On Rad's Radar? - sip trunking Archives

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.

Agents Need Training

2011-11-01T04:09:18Z

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

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

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

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

The Telco Customer Experience

2011-10-18T18:39:30Z

There has been some buzz on twitter about the telcos working on bettering the customer experience. Despite JD Powers awards, the average customer is not happy.

Those that are still on Telco 1.0 with POTS and DSL do not have a special relationship. And the fees are piling up.

Those with 3G or 4G wish they were actually getting high-speed broadband.

Those with VoIP - not quite Telco 2.0 - wish the quality was better.

Those customers with Hosted PBX - Telco 2.0 - wish the onboarding was better; the features easier to figure out; and that the quality was better.

The promise of Telco 2.0 and 3G/4G has largely been limited at the customer experience end.

The telcos want to get into Managed Services, but customers wonder what that engagement will look like.

So far the Managed Router has been a dud. Quite a few times, the password is lost; reporting is either extra charges or non-existent; and it ends up just being a dumb box that succumbs to being a new demark.

Telcos tried e-commerce. Fail whale.

On an XO partner webinar today, Steve Carter went over the onboarding process for SIP trunks and other VoIP services (like Hosted PBX). SIP isn't a standard, so it isn't like PRI. There are inter-operability issues to think about. There are LAN concerns along with mapping extensions and devices.

As an Agent, you have to own the onboarding process. Why? Otherwise the customer will have a bad experience and your name (brand) will be mud. At the least, the agent has to properly set expectations for what the customer can expect and what the customer site prep work is.

Since the Telco Customer Experience is not optimum, the Agent is in a prime position to be the glue there. The telcos can not improve the customer experience while performing cost cutting (laying off) and integration of acquisitions. Domain knowledge is disappearing. Any customer relationships are terminating. It is in this void that the Agent can make the most impact.

It's Monday So Lots Happened

2011-10-17T17:21:24Z

Polycom bought Vivu, a video collaboration company, to help Polycom push it's Presence gear. Video, video, video. Yet I never have video calls or video call requests. To me, I wish you would work on the phone part. Give me a great looking phone that is easy to use and where the voice quality is awesome. Can you do that? Not really.

All the companies in this space are running to the Video. Why? Deployment and usage are challenging enough without trying to hook up video and make myself presentable. Fax over IP and HD Voice are still just a promise - and video conferencing off platform doesn't work.

It's kind of like talking about Cloud or UC, you are hoping for a stock bump or a PR bump.

Folks are at the Broadsoft show today being introduced by a 3D presentation. Then they will be peppered with alcohol to dull their senses so they can listen to BSFT talk about Video Conferencing (iLinc acquisition) through BroadWorks (Don't get your own; Buy more licenses from us!). Then I'm sure it will be about Mobility and Integration from the vendors that ponied up big $$$ to pitch their wares.

The one thing that gets lost in all this: there are too many VoIP Providers in the marketplace (over 1100 in the US alone). All of them are still trying to figure out how to sell more seats! Sure, they can sell SIP trunks but that is low margin commodity business. Hosted PBX is a higher margin (if sold correctly) business that is about to heat up as the cable giants - Comcast and Cox - roll it out nationwide and give away access in the sale. How does a Hosted PBX provider who doesn't own a network compete then?

And selling UC&C (unified comm and collab) mixed with video is a specialized sale. First, you need a base of Hosted PBX clients and a set procedure for deployment and on-boarding customers. Then you can have a process to upsell or chase a specialized market.

Meanwhile, we are all waiting for the FCC to make some decision on both USF Reform and Inter-Carrier Compensation. ICC will actually change the VoIP market a little. Not that anyone noticed, but the TRA is now a requirement for Inter-Connected VoIP Providers. Why not utilize the video and collaboration components to solve TRA and Communications for Disabilities? Then at least you would have a hot button.

I was going to rant about USF Reform -- like how we should kill the whole program -- like that would ever happen -- because spending tax money to outfit rural areas with broadband is kind of crazy, in my opinion. And its only 15 million Americans. How many will actually buy broadband? Maybe 67%? So 10 million? At a cost of 15% of the bill every month? That's crazy.

Anyway, on to M2M. Sprint is big in Machine-to-Machine wireless solutions and "has targeted four high-growth segments as the umbrella focus of its M2M development activities and offerings: Connected Transportation; Connected Meters, Sensors & Alarms; Connected Machines, Screens & Things; and Connected Personal Devices." [pr] Meanwhile, Sprint is hoping the iPhone bouys up their subscribers.

VZ is getting into home energy monitoring and testing 3G/4G networks nationwide. I'm sure that it will be an unbiased study of the 3G/4G world (MetroPCS, AT&T, T-Mobile, Cricket, Sprint and VZW).

And in another blow to privacy, VZW "has made a change in its privacy policy that clears the nation's largest wireless carrier to track its subscribers' Web browsing, location and app usage habits," according to the LA Times.

Did you know there is such a thing as Hardware-as-a-Service? Chartec and Outreach offer it in a partnership.

NTS/XFONE grabbed 1800 cable customers in West Texas from Reach Broadband.

ABRY Partners bought data center company XAND, who is either a hosting company or a data center infrastructure company. To tell you the truth, the way these press releases describe the companies involved, I know two things: (1) the PR firm has no clue what they are talking about; (2) the marketing department or firm has no clue what they are talking about either. Keep It Simple!

CLEC Frustration Part II

2011-07-28T18:22:31Z

One reason that the ILEC's have been frustrated with CLEC's and spend so much effort frustrating their orders is due to the Lack of Value that the CLEC's -- in general -- bring to the market place.

Resellers, Rebillers, switchless, UNE-P, and the like add nothing to the ecosystem, except lower rates. And this has been the case before the Telecom Act of 1996.

Along comes VoIP and what's the first thing the Industry decides: Hey! Let's sell it for less than TDM! SIP trunking, same thing. How wholly unoriginal -- and lazy.

The original plan for UNE-P was that CLEC's would use it to build up a customer base where they did not have a switch to finance the purchase of collocation and a switch. It rarely happened. That's why when the TELRIC ruling came in and UNE-P went good-bye, hundreds of CLEC's gulped and lost their business.

Even now, they can't bring margin. Birch - a two-time (2002 and 2005 and almost again in 2008) BK player - just bought Cordia assets - " Included in the acquisition are approximately 55,000 business, residential and broadband access lines across 24 states" for $8M. Those accounts are valued at $145 each. No wonder Cordia filed BK.

The big problem for most CLEC's is they have no idea what their mission is or what their value is (other than I will save you 10% cha-cha-cha).

The successful ones -- not the big ones because Intermedia was the first $1B CLEC and also the biggest CLEC to HAVE to sell itself -- the successful ones, like Sonic.Net, Gorge.Net, Hunt Telecom, Cbeyond and Socket Networks, know not only what the mission is, but the Value they provide AND on top of that they know what they do NOT provide.

Rule number 1 in sales is not always be closing but always be dis-qualifying. Sales does not have the time or manpower to hang with every prospect. Sales needs to determine who wants, needs and can afford our services now.

CLEC's hate to say NO. Even when it isn't a good fit or they will lose money on the deal. Just say No! Quickly.

Key points for any executives:

Know what services you make margin on.
Know your Value Proposition to your marketplace.
Know who your marketplace is.
Focus on just that - providing high margin services to your targeted marketplace.

SIP Trunking Deployment Lessons by XO

2011-07-13T18:57:27Z

XO has hired Ronan Keenan to handle their corporate social media, like the @XOComm twitter account. They put together quite the resource for SIP Trunking Deployment at Storify: SIP trunking implementation resources including videos, presentations and documents by Steve Carter, who is the SIP Product Manager at XO.

He narrates a detailed video about SIP Trunking: Learn the Steps to a Smooth Enterprise SIP Trunk Implementation. Good info for Agents to use to learn on their own at their own pace.

Starview Talks Prism

2011-04-16T13:58:50Z

Starview CEO David Walsh talks to me about PRISM, the SAAS OSS that Starview is offering to VoIP Providers covering toll-free numbers, DID's, origination, LNP, CNAM, E-911 and even SMS. Starview also offers a white-label Hosted VoIP solution also activated through PRISM. StarView's PRISM Service was highlighted by Garrett Smith at VoIP Supply as one of the top 5 offerings at ITEXPO East in Miami Beach 2011.

Rulings on VoIP All Over the Place

2011-04-13T17:10:54Z

So we have a ruling against MagicJack and Ymax that AT&T won that supposedly will just require some tariff changes for MagicJack to be back in the game - collecting its $5M. There was also a VoIP traffic ruling against PAETEC in favor of CommPartners that basically said that an all-VoIP stream was not subject to access fees, which might be the same ruling in this case.

The FCC held a meeting about Inter-Carrier Comp last week. No ruling or order followed. Why would it? Any ruling will tie it up in Court for years - and they had a shutdown looming, so blame that. If the FCC would just say end-to-end VoIP is not subject to ICC and access fees, we would be done.

Almost all voice is VoIP at some point since most of the LD traffic is carried over an IP network. Hence, why they mean end-to-end. If it starts as VoIP and ends as VoIP, we are good to go. And since U-Verse, FiOS and all th ecable voice is some form of SIP, that would help out about two-thirds of the ICC.

In similar news, wholesale VoIP has a few new players and a couple have merged, but the funny thing about all of this is that voice is a flat pie. It isn't growing domestically. Globally more and more peoples have access to voice services via Skype and cellular than they did before (especially in Africa, LATAM and Asia), so global voice is growing. But domestic voice in the US just shifts from player to player. It's TDM then VoIP. It's on Level3 then it's on Qwest then it's on AireSpring. Price pressure, litigation over access fees, inter-carrier comp, and traffic pumping all add up to an unstable market. Wholesale is about scale, fractions of pennies, operational efficiencies and collecting revenue due on time. Even some retail service providers have the exact same model for their business. It doesn't play out well, does it SunRocket?

VARs are Replacing Agents

2011-04-03T13:35:04Z

In an article in Channel Partners magazine, Master Agents discuss how all their future growth will come from VAR's. Carriers are chasing VAR's for any growth in Channel numbers. Where does that leave the Agents?

Well, Agents can partner with VAR's to be the telecom provisioning department. Or Agents can start getting uncomfortable or irrelevant.

Exam the fact that most Agents do not want to sell cellular. Part of it is the commission structure. Part of it is that Agents are at a disadvantage selling cell phones - in available models, discounts, and plans. But the top two cellcos want the Channel to sell mobility because they don't want to be phone companies. That's an impasse.

Look at Hosted PBX. Agents ignore it for the most part. I was surprised that my panel on SIP Trunking at the CP Expo about adding value to the SIP sale ended up being about the fact that Agents have to get used to the idea of selling SIP. What? Five years after the first SIP panel, Agents still have to be convinced that SIP is taking over? Wake up, people!

And when you do sell it, you sell it as a cheap replacement for PRI. Deep sigh!

Then there is the whole IP, Internet, Cloud situation. The Internet is not a fad. Broadband sales are growing at 1% a year. That means you have to start taking on other forms of revenue - and most of that revenue will be ATTACHED to the Cloud.

Agents typically have only sold to on the WAN side of the demarc. VAR's typically take the LAN side of the demark, except when they also host servers and applications (like MS Exchange) for clients, but that has been mainly on-premise servers until recently.

VAR's typically touch more Layers of the OSI Model than Agents. Agents sell at Layer 2 (transport) or Layer 3 (Internet Access). Rarely do Agents do cabling (Layer 1) or apps (Layer 7). VAR's however touch Layers 1, 2, 3 and 7.

The scenario playing out today reminds me of when Agents only sold LD and they would ride that into the sunset. It looks like we will see that again. With commission changes, channel structure changes and product changes, something has to give.

Here are some suggestions for the Agents:

First, Get your CTP certification!
Start networking with Microsoft, IBM, Cisco and HP partners. Even Xerox and Ricoh dealers.
Plan on spending at least 90 minutes per week online learning about services that your favorite carriers are offering. It's time to expand your knowledge and your own portfolio.(TCA has monthly webinars and so do most of the carriers.)
Join the local technology association to learn about any new cloud providers that you can get to know and become comfortable with.
Get used to the idea of being uncomfortable. Growth only happens when we are outside our comfort zone.
Attend a conference or two to meet potential partners or providers or just to get some deeper knowledge.
If you are stuck, call me.

Good luck!

BTW, growth doesn't mean adding cable providers to just stave off the reality. You need to get deeper into IP, Apps, Cloud and the customer's total IT and telecom spend.

Super Charging the SIP Trunk

2011-03-17T16:37:10Z

I was on a panel about Supercharging the SIP Trunk Sales by Broadvox. It sounded similar to the panel I did at CVX West 2010 on Upselling the SIP Trunk sale.

This one had to go a little more basic to What is SIP? SIP Trunking is how carriers power dial-tone to an IP-PBX. Beyond the definition of the term, there is the concept that this specification for a voice packet to provide dial-tone is the foundation of the Next-Gen Communication platform. Start with the SIP trunk as the basic circuit needed for communications. Then other applications that utilize SIP sessions can be integrated into the platform. (In many cases, the platform is the PBX or the softswitch.)

One point that I made: All voice will soon be Voice over IP. Cellular is. Long Distance is. Dynamic T1 is. Cableco digital voice is. AT&T is turning off the PSTN with the approval of the FCC in less than 10 years. SIP has become the de facto protocol for Voice over IP - beating H.323, MGCP and others. Agents (and customers) have to get on-board with this fact. SIP is here to stay.

Yes there are issues. Most notably Fax-over-IP (which many companies are working on, T.38 not withstanding); HD Voice; alarms, elevators, credit card processing machines; and inter-operability between the SIP provider and the gear attached to the Trunk. Since SIP is a specification of about 30 RFC's, it is interpreted differently by manufacturers and providers. Hence, inter-operability is extremely important. It is not like a PRI, which is a standard, with just 2 configurations available in any class 4 or 5 switch or any PBX system. That makes inter-op easy. Today. Maybe not so much in 1988.

Our panel then went a little crazy talking about Unified Communication and all the possible UC components that could be mounted on that SIP trunk - like SMS/text, IM/chat, Video, Presence, conferencing, ACD, IVR, etc. Unfortunately, it's not that easy and most of the integration is with the gear (PBX, IAD, softswitch, SBC).

During Q&A, some asked how to explain SIP to a customer. I said, Don't. Would you explain how the engine works in a car? Focus on the benefits, the reliability, the way it will help the business and you won't have to worry about saying VoIP or SIP.

The panel had to explain that SIP trunks mean different things to different carriers. In some cases, a SIP trunk is just a call path. In other cases, a SIP Trunk is a circuit containing many call paths. It's confusing for the agent and the customer.

There are two ways to deliver SIP Trunking: over an IP circuit and over the Internet. Big difference. SIP sessions over the Internet lack quality of service. Jitter and latency will affect the voice quality. SIP Trunks that ride private line, virtual circuit or MPLS circuit have not only the best call quality but enhanced security.

Many ITSP's started out as ISP's (or at least with an ISP infrastructure). At the NOC, the ITSP has aggregation circuits for DSL, MPLS, private line from ILEC's and CLEC's. Some even have aggregation with a cableco. This means that the ITSP - in its network footprint - is delivering VoIP service to you on a private network with QOS of some level. The customer is receiving Internet over the same circuit but the egress to The Web is AFTER the aggregation point and separate from the softswitch.

Major MSO's deliver their Enterprise VoIP product as a physically separate VLAN. That offers QOS and security as well.

At XO, Pete Davis and I have collaborated on a concept called The UC Sandbox. XO has all the components for UC available for sale. Hosted MS Exchange, Blackberry server, Hosting, Collocation, IM/chat, Hosted PBX, SIP Trunking, Contact center application, web & audio conferencing, video conferencing, data storage, Anywhere service, and more can be provisioned for the customer as a single individual service or as a bundle of components. The bonus for VAR's is that if they have a business selling email, security, what-have-you, they can mix-and-match components from XO or from a variety of providers to put the best solution together for the customer. That is the true value of VoIP, SIP and the future of Cloud.

My EarthLink Strategy

2011-03-04T14:38:37Z

When I analyze the four CLEC components of the new EarthLink Business, I wonder what Atlanta will do with it.

Deltacom had a huge fiber network (IFN) that essentially went under-utilized. In my experience, many employees did not know about IFN. Assets like lit buildings, collocations, colo gear, and the fiber maps are crucial to revenue generation from those hard cost assets.

Essentially, Deltacom was competing on price in the T1 space. It's two core products - Metro-E off IFN and the MVNO - were not marketed well. It's Channel strategy was bipolar - first terminating agents, then out courting them.

Admittedly, I did not have much experience with ONE Communications. Based in the Northeast, it was a regional CLEC that did not have a strong brand; a market differentiator (like Deltacom's MVNO); or a powerful sales force. After the integration of CTC, Choice One, and Conversant, it was touting almost a billion in revenue, 700 collocations, etc. The purchase price of $370M including paying off the $285M of debt means that $800M in revenue sold for $85M. 160,000 business customers went for $85M, which is an acquisition cost of about $531 each.

When ONE talks about 10,000 miles of IOF fiber, it is talking about inter-office fiber between collocations ordered via a favorable inter-connect agreement with the ILEC. Although this IOF does mean that there is a solid network connecting the 700 colos.

STS Telecom was once a large UNE-P shop. Now it is a Broadsoft based VoIP Provider. This purchase by EarthLink was the quietest. STS is supposed to provide $15M in revenue to ELNK this year. It makes me wonder what the New Edge AX partners like Simple Signal do. STS telecom does provide ELNK with an experienced Hosted PBX team. That is certainly something that can be leveraged across the merged entity.

New Edge Networks does an adequate job of sticking to its knitting of DSL. It was shadowed in the last year by the Megapath deal. In fact, it has been all Megapath news that I have seen in this CLEC sector. NEN seems to be missing the boat on G.SHDSL. For a company that relies on its copper plant access, it seems to be missing the boat on Mid-Band Ethernet as a means to jump the T1 chasm and compete in the business bandwidth war.

New Edge has a good channel strategy with no channel conflict.

Launching the AX platform was a great positioning move. Following the idea of the smartphone apps stores, the AX was a chance for cloud partners to offer services on the New Edge Network in a "private cloud". Much different than the public cloud approach of so many today. It needs to add a number of partners in the data backup/storage space, merchant credit card processing, POS and business applications. I don't mean a connection to Salesforce, but more like practice management software, point-of-sale software, and other applications that are business process requirements for companies.

New Edge has a strong retail presence, showcasing itself as a PCI Compliance expert. It could take this a step further. Taking Skype's idea of partnering with Citrix for conferencing, NEN should partner with Citrix for POS software. Then when the bundle includes POS, merchant card processing, a SIP trunk and video surveillance over the MPLS network, agents can offer a turn-key solution for the retail sector that New Edge Networks already chases.

This integration of 4 CLEC's will be about how well the final entity, EarthLink Business, can leverage its assets: current customers; fiber network; collocation footprint; and channel partners. The back office system integration is another story and will certainly make the rest of this year uncomfortable in many areas: ordering, billing, provisioning, and commissions - while all of it moves to one system.

The future of EarthLink Business depends on whether they come to market with the same old products that ONE and Deltacom struggled to sell or if it develops new product offerings and bundles that will stand out from the CLEC competition. Brand Relevance is the key to the future. PAETEC attempts this with energy and MSP plays. With PAETEC, XO, Megapath, AireSpring, Windstream Business, Broadvox, Level3 and more all clamoring for business, EarthLink needs some unique ideas.

Deltacom hasn't marketed its MVNO play. Moreover, it is a move that Cbeyond was first to market with; now Tele-Pacific is also selling. Yet, it is a start in the business bundle program. The question becomes What next?

Like Cloud, Unified Communications, and Convergence, the CLEC space is filled with me-too offerings. Not just the resellers either. Even the facilities based CLEC's offer the same boring products that they have for years. Calling it a Dynamic T1 or IP-Flex doesn't make it sparkle. At the end of the day it is a T1. And we are near the death of the T1. To the business owner cable broadband speeds are faster and cheaper than T1. Is a T1 even adequate for a business that is moving deeper into cloud apps? And how significant is Internet Access to a business today?

Thousands of collocations when you count Deltacom, New Edge and ONE. That's a large copper footprint for Mid-Band Ethernet to reach a large footprint of businesses (prospects). But what is the Value Proposition?

After spending two days at Enterprise Connect where everyone was shouting UC, Cloud and Collaboration without being able to define it, clarify it or make it concrete in any way, I feel that too often in our industry we forget that we need to stand out - like a Kindle or a Prius - and have a tangible benefit and value to our intended target market. Another example, if your press release is titled Enterprise offering, then you should not be talking about businesses with less than 250 employees. It's confusing.

This is a perfect opportunity for EarthLink as most of the big boys are also integrating acquisition (Windstream, Qwest-CenturyLink, Paetec). It's a chance to be loud and stand out. (By the way, I would love to help you figure it out. I have plenty of ideas how to go-to-market; on bundles; on channel; and on sales strategy. Call my office at 813-963-5884).