On Rad's Radar? - voip Archives

No Traction in Hosted PBX Market

2012-05-25T12:18:09Z

According to Insight Research, independent hosted PBX providers should be able to take some small business market share from the Duopoly over the next five years.

The small business market size is more than 40 millions lines, says Robert Rosenberg, INSIGHT Research president. That will mean even more hosted PBX seats since lines and seats are not 1 for 1. "Our study suggests that thus far, small businesses haven't quite latched on to this new technology so the revenue today is only in the range of one-half billion dollars, but by 2015 hosted services will be nearly a $1.2 billion market and the adoption rate of the hosted services by small businesses will accelerate," Rosenberg concluded.

If the US Hosted PBX space is just $500M, I think that they have calculated wrong or at least not taken into account the hundreds of smaller providers with less than 5000 seats. Phone.com, Pingtel, Flat Planet Phone Co., FreedomVoice, PBX-Change and many, many more providers that you find at ITEXPO and elsewhere.

All the research I have seen states that Comcast is hands down the winner in the US Hosted PBX space with about 300K seats.

8x8 is now reaching $100M in revenue with ARPU of $244 on its 27,000 business customers.

Smoothstone is now West IP Communications after a $120M bid. Smoothstone is probably at $40M in revenue.

M5 Networks, recently acquired by ShoreTel, is doing $48M in revenue.

Telesphere, a member of the Broadsoft-based Cloud Communications Alliance, is doing about $30M.

Admittedly, most Hosted VoIP companies are doing less than $4M in sales, but if you add up hundreds of them at $4M or even $1M, you get to $500M fast. I already listed over $300M in revenue, so that $500M might be low. Still even if it was $1B in pales in comparison to US wireless revenue of $335B in 2012 or fixed network voice revenue that is about $132B or even the $38B in broadband access revenue. [carrier revolution from TIA study]

A Lesson in Value Proposition

2012-05-24T02:41:02Z

This came across my twitter stream this week:

"Must-read for founders: A VC explains how to build a killer value proposition" on VentureBeat by Michael Skok, a Venture Capitalist at North Bridge Venture Partners. His slideshare page contains a couple of really good decks of information about Go-To-Market and Value Prop - two things that I help companies address in this industry.

That's his Go-to-Market diagram.

A Value Proposition is created by filling in these blanks:

For (target customers)
Who are dissatisfied with (the current alternative)
Our product is a (new product)
That provides (key problem-solving capability)
Unlike (the product alternative)

When he asks (in slide 20) "What is your compelling breakthrough?" I think about Hosted PBX companies. None of them have any special sauce. If 400 of you have a Broadsoft, it comes down to a few variables:

sales execution and marketing acumen;
technology proficiency to get all the pieces of UC to work smoothly;
onboarding success, which means customer service too;
integration services with other tech for the customer;

When I look at Agents, the same applies. You don't really have any special sauce either, so to stand out you need to either be great at sales, marketing, customer service, or product knowledge, but really a combination of these.

For Master Agents, it will come down to culture and tools that they develop.

Skok says something that Seth Godin preaches: "Ideas are worth little to nothing without: People to execute; Culture to select the right people; and Vision to attract the best stakeholders."

The Incumbent Mindset

2012-05-10T18:02:28Z

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

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

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

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

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

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

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

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

That Seth Godin always gets my mind going.

VoIP Termination Squabble

2012-05-07T19:05:35Z

On April 5, 2012, Sprint filed a petition for declaratory ruling raising a number of issues concerning the applicability of tariffed access rates to Voice over Internet Protocol (VoIP)-originated calls. (Issues that the FCC should have already put to bed!) Basically, "Sprint is asking the FCC to decide whether it should pay CenturyLink for VoIP long-distance traffic. The question stems from a long-running federal lawsuit - filed in Nov. 2009 - CenturyLink filed against Sprint to enforce access tariffs on VoIP-originated calls." [fiercetelecom]

One of Sprint's points is: "because the VoIP originated traffic is jurisdictionally interstate, intrastate access tariffs cannot impose compensation obligations with respect to that traffic, even if those calls originate and terminate in the same state."

This issue was sort of addressed in 2010.

Kelley Drye explains it: "On February 18, 2010, a federal district court stepped in to fill the gap left by the FCC's silence on the issue of whether transmission of Voice over Internet Protocol ("VoIP")-originated calls is an information service exempt from access charges or a telecommunications service subject to access charges. The United States District Court for the District of Columbia in PAETEC Communications, Inc. v. CommPartners, LLC held that the transmission and net protocol conversion of VoIP-originated calls is an information service not subject to access charges and that a tariff imposing such charges is ultra vires and lacks legal force."

VoIP Logic points out that "the Court supported application of the FCC's $0.0007 reciprocal compensation cap, an amount to be paid for local traffic exchange between networks."

Other rulings have conflicted including the Pennsylvania PUC ruling. More importantly, "U.S. District Court for the Southern District of New York reached an opposite conclusion in a suit pitting VoIP provider GlobalNAPs, Inc." against MetTel on March 31, 2010. "While acknowledging the findings in the CommPartners case, the court found that an inability to apply the tariff regime as did not preclude MetTel's entitlement to recover in equity for costs it assumed in terminating Global's traffic, and concluded that GlobalNAPs was not entitled to "unjust enrichment," e.g. was required to compensate MetTel for access." [VoIP Logic] GlobalNAPs petitioned the FCC for a ruling in 2010. The FCC has waffled as per usual.

They even waffled within months of each order. In October of 2011, this order was released with the Connect America Fund order. Then on April 25, 2012, the FCC released a revised Connect America Fund Order that revised the ICC/USF Reform. This order "permits local exchange carriers (LECs) to impose higher charges for originating intra-state toll calls that begin or end in VoIP format. Previously, in its USF/ICC Transformation Order the FCC determined that effective Dec. 29, 2011, originating access charges for such intrastate toll calls would be capped at the level of the LEC's normally lower interstate charges." JDSupra continues to explain, "The FCC's new decision establishes a transitional rate rule, under which intrastate VoIP toll traffic will be subject to intrastate rates for approximately two years." It all comes down to tariff rates, which, contrary to popular belief, can be updated at any time by the carrier and just need to be filed to be effective. (So when they hide behind the tariff, they are just saying they don't want to.)

If you are confused, you are not alone. Hence, why Sprint is petitioning the FCC. Maybe some day it will finally be settled.

Transactional Agents Called Names

2012-05-04T15:56:44Z

Over at CP, the transactional agents are being called Prostitutes and Zombies in opinion pieces. I find that sad considering that the Zombie comment comes from a guy who whined because he couldn't make huge commissions off call centers any more.

The one thing that most of these opinions neglect is that the World of Telecom is all about Transactions. It is a business based solely on Arbitrage.

Going back to the Golden days of Long Distance, newcomers (the IXC's like MCI, Sprint and Qwest) entered the market by starting a price war. It continues to this day.

Every CLEC that enters a market does so by undercutting the ILEC. Rarely has this been done with any innovation. Even the DLEC's that launched the DSL market in 1999 - Covad, Rhythms and Northpoint - disrupted it with old Bell Labs technology. Bell Labs had discovered DSL technology in the sixties but did not introduce it until 1987. DSL wasn't standardized until 1998. Their whole schtick was to undercut the T1 market.

Hookflash pointed out today that not much has changed in telephone since 1876. Layer 1 may have changed from copper to fiber to radio spectrum, but voice is ultimately the same.

Even VoIP is just another example of arbitrage. Phone.com and other VoIP Providers - most notably MagicJack and Vonage - constantly talk about the cost savings of VoIP, using the technology as simply a replacement for the POTS line.

If you can sell it online, it is Transactional!

As a nation we might have been better off NOT breaking up AT&T. Bell Labs was a national treasure of research. And, look, the gang is back together. The Death Star still flies.

So when you jump on Transactional Agents, take a good look at your own business. You probably market on Saving Money. Where's the Value in that?

And don't give me the "It's how we get their attention" dribble. This industry is in a race to zero. It's the Wild West of prospectors looking for short-term gains -- and I don't just mean just the newer providers. Look in the C-Suite and the Board of Directors at any ILEC or CLEC. All they care about is short term gains.

So who is really the Prostitute here?

The CEO (and his other C-Staff) who lies to the FTC and FCC about a merger and cries about it later, because they didn't get their bonuses?

The Congressmen who take trips, meals and money to stay in office to maintain the status quo?

The CEO of a yet-another VoIP company, who is just out to grab some market share with an Asterisk-based switch?

Just because you sell some cloud services, doesn't make you a non-transactional agent. When you take a customer's telecom spend from $500 to $650 per month by upselling cloud, then you can say it. But if you take $500 per month in spend and shrink it, you are just as transactional as the Zombie - you just color it different.

Cable has come storming into this sector with nothing more than a price gouging grab at market share - which is strictly Transactional!!!

We are all going to suffer because of the Arbitrage mindset. Commissions will decline right along with price. It will be harder to make a living. It will be harder for the LEC's to hit revenue, so debt will cost more, eventually leading to BK.

We have too many players in this Industry and not nearly enough that are innovative or add any real value. And many that barely make ends meet. All of that just adds to the price war, which leads to more transactions.

So who are you calling names?

What Competition?

2012-05-01T20:19:21Z

In this article about independent ISP's fading away, CenturyLink talks about competition of ILEC DSL - from cellular 3G/4G, muni Wi-Fi, and cable. There's also fixed wireless in some ares from independent ISP's, but that is mainly in areas without competition.

But competition is a myth today. VZ is co-marketing with cable now. The Duopoly isn't even competing any more!!!

According to Akamai's State of the Internet report, "The U.S.'s average connection speed is 5.8 Mbps -- a 14 percent increase from the previous year." That's thanks to FTTX and DOCSIS 3.0 mainly.

BTW, Customers prefer flat-rate pricing in study after study.

"In other words, the broadband cap may have less to do with managing congestion on Comcast's data network than with making over-the-top video services like Netflix and Hulu unattractive for heavy television users who are the most lucrative customers for Comcast's paid video services."

Would we even have a cap if we had true competition? Probably not.

With consolidation in the telecom industry, there aren't many players left. In many markets, it's ILEC versus cableco, except where they are co-marketing! Lots of OTT (over-the-top) but I'm not sure how much longer they are allowed to survive.

In the B2B space, lots of consolidation, but cablecos are buying up market share with cheap pricing. It's interesting, because I'm not sure how much longer the nationwide CLEC will be relevant. Everyone is competing for the same dollars: federal and state government, Fortune 5000 and Enterprise, and the multi-location customers. These are a limited supply - maybe 110,000 customers??? But in the small business space there are 5.2 million businesses with under 20 employees! Who services those accounts? That's where all the growth and opportunity is. Unfortunately, broadband and VoIP have cannibalized the pricing structure in this market. It will have to be a bundle of more than data and voice that wins here.

It's also expensive to market and sell to this space - and to support this space. That means it has to be more than voice and Internet, so that the monthly recurring is high enough to rate the work required. We'll see who steps up there.

WOW! to acquire Knology

2012-04-27T19:04:02Z

More cable consolidation. Southeastern Knology is being acquired by WOW!, WideOpenWest LLC for about $1.5B with debt.

"The acquisition increases WideOpenWest's customer base and will help give the operator more leverage in programming contract discussions with content providers." This statement makes sense - scale and scale.

"WOW is paying about $1,875 per customer relationship," according to Bloomberg.

"The combined entity will have over 800,000 customers, and its products and services will be available to more than 2.8 million households in 13 states," according to the press release.

Knology offers Hosted PBX and Knology Matrix, our fully-managed direct-to-the-desktop solution (which looks just like Hosted PBX.)

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."

Some VoIP Moves

2012-03-12T21:33:04Z

Craig Walker, Grand Central's co-founder, is jumping back into the VoIP space, according to his tweet (and the TechCrunch article that had to follow said tweet).

"LogMeIn's free screen sharing and online meeting service, join.me, just added free internet VoIP conferencing to make quick, ad-hoc collaboration even easier from virtually anywhere in the world. The new, free VoIP service provides join.me's millions of users with high-quality Internet calling from their PCs, Macs, iPads, and iPhones. As result, join.me's millions of users can verbally and visually collaborate with up to 250 friends, colleagues, or customers at a moment's notice." [marketwatch] AH! More free! It's what the public craves.

Speaking of free, many of you are Skype users and like its video conferencing feature, but I think Google Hangout is better. Why? Have you ever had to walk someone through installing Skype? (Or Webex for that matter?) Googel Hangout is as easy as Google chat and can be done on the fly with video from G+. Hit me up: Peter Radizeski @ G+.

So I canceled my Webex account. Why? It only records in the webex format and, despite what the rep said on the phone, there isn't an app (that I have found) that can convert webex to mp3. To view the wrf format requires a download and install of a webex player. That doesn't work. So with G+ Hangout and FreeConference.com, I'm out.

Counterpath's Bria is everywhere. One of my clients now offers it: By downloading the CounterPath Bria app from the Android Market, you can set up a FreedomIQ softphone for work on the go. The only thing you'll need is a Wi-Fi or 3G connection. There is also an iOS app (of course).

UPDATE on some Video Conferencing

Greg Plum is launching the channel at StartMeeting.com. Good luck! Stay tuned for an interview with him this week.

VidTel has been getting plenty of noise from CRN, Andy and Larry. Why? VidTel is making it easier and cheaper to inter-mingle your video conferencing. Skype to Lifesize. "It means that Vidtel's service will work using consumer-grade video conferencing on Google Talk or Skype and high-end equipment from Polycom, LifeSize, Cisco and other video conferencing services. Since Vidtel's video conferencing rooms are based in the cloud, users can be up and running on group video calls in little time." There has been lots of noise about vieo conferencing for a while. Maybe this time it means that I do have to shower, shave and dress before getting to work, since I will be video chatting.

iPad, MDM and Other News

2012-03-09T15:12:30Z

Bandwidth.com bought DASH Carrier Services and renamed it inetwork. Apparently, inetwork is doing gangbusters in the wholesale VoIP space, the largest arbitrage space left, I would imagine. It's the new LD. inetwork offers origination, termination, e-911, SMS and toll-free. The cool thing is the TelcoTranslator that they launched to help with all the acronyms.

Birch has bundled credit card processing with its SMB services. Smart for the retail space. They might want to add 3G/4G redundancy to that. Oh, and I sure hope that are working on PCI Compliance.

So Apple's ipad3 is out. In 4Q the iPad outsold PC's in number of units sold. TDmobility told me that the future is in mobile devices not in PC's or laptops. (Netbooks and tablets are considered mobile devices.) But what is a telecom or pharma sales force supposed to do with the iPad after they plunk down $500 a piece for 50 or 100 of them? Speaking with Jody Haneke last night, it's all about interactive apps that make the sales presentation come alive. (That's what Haneke Design does here in Tampa Bay, home of some great mobile marketing talent.)

The big thing, according to both Haneke and Charles Kriete at TDmobility, is MDM: mobile device management. MDM involves more than just inventory tracking of mobile devices. It includes remote wipe, anti-virus, virtualization, application control and more. If there was a managed service that Agents would want to jump on early, MDM would be it. It only takes 50 or 60 phones to be worth it for a business. There is also room for just mobile security management. The threat to mobile devices is huge. Imagine a virus turning your phone into a surveillance device!

Rumor Mill: is DT bidding on EarthLink? Tata and Vodafone are bidding for Cable & Wireless.

I Can Do It Myself

2012-03-06T14:37:09Z

I hear this all the time: "I can do it myself!" Backup solution? No, I'll build one myself. Outsource your email? No, I can run my own email server. White-label VoIP? Nope. I'm going to spin up an Asterisk box and use that.

You think I am kidding, but I'm not.

Yesterday it was: We needed to re-do our Broadsoft portal. After shopping around, we decided to build it ourselves.

It makes me wonder about a couple of things:

Are you a hobby or a business? A hobby is when you like to tinker with technology. A business is something else.

Do you know what your time and effort is worth? It takes a lot of time and effort to build a solution, maintain that hardware and software, and support it. Add in licensing, backup, redundancy and security to that budget number. Factor in that while spending your time and effort on Building Your Own, you could have been doing something else -- some other priority, some other revenue generating activity, or personal time.

There is always a debate about buy versus build. There are many reasons to buy: faster to market, outsourced skill and support, no CAPEX, knowledge base, etc. Yet there are reasons to build: you want more control, special features, proprietary, etc.

In today's world, where most service providers don't market very well or brand themselves (or their servcies), buying is the way to go. Why? It isn't about you or what you want. It's about your customers and what they want. It's a speed to market. It's about capturing wallet. And you can't do all that by yourselves. You just can't.

When I examine VDI, VoIP/Hosted PBX, UC, backup and conferencing, there isn't any special sauce being pitched. To the marketplace, it's one big nosie box about the tech and its features. That's why it doesn't sell fast and that's why you don't have to spend the effort building your own (in my opinion).

Can you put a competitive service together that your customers will be happy with in the most efficient manner?

Don't look at the cost (unless you factor in your time saved), look at results.

Wi-Fi Only Phone Service?

2012-03-01T16:21:00Z

Would that work? Wi-Fi only phone service? Bandwidth.com has launched Republic Wireless (about 19 months ago I guess). It is an MVNO of Sprint but the cell network is the back-up service. Primarily, the VoIP runs over any available Wi-Fi network to keep costs and quality down. ARS has a review here. ARS isn't happy that only one phone is available.

Not for nothing, if the cell phone you currently use has Wi-Fi capability, there are number of apps that allow you to make VoIP calls from yoru cell phone utilizing an available cell network (2.5G/3G/4G) or a Wi-Fi network. This isn't anything new. It's just another way to package an MVNO and arbitrage the service.

What About Selling Cloud?

2012-02-21T15:55:02Z

At The CPZ, the rest of the panel were cloud guys (VAR's and Hosted UC). This is a snippet of the conversation where the panel is talking about how transactional telecom sales are dead, long live the Cloud!

People deemed LD dead years ago (like when MCI went BK), too, but there are still a large number of agents and resellers making money on LD and pre-paid calling cards.

Until TDM is retired, agents will still be selling POTS, DSL and T1 - and making a living doing so.

Here's the problem with selling Cloud (other than the fact that cloud providers keep screwing commissions to agents):

The sales process is different! Selling replacement telecom services is not the same as selling managed services (like cloud and IT). How different? The conversation, script, questions and prospecting for IT is distinct. The buyers may not be the same. Sales triggers are dissimilar. It requires sales and product training.

I worked for a Novell VAR from 1996-1999. The sales trigger was when something broke. In telecom, the sales trigger is usually the end of the contract, because the penalties for leaving early are huge. Other sales triggers for telecom: expansion, moving, or a shift in IT (i.e., more bandwidth needed because of VoIP, Citrix or backup).

Dave makes a point about "do you want to be in that cheap stuff or do you want to do good by your customer". Do agents want to be in "the cheap stuff"? No. Our commissions are based on MRR. We would like it to be as high as possible. However, we don't make the prices, the carriers do, so why blame the sales force?

In some cases - like government agencies -- the prospect is looking to reduce the telecom spend due to budget constraints. If I don't do it, someone will.

Back to being mad about the prices falling:

Agents didn't commoditize telecom, CLEC's did. It started with the LD penny wars and has continued every since. In 1999, when Covad, Rhythms and Northpoint all IPO'ed, all 3 selling DSL nationwide against each other without any differentiation was another hit. DSL (broadband) created pricing pressure on the T1 business, which continues to erode to this day. Moreover, the Integrated T1 became a commodity long ago, again due to a lack of CLEC differentiation (branding, innovation, product design and marketing). SIP trunking came along as a "cheaper" alternative to a PRI. See how that goes?

Today, we have $200 Covad T1's and $2 per MB Cogent bandwidth adding to the price compression. So who's fault is it? (I won't even get into the companies that went through BK and really screwed up telecom with that arbitrage mindset or the fact that even as revenue diminishes debt is increasing.)

When you look at the Hosted VoIP space, there isn't a whole lot of differentiation either. There are so many players, it is confusing to the buyers and sellers. It doesn't help that so many of the providers don't know what they want to be or who they want to target. "Wholesale, white-label, retail - whatever! Just sell something!"

In the video, I make a point that no sales person is going to walk away from revenue. Well, most carriers don't walk away from revenue either - even bad revenue (no margin revenue).

Let me give you an example: there is a Hosted UC shop that really only wants UC customers, but doesn't really say that to its Channel. When an Agent brings them "small" hosted PBX deals, it is frowned upon -- but they don't say No (to the revenue).

If the carrier doesn't have a target market - like AboveNet and Smoothstone do - then it is selling against everyone everywhere. That's just stupid. Service Providers need to start thinking like fiber and cablecos: ON-Net is Good. Type II is bad.

As we get into Cloud services, we are talking bloody red ocean - everyone and their brother is a player: web hosts, data centers, MSP, VAR, telcos, cablecos, CLEC, ITSP. Yeah, that will make it easy to sell. How would an agent even do a competitive analysis?

If you want an Agent to sell your stuff, answer these questions:

Who is buying your stuff right now? (Be specific: vertical, NAICS code, buyer title)
Why are they buying it?
Why are they buying it from you?
What's your special sauce? Or where's the beef?
What questions are you asking to get the conversation going?
What was the sales trigger for the buyer? (in other words, what made them want to buy?)

If you can't answer these questions (or want to give me BS answers), this is your problem! Don't blame the Channel.

Telecom Tidbits on Presidents Day

2012-02-20T19:22:10Z

On a LinkedIn group we are discussing SLA (service level agreements) and how they do not represent uptime. If you need uptime, you need redundancy. You need to build a resilient network. Netwolves has a solution called Bonded Broadband. "NetWolves consolidates the best carriers through their Bonded Broadband product by combining four circuits of diverse types from different carriers. It supports DSL, Cable, Fixed Wireless and VSAT (and even a T-1, etc.) simultaneously. It will to operate, though at lower speed, even when it loses one of the underlying circuits. It provides a level of high availability with diversity that is unique and valuable. Bonded Broadband always includes 1 static IP for the virtual circuit."

Conferencing is a different kind of sale. It's good that InterCall has added some scripting into their FAQ. By that I mean, by provided answers to questions that come up in sales meetings, like "The majority of our meetings are audio only, how can Unified Meeting add value to those meetings?" More companies should do that.

Aastra IP phones are not widely supported by Broadsoft based VoIP providers. Aastra gets a lift since Metaswitch based EarthLink selected 6700i SIP phones for EarthLink Complete™ (hosted VoIP service).

Analysts are raving about Rogers Communications in Canada launching One Number by utilizing Counterpath's Bria softphone. Now the customer has one number on any platform - PC, Mac, mobile, etc. Rogers mentions IMS, that long ago over-hyped architecture that was supposed to solve the telecom world's many problems, as the underlying network piece. The other is the Bria software, which presents an almost Google Voice like service. "Rogers, however, isn't simply re-branding the Bria Android and iPhone clients. It's doing something far more sophisticated. It's using the underlying Bria technology to power a web-based portal that can make and receive phone calls and send text messages to any Canadian number as well as video chat with other Rogers One Number users - all at no charge and with no penalty to a customer's voice minute or SMS caps," writes GigaOM. Jon Arnold has a good look at the service on his blog too, including a post about the beta launch.

AT&T partnered with VMware to launch AT&T's "Virtual Private Cloud". I have a blog coming up about telcos and Cloud. Watch for it this week.

New to the American market but not new to the global telecom industry, One Access

They make CPE for CLEC on multi-access platforms.

Looking for a white-label VoIP company? Flat Planet Phone Company is looking for a few select partners that want to own a VoIP business and the healthy (40%) margins that come with it.

I get press releases because PR folks like to make me annoyed daily. What really gets me is how many make outrageous claims like free calls and no more cell charges: "Zipring works with every phone and turns any smartphone into a free or cheap calling phone. It supports all SIP-enabled devices and does not handcuff users to Zipring software. It also turns any iPod Touch into a smart phone."

Carbonite has some cool new ads to sell online backup [from Adweek]

XO Communications Inc. launched a three-year strategic plan in 2012 that involves streamlining its product offering, including eliminating most TDM services.

The FCC has a lot on its plate and wants to close some dockets. FCC's Genachowski Tells Congress He Will Consider Closing Title II Docket, which proposed to reclassify Internet access service as a telecommunications service subject common carrier regulations.

I emailed my list this post from L3 this morning. How Kodak is just like POTS.

So Can You Re-Use Those Cisco Phones?

2012-02-13T19:14:55Z

From a VAR:

"At the risk of sounding like sour grapes, in my experience no one who has tried to use old Cisco phones and bring them current with their Smartnet coverage so they can use them on a new call manager has saved money. The sad part is they won't know until each phone's current software level is individually checked to find out how much it will be and that won't happen until they are installing the system which is after the point of no return."

"I have heard that Cisco has received a lot of negative press and attention with this strict sequential updating process and has created a one-time "forgiveness" option where [your customer] may be able to update existing phones at substantial discounts. Any "new" purchases of used phones will be subject to the full upgrade process making used phone more expensive than new. Over time a Cisco solution is never the least expensive."

It's tough when you drink the Cisco kool-aid. Like IBM back in the day, no one gets fired for buying Cisco. Until they do. I worked a project with a Private 500 firm that bought AT&T (and VZ as back up), over-spent about $10K per month. He wouldn't buy alternative fiber because they were unknown (to him). Two months later: FIRED!

I see a few firms who have a Hosted VoIP solution - maybe on MGCP, maybe on Skinny - migrating to another Hosted PBX player (on SIP) and they want to keep the phones. It's usually a mess.

As an Agent, I want to be truthful to my clients, so I tell them upfront this isn't going to be pretty or may be a cluster. However, when other agents or another Hosted VoIP provider comes along and says, "That's not true." What can you do? Well, I usually ask, "How much experience do they have migrating customers over? How often do the phones keep working? Can my client speak with one of your customers that did keep their phones?" You have to have the right questions for all scenarios.

Cheaper seldom is.