey arena and yet no one I ask knows who they are.
So if the awful advertising CLECs did won't work, how do we get growth? Well, we could innovate and make a really cool product but that seems unlikely. We are in a me-too industry that since the pin dropped was all about Saving the Customer Money! We can't change that now by making a product that people would seek out - like say Slack!
Nope. How about buying sales? That we can do!
Hence, the SPIFF wars of 2016. Every other day I get an email with a new SPIFF announcement. Most are from Hosted VoIP companies. These SIFFs include SIP trunking much of the time. It is getting crazy as it is well past 3x MRC for any SPIFF.
There are two reasons this war is occurring: the market is such a bloody red ocean (hyper-competitive) that providers need to get attention or the sales are slow coming in. It makes me wonder how soft the market is. Very few VoIP providers are public, so revenue numbers - real numbers - aren't reported.
As an agent, I like SPIFF money, but I don't like when carriers say that is the component I use to decide who to sell. It is kind of insulting.
On a 20 seat deal at $25 per seat, it is $500 in MRC, which is the minimum sales size for some of the SPIFFs (some require $1000+). At 20% I get $100 per month. Do you think I want to TRY a new provider? Do you think there is room in there for me to blindly trust a new provisioning team or deployment method?
I won't sell SIP trunks OTT because the call quality is questionable enough that I don't want to be bothered with the headache. OTT Hosted PBX has a higher churn rate than reported because they leave out the first 30 or 60 days.
How many customer calls can I take for $100 per month?
Certainly there is a percentage of partners selling on both price and compensation. And that allows a provider to buy market share. But at what cost to the partner's business?
How about a we won't screw it up guarantee? Or we pay a SPIFF if the customer isn't happy? That would work but it would need to be more than 6X MRC because I will lose the customer forever.
It will be interesting to see if year over year sales growth for Hosted VoIP goes up more than the 26%. I am betting it won't.
]]>Hosted PBX, UCaaS, and the like involve a lot more than the hardware version, because now it is a software application service delivery project. There is extension mapping to DIDs, SMS, and email addresses.
This isn't a simple implementation. This is a software deployment.
Copper was in just about every building. Occasionally there would be an issue with no available pairs, but today quote has a site survey. Many have construction costs or minimum spends for the build. Then there is the actual construction to manage. Customer site preparation, conduit, power and connectivity from the telco closet to the office suite.
It used to be easy: be like a realtor and sell some colocation. Now, VPS, IAAS, PAAS, and other virtualization means a conversion from hardware that was shipped, stacked, turned on, plugged in to a data migration and software project management.
So many moving pieces today. Much more project management involved than ever before, all while price compression also means commission decline.
If you are selling network, it got harder. Site surveys and construction projects to manage and communicate to your customer. More unpaid work for less compensation. It's understandable that you don't have the time or desire to learn the latest technology like UCaaS, Workflow, Contact Center, SAAS, AWS, SD-WAN, dynamic network, managed services and all the security products - UTM, cloud firewall, DDOS mitigation, etc.
It's only going to get more complicated. Gary Vanderchuk's keynote at a credit union industry event is titled, "You Better Figure It the Hell Out". Some really good advice even though it isn't our industry and it is an hour. He even talks about missed opportunities and what it is like being an entrepreneur and CEO.
]]>Seth Godin's blog today describes not a pyramid, but a Frustum. Seth uses the music business as the example, but I see it in the telecom industry today. There are no winners. There are lots and lots and lots of providers doing the exact same thing.
And in channel building, it isn't about getting 450 partners, because truthfully it will be 45 that make you all the money. The other 405 are overhead.
Developing a strategic plan means not only describing the product, the outcome, the target market, but what success looks like. Often we just have a nebulous revenue number in mind or hundreds of millions.
Everything is a race to raise millions, be a unicorn, cash out big. It is the new lottery system. It isn't reality.
At the end of the day, what is the business strategy? What is the Why? What is the exit strategy - or are you building a business built to last?
I notice that every channel exec and every telecom exec says that the reason that things are off - or they are not growing as much - is because sales people can't sell. While I understand that telecom selling has not kept up with the times, I also think that the providers, the execs, the marketers have done a crappy job of telling the story.
Throwing words like Hosted PBX, Cloud, IOT, SDN at the marketplace is nonsense. It's inside baseball jargon that doesn't mean anything to the buyers. No one is searching for hosted pbx on Google. The fact that we have gone through so many terms - Hosted VoIP, Hosted PBX, UC, Hosted UC, UCaaS - just goes to show that we don't know what the f we are selling. A new acronym is not going to move the needle. A new story will. Plain language will. Talking about Solutions, Business Outcomes, take-aways, not features and products. (More here)
Selling needs to change. But so does all the friction in buying and selling telecom. No one makes it easy.
And speaking of friction, AT&T is pushing its IPFLEX, scaring customers with the noise that all the copper is being retired, basically forcing people to transition to IPFLEX from TDM PRIs. However, you can't run faxes on it - still! IPFLEX is just a SIP Trunk -- like oh so many providers offer in much the same way. There still needs to be a pipe. There are still call quality issues with OTT VoIP. Despite all of that, it is simply pushing a Product, not delivering a Solution. It is FUD, friction, frustration.
I guess I have been beating the same drum over the last three blog posts. A little repetitive, but maybe we need to hear it more than once, in a couple of different ways, before we realize that this blog is in fact a mirror for you.
]]>We are almost 12 years in and No HD Voice, No Fax over IP. Key system emulation, certainly. For most of this, the ITSP could be using an Asterisk box with some SBCs. No need to spend the money on a softswitch and blade servers. No need for the expense of maintaining a carrier grade network.
Consumers are used to crappy call quality -from Skype, cellphones, P2P apps. And video calling is now available on a number of chat apps. So texting and video calling. Is it the substitute for SIP trunking perhaps?
Switch.co and others offer solutions without desk phones.
However, "Millennials, [the Polycom exec] told me, often want desk phones. Really? Those FaceTiming, smartphone-loving, no-patience-with-grandpa's- technology-having Millennials want deskphones? Apparently so, this exec told me. The reason? A deskphone means permanence. It's not going anywhere, so hopefully neither are they." [NoJitter]
A Frost & Sullivan study that Polycom sent over suggests that the drama of the death of desk phones is right up there with the death of SMS revenue. It might be happening but the data suggests otherwise. (BTW, ARPU isn't down for the top 2 cellcos either, so....).
All of this suggests that while salespeople may hear that there are forces working against them in trying to sell a complete Cloud Comm solution, in fact, they are just not doing a very good job in Discovery or of making their case.
The uphill battle is to educate the customer on the way that cloud comm will change their business. But then you are selling change - and nobody likes that.
In a discussion today with a cloud contact center marketing exec (talking about sales training), for salespeople suffering under the burden of quota, it is far easier to sell replacement services than cloud comm which has a longer sales cycle. When you have to hit quota or just need to make a sale, it is easier to just do what we have been doing since the Pin dropped -- selling like for like with a small savings. Press hard, three copies.
]]>It is all me-too service today: some form of dial-tone either OTT (over the top riding on the existing Internet bandwidth) or on a dedicated circuit. Small business like the straight up POTS replacement, right? So do salespeople. It's easy. Save money with VoIP replacement service. Sign here.
But there are issues, especially with faxing. So why aren't their options for faxing? Plenty of ways to tackle that beast from efax to inter-operability with either a fax machine or an ATA. I realize T.38 end to end is a dream. And as long as we are on this, how about HD Voice off net? There are plenty of VoIP peering points to keep this traffic from doing the digital-to-analog conversion.
How about SMS enabled? Seriously! So many people just want to text, this would be a easy option for small business with a limited number of lines.
Find me follow me is a feature on Hosted PBX but it could be an option for a SIP trunk too. Alas, POTS lines have *72 for call forward, so why not FM/FM or simul ring? Grasshopper (now owned by Citrix) and other auto attendant in the sky services offered something like it.
Especially for small business, how about the option for a 4G failover router since most likely they will be on broadband. There are a number of routers that offer 3G/4G/LTE failover including ones from Netgear and Cradlepoint. CDW mentions how critical it is for retail locations since credit card processing is vital.
Switch.co by Craig Walker, of Grand Central/Google Voice fame, is offering a Hosted UC service for Google for Work users that Sprint is now reselling! In the Microsoft ecosystem, the Lync/Skype for Business service powers Office365 voice options.
If you don't get creative with your bundles, you are going to get your ass kicked. Or you are going to have to sell voice as cheap as you can at razor margins. And most of you can't get as low as cable voice.
I see companies fighting over quotes for virtual phone numbers at $1.50 to $5 each. Why?
Even an audio conferencing option isn't offered that I have seen. And let's not even consider Unifying these services into one bundle -
I see dial-tone going for free - or replaced entirely by cellular. Stave that off with a better bundled SIP Trunk.
I realized that some of this is being incorporated into Fone.do. So cheers to that.
And one other feature is a better Caller Id system. I think caller ID should be hooked up to Google search so all those annoying robocalls and telemarketers would be identified. It would be great if there was a button to push to notify the carrier of a spoofed ID. The sooner we get big data and analytics working on caller ID, the sooner robocalls (and the telecom providers who power them) will die.
How about a caller ID that pops up and says not in your contact database, ignore?
]]>The stat that "40 percent of participants are already using elements of a Unified Communications (UC) solution" is misleading because UC is a garbage term for many components of voice, video and comms. And if 71.5% didn't understand the term....
"The biggest thing that's lacking is the strategy surrounding Unified Communications." I see how that happens from a deployment of UC standpoint and from a product management standpoint. Most deployments of UC stink. (Software deployments overall stink to the tune of about 70% suck.) UC is software. We just don't really scope it out like we should. We just deploy.
From the product management side of it, we let features get in the way of functionality. It isn't about the features; it is about the ease of use. In many cases, the UC platform deployed is going to have more features than most need or understand; there won't be much training; and the system is neither intuitive nor easy to use. Case in point, the phone. Employees have been the same phone for 5-15 years. Then they get a new handset from the ITSP - usually a Polycom but it could be snom, Yealink, Cisco, et al - which is entirely foreign to them. The buttons aren't labeled. There's no index card guide for fast reference on call transfer or what-have-you. Lost productivity and frustration results. That wasn't the outcome we were shooting for.
The studies keep coming along with the forecasts. Coredial says it is an $88 Billion opportunity with much of it unrealized as of yet. Markets and Markets Research predicts the cloud UC market to grow to nearly $25 billion in 2020.
It is a hyper-competitive space that has not had many declared winners. Yet.
Key vendors listed over and over include Cisco, Microsoft, IBM, and Avaya. No idea why HP is included but not Dell or Google. Also, a bunch of ITSP and Duopoly players missing from that mix.
Edgewater Networks did a survey of 1,250 SMBs on VoIP adoption. More good news for the 2000+ Hosted VoIP providers, only 36% penetration even with over 250 seats. "Below 20 seats, we're talking under 20 percent. The great majority, however, declare intention to convert within two years." [channel partners]
I am saying Hosted VoIP here because most of the VoIP sold is POTS-and-PRI replacement SIP trunks. And even that runs into a wall when you consider that many of the TDM lines left standing are for faxes, elevators and alarms. Also, building codes have not changed to reflect a the TDM-to-IP transition. Many buildings still require flash-hook type dial-tone. So some of the penetration is stymied by the lack of fax support. Hard to believe.
"Gartner considers the large enterprise UC market to be mature, though product capabilities, market focus and vendor strengths vary. As a result, enterprises should carefully match their own priorities to vendor strengths before committing to a solution," as reported on UCStrategies. Enterprise isn't where most UC providers play. Don't get me wrong, they would like to, but that business typically goes to a name brand.
I harp on this all the time, so it is nice to see another person mention it: " the challenge remains, as always, to provide some real business or organizational value. Vendors and their sales and implementation teams now need to present and support solid business justifications for purchases and actual customer deployments of UC solutions."**
One reason why the Enterprise is prized is that they usually get more than one package. "Also, many of the vendor's products, such as Alcatel-Lucent Enterprise's OpenTouch Suite or IBM's Sametime, can be deployed as overlays or integrations with other vendors' telephony switches. On the other hand, the UC&C world is waiting for either Microsoft or Cisco to really get a grip and provide great interoperation between Microsoft Lync/Skype for Business and Cisco Collaboration/Unified Communications Manager. Vendors who remove the costs and risks of integrations will likely see gains in their UC revenues." [**UCStrategies]
Personally, I couldn't care less about magic quad or any other list of supposed awesomeness. Revenues talk. The rest is for sale.
At the Enterprise level, they already have a culture around Microsoft and Cisco, a culture born from certifications. You won't get fired for buying Cisco, MS or IBM. However, under 500 seats (the full SBA defined SMB space), where the largest number of businesses lie, they just need a few things:
One, someone to come explain what this technology can do for them.
Two, a story about a similar business and what the technology did for their business.
Three, a reference account that will tell the story about how the deployment went and what post-sales is like.
Finally, you need someone to go knock on doors, get out to network, be a brand ambassador and get your name out about what you do for SMB and why. That is your sales and your marketing.
Now you could go the other way and build an impressive lead gen marketing campaign. That is a good way to go as well as I wrote yesterday. Also as I wrote yesterday, you need to refine the product and the message as you get feedback from the users.
]]>Sales has to be about the business and its goals and outcomes. Otherwise sales cycles will increase and transition to IP and Cloud will stall.
The former CEO of Razorfish (prominent digital marketing agency) has a good take on marketing for cloud services. "Words Matter."
Cloud is a marketing term that confuses between 30 and 40 percent of the people. (They think it has to do with weather.) There are a billion search results on Google for cloud. But it is nebulous! [Intended pun]
For too long our industry has sold under one major premise: replace what they have with something cheaper. It is what the LD wars were about. It was the Vonage story as one of the first major VoIP marketing company. [That's right VoIP Marketing company. They weren't the first to launch VoIP. They were one of the first to market it to consumers in mass.]
SIP Trunks are sold as really cheap replacements for POTS and PRI. This is our industry.
As an industry, we hardly touch on selling the customer managed services, security, colocation or conferencing. The providers make a lot of noise about it, but actually selling it is a different story.
I won't go into detail, but I am certain you have seen articles about Social Selling and LinkedIn as Lead Gen. These are fairly new ways of going about the various steps of selling. But they weren't around even four years ago. And that begs the questions, what have you changed in your process in the last four years (not counting having a partial LinkedIn profile)?
The sales force has not caught up with the fact that buyers are different; buying patterns and reasons are different; and that the buyers are informed and have transparent pricing. All of those factors mean that the salesperson has to sell different. But do they?
Dimension Data's Tina Gravel talks about how many sales managers are struggling to get salespeople to sell cloud services.
Almost every channel exec that I have spoken with has some disappointment in the sales of cloud. It is sold on price. It is sold as cheap voice. I still go back to the ITEXPO UC panel blaming all implementation problems on the salespeople, who sold the wrong thing.
"Research released by MDS noted that 75 percent of IT and telecom decision-makers were actively seeking to move towards a UC infrastructure sometime in the imminent future." [source: CV] Another marketing term - UC - that no buyer will ask for.
The whole object is customer experience. You want a win-win. You want the customer to get what they expect, be a happy customer, and maybe tell a few people. To get there, you have to start with the Customer! What is be expecting, what experience does he expect -- What outcome is he looking for?
UC is a garbage can term for a bunch of elements that are used for communications. Cloud is a garbage can term for a bunch of software applications that used to be hosted or that have been moved to a cloud infrastructure (like AWS).
So if you have this garbage can term, the conversation should be about the elements and what the customer wants to do with them (at the very least)?
I get it. It is very hard to get out of this huge rut of replacing stuff -- and the standard questions you have been asking since 1999.
It is hard to sit a prospect down to have a conversation about the software, the Internet and the impact that both have on the business. BUT if you have THAT conversation.... holy cow! You change the game!
ANOTHER THOUGHT ABOUT THIS:
Think about the noise around SDN - software defined networks. Really this is just dynamic bandwidth, right? It's about the fact that bandwidth demand is going crazy. You can sell pipe all day. A standard sized - 10, 20, 50, 100 MB or 1 Gig - pipe every day. Slogging it like a T1. But the thing about SDN is that you have to have a discussion about what the traffic is - how, when, what, where. That isn't normal.
Sure, you can keep plugging standard pipe, but then someone is going to come along and talk about dynamic bandwidth, SD-WAN and the traffic - and then you are out like a dinosaur.
The salesperson that starts a Smart Conversation is the one who isn't just a salesperson. They are a resource. They are valuable. They are trusted. Do you get where that goes?
Good luck.
]]>