What happens with Broadview Networks under Windstream? Windstream is only midway through its integration of EarthLink. It will now have 8 UC platforms.
That isn't too confusing to all of the sales channels. Eight to choose from! WIND should be a one stop shop for everything UC and SIP at this point. [Similar to VARs hitting up a VAD like SYNNEX for many of these same vendors.] To do that, WIND would have to hire in some name brand SIP Experts to start beating that drum - loud, clearly and often. Currently, the message is a new flavor of UC every webinar. No over-arching
The noise about T-Mobile and Sprint merging is getting louder. Here's the problem: Recall the mess that the Nextel-Sprint integration was. This will be worse. Why? T-Mobile didn't even really integrate MetroPCS. What synergies are there really? It would simply be to get bigger, not to be a better competitor. For at least 24 months, VZW and AT&T would simply kick its ass - and they wouldn't be able to do anything about it.
That sums up the Level3-CenturyLink merger as well. That is scheduled to start in September if California and a couple other states don't derail it. This will be a mess for customers and partners alike. The product set is so different. Level3 is wholesale VoIP, international, transit and transport. CenturyLink is consumer, small business, mid-market, broadband, voice and some cloud. Very different sales skills.
Both exited data center, but CenturyLink has acquired many cloud and security companies in the last few years. They haven't done much with it because they don't really sell to Enterprise like they would need to. Plus Branding. Plus confusion over at Savvis after that acquisition.
None of that factors change post merger. None. One problem with many of these telcos is that they don't bring in fresh blood. Frontier just hired from Verizon for VP of sales and retention. Pull in someone from outside telco. The biggest hurdle: Culture. Culture eats Strategy for lunch.
Most of the major CLECs are gone: XO, EarthLink, Level3. Others are transitioning: TPX, AireSpring, Birch, Mettel to try to figure out what business looks like with network resale and managed services. It is a different world.
Everyone was betting on UC, but most couldn't get over the deployment headaches. Then when the price war started, they not only weren't prepared for the war, but couldn't or didn't get into it. The latest top 10 leader board for UC doesn't look too much different than 2015 or 2016. Next year it will for certain.
Windstream and Charter should look different in 2018.
Cisco's Spark revamp at EC17 coupled with its latest acquisitions and lay offs might have an effect on Cisco UC seats later this year. Or the acquisition of West Corp by Apollo Management for $5B and change might stall sales. Some of Cisco's other partners - like FLTG in NY - also got acquired. Integration after acquisition always affects sales (and retention).
AT&T and VZ look to be big winners while the CLECs shift and transition. Some of the other players in the space - like Zayo and GTT - also made acquisitions. But are they really replacements for Ma and Pa Bell or even WIndsream, Level3 and C-Link? They have a window of opportunity that is for sure.
Zayo grabbed ELI and Integra. All of the press is about fiber to the tower, so I am thinking that will not be a C-Link or WIND alternative.
Comcast will pick up some business. At $6B in CLEC business revenue now, it almost surpasses most of the CLECs in revenue. They need to take some friction out of the quoting and ordering process. (Charter too! Unbelievable that at its size, it is so arduous to process quotes and orders.)
Until the next merger is announced this is what it will look like. The channel often went to CLECs because of channel friendly attitude as well as suitable product set. This time round the channel will be looking at companies NOT in the midst of turmoil. Ease of doing business will be relative. Just another reason businesses like using channel partners: so they don't have to deal with it!
]]>As I watch Hurricane Matthew, I wonder how many elderly and infirm still have POTS lines.
Verizon workers can now be fired if they fix copper phone lines for DSL, according to reports (and HERE). Verizon wants people to buy fixed wireless and 4G LTE-A in place of anything copper.
Certainly, VZ needed the money when it sold off VZT in Cali, Texas and Florida to Frontier. It had to pay the FCC $10B for spectrum - and that is what the sale price was to Frontier. But it wants out of the union labor based telco business. Buying Yahoo and AOL is a way to be a mobile and entertainment business. So copper has to go.
Windstream is using copper for G.Fast and VDSL2 in Project Excel as it beefs up broadband in its ILEC regions. Their ARPU is up, which is what they need - to pay for the upgrades AND to keep Wall Street happy AND to pay down debt.
AT&T uses copper for VDSL2 for the now retired brand U-Verse. "AT&T notes that "AT&T Fiber" may not actually mean fiber -- the telco noting that "under the AT&T Fiber umbrella brand we will use a variety of network technologies." That's likely to include wireless broadband, and should it ever come to market, AT&T's AirGig initiative which utilizes power lines." [DSLR]
After Google Fiber finished up its acquisition of WISP, WebPass, it started thinking about fixed wireless in places, instead of always actual fiber. Why? It got exhausted trying to jump through hoops with local governments for rights of way, pole attachments and more. Then there was the matter of the electric companies who also own poles. And finally dealing with the ILEC, who also owns poles, and who along with cable was suing to slow it down. Louisville being a good example.
Google Fiber reminds me a lot of Covad and the DLECs (and Earthlink's Muni wi-fi project): Good idea, poor execution, no telco experience, learning the lessons all CLECs know the hard way: ILECs will screw you to hamper competition. So will cable. Monopoly mentality just can't be changed.
It would be nice if the copper plant could be rolled up into a nationwide REIT (similar to CS&L), so that EoC, DSL and T1s could still be utilized by alternative carriers. It is the one thing that other CLECs find a use for XO: EoC. We'll see how it plays out.
]]>Intermedia was the first. They ended up selling to MCI due to the amount of short term debt that was due. (Reminder: don't acquire companies using an AMEX card!)
PAETEC hit a billion and sold to Windstream.
Cbeyond only made it half way there before looking for a buyer. Eventually Birch bought them.
EarthLink hit a billion. That is all. Tried a lot of stuff, not a lot worked. Today they are making a niche play in retail, while trying to figure out what to do with the fiber network.
XO hit a billion and became totally irrelevant for a long while until Verizon decided to buy them. That seemed to ignite a fire in the belly of XO.
Covad and other DLECs tanked quickly after Big IPO's, because it was just too difficult to navigate the waters of telecom (especially without a C-Suite with that kind of domain knowledge. Next time hire a former SVP or EVP from a LEC!) Google Fiber is seeing those same problems, stumbling its way to less than 250K subscribers in 5 years of labor and marketing hype.
In Jim Collins Built to Last, some of the elements to lasting success are Culture, BHAGs (vision and goals) and home-grown management (talent development). It has to be about more than the race to a billion.
I see this with UC and Cloud companies. Many of them on a race to a Billion. It should only be a race to get 25,000 profitable customers. Then 35K, then 40K, then 50K. And that will be a big business right there.
But NO!!! It has to be a Unicorn! What a stupid attitude. I see it over and over. I want thousands of partners. I want to sell from 1-1000 employees. But the clock is broken. The systems and procedures suck. There isn't a culture of excellence.
Heck, even college athletics departments know about building a culture of excellence.
I can see a couple of the big UC companies struggling and eventually failing. It isn't about what can you sell. It IS about what can you Deploy and Support!
The process to deploy 20 seats is NOT the same as the process to deploy 500 seats.
BE A CLOCK BUILDER, NOT A TIME TELLER - Jim Collins
]]>Do business consider this? Not often enough. As a telecom consultant, it is my job to point it out to the business decision maker. How much is an hour of down time worth?
Last week, Comcast suffered a massive voice outage nationally. Windstream, CenturyLink and others have all had widely reported outages this year. Outages happen more often now because of a best effort mentality. No more five-nines.
Hacks happen every day. Unprotected computers are infected almost immediately. No one thinks it will happen to them. It is the hurdle in selling security (and insurance). Why worry? It won't happen here.
Ramsonware is scary. It is occurring more often. A smart backup can alleviate some of the hardship.
Business Continuity (BC/DR) is becoming more important for businesses every day if they recognize it. One indicator: do they utilize battery backups everywhere? Then start the conversation there.
SD-WAN will solve some security, fail-over and BC issues. It might be time to learn about how.
On the carrier side, AT&T is going deep into SDN and NFV. AT&T is releasing their SDN software, ECOMP, to open source. They are talking about being able to use white box CPE globally. Via 4G that CPE will download the necessary software to be a router or firewall or what-have-you.
TelePacific Rolls Out Advanced SD-WAN Connectivity in Nationwide Pilot.
SD-WAN is fueling 150% growth at Aryaka.
Verizon is partnering with Viptela to offer a hosted SD-WAN service.
Masergy, XO, CenturyLink and Mettel - even Vonage - have all added SD-WAN overlay services. Don't you think you should know what they are when your mid-market clients ask?
Join us for another Blab! about SD-WAN on 8/3 at Noon ET.
]]>By 2012, half were gone, swallowed up by acquisitions. [CBEY-Birch, Qwest-CLink, Paetec-WIND, L3-GX, L3-twt, Zayo-ABoveNet]. Today, with XO going to Verizon next year, there are really only a handful left. And they don't look like what a CLEC looked like 6 years ago.
Wireline Copper is in decline in large part to fiber, Google and cable, but to no small extent by the ILECs not wanting to be in that business anymore. They don't have to share fiber assets like a UNE. They do wholesale it, but since the ILECs are getting beat by the cablecos, the wholesale ILEC fiber isn't an awesome deal.
Buying wholesale from cable is resembles punching yourself in the face. They don't want to sell wholesale. I have heard this from them repeatedly. They make Verizon look like a generous wholesale partner. They will snake your customer out from under your contract. )I have heard these stories repeatedly as well.)
After you have done this for a while, you want a change. Who wouldn't? Telco is to gastroenterology what candy is to dentistry.
TelePacific has made a shift. With its acquisition of DSCI, TelePacific is taking managed services, UCaaS and SD-WAN nationwide. I have been known to say, Layer 1 or Layer 7 - either own the network or own the app. With managed services, UCaaS and SD-WAN, TPAC is betting on being a business technology partner at Layer 7 (of the OSI Model). Congrats, to one of my favorite clients (for full disclosure to my readers).
The other final pivot occurred in Atlanta, where EarthLink "acquired Boston Retail Partners, LLC ("BRP"), a highly regarded management consulting firm focused on the retail vertical. BRP's experienced consultants work with leading retailers to deliver strategic solutions that address the business and technology challenges unique to the industry." This might be the final note of the retail song that ELNK has been playing. Retail is a vertical they decided to attack and own and this might be the final piece needed.
It reminds me of CapGemini a little in that CapGemini is a consulting firm that partnered with VMWare and their AirWatch division to offer mobile desktop mixed with MDM. A consulting firm being a service provider like an MSP.
This ELNK acquisition makes me wonder if they will spin-off their network assets - Deltacom/IFN fiber, ONE Comm fiber in the northeast and New Edge Networks - to a REIT or other entity. It would make sense IF the revenue of the CLEC could stand up to scrutiny by itself. We'll see, but it is definitely a different looking CLEC. I'm not even certain that term applies to them any more.
After 28 acquisitions, Birch has a new CEO and mission for organic growth predicated on a fiber lit building strategy and Cbeyond's cloud portfolio. They still look and act like a CLEC.
Zayo is all fiber all day. Pipe, pipe, pipe. Oh, yeah we have some data center stuff from a Latisys acquisition but fiber, fiber, fiber.
And Level3 is still plugging away at its own triple play: the voice network that more than 70% of the VoIP providers rely on; a very well connected network with a top looking glass that is connected to content engines as well as enterprises, government and carriers; and fiber. The next step for Level3 is to connect their young security services department into their well-connected market. This would get them up the stack a little too.
Rumor today is that Comcast wants to buy Level3 to compete eye to eye with AT&T and VZ.
Network is the main play but no one can survive forever on just selling network - unless you have many unique routes, you run your network flawlessly and you know where the assets are. There has to be a layer beyond just pipe. That's what everyone is working on.
]]>"About 50 percent of the Ethernet circuits Windstream buys from XO, or about 32 percent of its Ethernet expense with XO is provisioned as EoC. By using XO's EoC services, Windstream can provide symmetrical bandwidth of up to 100 Mbps to business customers." So XO is a vendor for Windstream for EoC. They want to preserve the supply of EoC, not something that VZ cares about. Verizon is allergic to copper.
Meanwhile Sprint is really pushing its wireline portfolio, something that it had forgotten about for ten years. Sprint's new Ethernet strategy involves two new options -- Ethernet over Copper (EoC) and Ethernet over DOCSIS (EoDOCSIS). Sprint must have struck a deal with Charter and TWC for EoCoax is strictly a MSO offering.
This FCC complaint is just another lever of negotiations. XO used it when Level3 was buying Global Crossing. It happens often.
I'm surprised that either Global Capacity or GTT haven't stepped up to offer WIND and Transbeam EoC services, although maybe the price point isn't as low as XO was offering. Who knows?
]]>Cisco demonstrated Spark, which I thought was for SMB, but is being pitched to Enterprise especially with its big hook into Salesforce. The demo that I got at the booth was rather disappointing. Not very visual. Looked like a console.
"Cisco Spark delivers cloud-based business communications that enables customers to message, meet and call anyone, whether it be on their mobile device, desktop or meeting room end-points." [PR] Isn't this what all the UC&C platforms promise? And keep in mind that this is re-branded Squared.
Not that Slack is the end-ll-be-all, but if you can't at least offer that type of look and feel and functionality (what I refer to as UX and CX or simply user or customer experience) then what are you doing? With two million daily users in 2 years, there is something they like about it besides the way it decreases internal email that people like.
Atlassian HipChat has a similar UX. The room or container or locker or folder or whatever you want to call the holding space for documents, conversations, recordings and notes around an event - sales call, project, meeting - is about organization and working on it when I want to or can as well as a depository for everything about the event in one easy to use, share, store space. This is a long time coming - and it still needs some improvement but it is getting better.
I still am waiting for a single inbox for email, texts/SMS, IM, etc. One place for all my comms. Maybe some day. Right after SSO (single sign on), which we haven't heard about since FOWA 2007.
I did hear more talk about APIs, SDKs, and integrations. Zapier and IFTTT weren't there but maybe in spirit.
Genband had some news. It has re-organized its product portfolio under Kandy. Now fring and other products that are monthly recurring revenue are under Kandy. Genband is in a patent dispute with Metaswitch that some have speculated leads to a merger. Genband is also doing co-marketing for its customers - see here.
And XO touted that it is using GenBand for advanced real time communications. When XO becomes Verizon in 2017 that means Alex Doyle will have one more platform to deal with!
ThinkingPhones came out as Fuze at this show with a marketing campaign playing on Unified.
NETSCOUT has a platform to measure service delivery issues in a multi-vendor environment. This platform looks at Voice and video media performance; Call signaling and UC server performance; as well as Network and enablers' infrastructure performance.
One big announcement came out before the show: Switch.co re-branded as Dialpad. Craig Walker was a keynote speaker at the show. Dialpad was in the Sprint booth talking about mobility and enterprise. (They gave away nice jackets.)
Another big deal was Avaya launching Zang.io, in what at first glance looks a little like Kandy's logo (and font and colors) and at second glance looks like they are trying to put one up on twilio. It is kind of a mixture of the two. "Zang connects popular collaboration apps like Google Hangouts with business solutions like Salesforce.com or SAP for a seamless user experience. Zang comes with simple SDKs, sample apps and the ability to use other third-party communications apps, which speed adoption and value creation." (You can read the rest here.)
This either works for Avaya and they move beyond premise PBX - or it fails and they file BK. Those are the only 2 options because while telcos like Windstream still sell Avaya, from what Avaya partners tell me, it is more about old logos, not new logos. And there is too much competition in the Enterprise space. Lot of big booths (20x20 and larger) at the #EC16.
One cool toy came from Oblong. "The result of more than 20 years of research at MIT Media Lab, OblongĀ“s flagship product, Mezzanine, is an immersive visual collaboration solution defining the next era of computing: multi-user, multi-screen, multi-device, multi-location." It was a total immersion telepresence system that could be controlled by something like a Wii game controller or an IOS device. It was a nifty toy that brings Minority Report to life.
Voxbone was serving up international DIDs, right alongside Belgian chocolates and expresso! Thanks!
Yesterday (3/8) was International Women's Day, so here are some forgotten women in tech history.
Today's GapingVoid cartoon is about silos in organizations and collaboration. Ha!
]]>According to Bloomberg, "Verizon Communications Inc. agreed to buy fiber-optic networks from Carl Icahn's XO Communications LLC and lease spectrum for about $1.8 billion, giving the nation's largest wireless carrier more Internet bandwidth for corporate clients and airwaves to test faster wireless technology."
The Synergies will likely be a RIF of most of the 2800 employees left at XO, which will be a rounding error for Verizon Communications Inc. and its workforce of 177,700. Last reported income from XO was in $1.4B in 2011. Even if XO was still bringing that in - which they are not! - it is about 1% of VZ's 2015 revenuesof $135B.
Hard to make the revenue needle move much at $135B!
XO has been a mess for a long time, mainly because its owner since 2011, Carl Icahn at XO Holdings, hasn't done much with it but cut employees and spending. XO started in 2000 as a merger between NextLink and Concentric Hosting. Later XO acquired Allegiance Telecom in 2004 after recovering from a 2002 bankruptcy.
I wonder if the Broadsoft, UC and cloud business goes with the fiber. XO has 2 million SIP trunks, but all the press releases read fiber-optic business. That might be in keeping with the theme for Verizon - fiber-optic! Cut all ties with copper and just be fiber and cellular.
Also, the wording of the press release appears like an asset sale not a purchase of XO Holdings.
"Separately, Verizon will simultaneously lease available XO wireless spectrum, with an option to buy XO's entity that holds its spectrum by year-end 2018." [pr]
"XO holds 102 licenses to spectrum in the 28 gigahertz and 39 gigahertz range, which cover about 45 percent of the U.S., according to Bob Varettoni, a Verizon spokesman." [Bloomberg]
The XO fiber allows VZW to backhaul the small cells needed for a denser network for both 4G and the soon to be trialing 5G cellular networks.
Right now, Verizon is shutting down its public cloud infrastructure - and giving customers just two months to move! according to DCK. It is exiting competing against the computing giants of Microsoft, Amazon and Google. It will be keeping its private hosting/cloud - and no sale of its data center business formerly known as Terremark has been announced yet. (I would have thought that the data center business would have been sold to buy XO, since VZ already is soaked with debt.)
On the ILEC side, the sale of Cali, Texas and Florida ILEC assets to Frontier has not been approved yet. On other fronts, VZT is making the move to retire copper as fast as it can despite opposition from the CWA, consumers, CLECs and state agencies. The opposition to copper replacement comes from the Super Storm Sandy mess, when all the networks were down. Also, as copper is retired, CWA loses power and head count and CLECs lose access to customers, except through more expensive means like cable and ILEC fiber.
]]>I don't think anyone wants to buy Sprint, whose wireline - the old Pin Drop fiber Network - is only bringing in $581 million in revenue these days. That won't help offset the $33.8 Billion in debt that is hanging over them.
There is often talk about who Level3 is going to buy next. As a channel partner of Level3, I hope they forego acquisitions for another year. They have some positive movement in the TWT integration going on, good people in place - don't mess with it! They even have some interesting products like Managed SfB. Go Organic!
The cable space has quite a bit of M&A in the works with the TWC-Charter-BrightHouse deal still waiting FCC and other state approvals; Altice is buying SuddenLink and Cablevision; and folks are waiting for ABRY to dump RCN and someone to scoop up WOW!. All about scale and grown no matter what, right?
It seems all the rumors are around Comcast, Zayo, Level3 and T-Mobile. It leaves out the rest of the CLEC market - namely, EarthLink, XO, Integra, Birch. I put Windstream and CenturyLink in the CLEC puddle because while they are mainly RLECs, it isn't what they are known for.
Birch is already working on moving to Canada with their acquisition of Primus Telecom. Maybe they don't like the Presidential candidates any more than I do?! Zayo also made a Canadian buy - Allstream.
EarthLink sold off its IT business to Synoptic for $29 million. ELNK gets a small amount of cash but looses about 100 talented employees. I guess EarthLink is staying focused on the Retail space.
While there were rumors about VZ selling off the old MCI assets currently named VZB, the CFO said that was not the case. The Terremark data centers are on the auction block according to reports, but no word yet on any firm sale. But rumor is abound about Verizon buying XO, mainly for its wireless spectrum.
"XO is the largest owner of LMDS spectrum, currently [2007] worth $35.8 million, in the nation. NextLink, the wireless operation of XOHO, recently launched its broadband wireless services in Las Vegas and increased its wireless portfolio to 14 markets at the speed of covering 1 to 2 metro areas/month: Washington DC, Boston, Atlanta, Tampa, Miami, Nashville, Chicago, Kansas City, Dallas/Ft. Worth, Houston, LA, Seattle, Phoenix, Las Vegas - already more than its almost only competitor in LMDS fixed wireless services, FiberTower. The remaining large LMDS spectrum owner, Level 3, through its acquisition of Telecove." [seekingalpha] IDT also owned a chunk of this spectrum too.
LMDS operates between 28 GHz and 32 GHz and falls in the microwave sector of spectrum. For 5G cell service, the FCC may be approving this band soon. If VZ can pick up XO for $2B, that is far cheaper than buying spectrum. It would have spectrum in 15 metros to trial 5G with.
Spectrum is the new beach front property.
This makes Level3, FiberTower and IDT worth a little more.
XO's long haul network consists of a good amount of IRU on Level3's network, which would be a hiccup for someone buying them for their network instead of for the customers and the spectrum.
We should see by March if this is a go or not!
]]>First up is Sangoma. Why? Because Sangoma has acquired all the key assets of Schmooze Com Inc and all the outstanding shares of RockBochs Inc.. So Sangoma jumped down the rabbit hole that is Hosted PBX with this purchase of FreePBX and Fax over IP service. Why is this a rabbit hole? There are 2000+ folks doing this. Sangoma knows next to nothing about being a service provider (and quite frankly the FreePBX guys know how to package a business for sale). So who runs this service for the channel partners that you hope sell it? Who services it? Who installs it? Garrett Smith is bullish but I see too many companies struggling in the space as it is.
[REMOVED by company request.] Voxox has its SMS and SIP services, which 2 channels sell - a dealer network and an agent channel. This will be the first full year for the channel - catch Voxox at their booth at ITEXPO.
Birch completed the acquisition of Cbeyond on paper in July - and delisted from the stock market (no painful public scrutiny). In October, an executive team was announced. I want to see what this organization does now. I have seen Birch with other (much smaller) acquisitions where it just strips out the revenue and cuts off all the rest of the stuff that doesn't seem interesting. Remember that Cbeyond wasn't firing on all cylinders BEFORE the acquisition, so imagine now that the smaller Birch is trying to integrate the larger CBEY while going national and cloud and IT (when it used to be POTS, DSL, copper).
Panterra released Smartbox last year. It was an out of the box idea to spread the word about Panterra Cloud UC service. I'm interested in seeing if it had much conversion.
Microsoft changed the name/brand of Lync to Skype for Business. I think that was a mistake but they didn't ask me. There is a lot of noise around Lync, err, Skype4Biz in the partner community. There was confusion before on the different versions of Lync -- now with a name change and a product merger (sorta) we'll see if it gets much traction. I know Greg Plum will be evangelizing UC&C with Lync some more in 2015.
The sixth one isn't a company but an association: the Cloud Comm Alliance. Alteva had a management shake-up. Masergy seems to be doing okay. RC is the noisiest member. Telesphere sold to Vonage. So what happens to the association and the quieter members of this org?
What about the CLECs? Windstream just changed CEOs suddenly and are still trying to launch the REIT, so distractions abound for a company that can't afford it.
XO has been quiet, but the CEO sent out a letter to partners today. "Customer churn and customer retention numbers have improved substantially. We reduced churn by 23% in 2014." This metric - while some of it is not in their control due to resale, affects their brand - "Service Delivery placed additional focus on delivering circuits on the Customer Requested Due Date. The XO Business Market Solutions organization improved from 73.1% on average for the first half of 2014 to 82.4% for the last half of 2014."
The final point I took away: "XO successfully executed an agreement in Q1 to secure $500M in financing to fund the XO Connect Initiative. With that funding, we are on track to bring 177 buildings on-net in 2014 against a plan of 125, and have 800 buildings in the construction funnel." So about 177 good contracts in 2014.
As quiet as XO was, EarthLink and Megapath were even quieter. Except for a CEO change at ELNK, nothing big happening there. I think most larger CLECs spent 2014 in strategy. 2015 we will see if any of them can execute.
]]>Bright House is chasing Enterprise with its fiber and Hosted PBX service (powered by their Telovations acquisition). BHN is also involved in the local start-up scene in Tampa Bay.
XO along with Cbeyond and Telovations signed up to distribute telecom and network services through Tech Data, a global value added distributor of hardware and software in 2007. Cbeyond (now Birch telecom) and Telovations gave up early. XO tried really hard to get traction with Tech Data VARs. Since then, TD has launched TDMobility which is a cellular/mobility master agency. TD also signed up with Microcorp to be its Master Agency for telecom and network services. (This is much like CDW using master agencies instead of signing directly with carriers.) Tech Data has also launched a cloud services brokerage called TDcloud (yeah, really original). Last week, the XO deal unraveled. I'm curious how the Microcorp deal is doing.
]]>"I want to inform you that Tom Gorey, Vice President Strategic Alliances and Business Development, will be leaving XO on November 1st. Since joining XO in 2005, Tom developed new go-to-market strategies and contributed to building significant growth within the Channel at XO. Tom has been instrumental in driving the development of the foundation and programs that led to the award winning XO Business Partner Channel in place today. I would like to personally thank Tom for his contributions and wish him success in the future. Please join me in thanking Tom and wishing him well."
I worked with Tom when we were forming TCA. He really believes in the Channel. I hope he gets scooped up by someone looking to build a channel friendly program.
Word on the street is that changes are afoot at XO. Not just letting Gorey go, but also getting a new CEO while shifting the indirect channel sales support. From what I hear, more direct folks will be supporting partners.
It is a company that has struggled for years under the ownership of Carl Icahn. So many rounds of layoffs, I am surprised anyone would want to work under those circumstances. It has to be stressful - waiting for a pink slip or an S-1 filing that an LOI has been signed (then a pink slip). Just drifting along. It doesn't make for a confident choice for a partner to put a big customer in.
]]>Weaker-Than-Expected Channel Sales Impact CenturyLink
tw telecom Revenue Grows, Profit Dips
Windstream Profit Falls 22%, Business-Service Revenue Up
Revenue is up, profit is down. But for others revenue is down.
AT&T revenue is down 1.4 percent from the 2Q2012. Wireline business fell 10% from last year.
"EarthLink's total company revenue in the second quarter of 2013 was $313.4 million, as compared to $316.8 million in the first quarter of 2013 and $334.5 million in the second quarter of 2012. Business Services revenue, which accounted for 78% of EarthLink's total revenue in the second quarter of 2013, declined just 0.5% versus the prior quarter." [source]
Cbeyond's "Second quarter 2013 total revenue of $118.2 million compared with $123.8 million in the second quarter of 2012 and $119.9 million in the first quarter of 2013."
Part of the reason is that transit and transport (Internet bandwidth and private line) revenue is facing pricing pressure almost every where. That means new customers are paying less and renewals want to reduce their bills. Less revenue all around - even if the number of customers remains the same or increases a little. ARPU is down resulting in profits being down.
The ILECs are betting on Global 5000 business and cellular. CLEC's are betting on the cloud, IT services and MPLS. EarthLink saw a 22% increase year over year in these business segments. This means that it is all about the User Experience (UX baby!)
Here's the dilemma: with revenue dipping, companies cut costs. Sure automation has helped reduce head count over the last 7 years, but automation doesn't means UX! (In fact, in my experience, it is the exact opposite!) So how do you balance head count and costs with dipping revenue and increasing UX?
Isn't this kind of the same problem other industries face like book retailers, newspapers, etc.? You can't replace customer experience.
XO's CMO discussed customer experience (CX or UX), metrics and customer intimacy in this interview. (I have no idea what customer intimacy is.)
BTW, 2 studies show that the MSP model is working. Managed Services but that means UX.
]]>Tuesday night I was asked about what I teach when I am doing sales training. I said that the one foundation to sales is emotion. People buy to get rid of pain most of the time. A small portion of the time they buy for pleasure. Think about it: Groceries, baby food, medical bills, car repairs, home repairs, tuition - versus spending on vacation or shoes.
People mainly buy on emotion, then justify it after. Ever hear of buyer's remorse? That is when the emotion dissipates and they go, "Why did I buy that?"
The sales person has to like and believe in what they sell. If not, sales will be a struggle.
Sales people have to have the customer's best interest at heart -- it has to be about the customer's pain and gain, not your quota or that you have to turn this prospect into money.
Hence, why I started with Hugh MacLeod's cartoon about Any fool can sell.
There is a good article here about why many sales people will be gone soon. One reason is that the entire sales process for so many things has changed. People are more informed now. They can Google everything, including reviews and pricing - even from their smartphone while talking to you!! That means everything is a commodity. It's all comparison shopping. The sales people will just be answering questions in defense and objection rebuttal mode and being quote jockeys. That will suck!! For everyone!
XO's CMO talks about Customer Intimacy and how XO re-branded. He's right about "a balance from a marketing and product development". He's also right about "an effective and efficient sales force is the Holy Grail." What constitutes that kind of sales force is up in the air.
It's not enough to get feet on the street. You can have 4000 agents knocking on doors for your product but none of those doors may be the right prospect or ready to buy or want to buy it that way or a number of other sales disrupting factors.
It's about having a product that has a defined target audience and a story to tell about it. That story is the value, the benefit, the relevance.
Next you have to have a sales force that is engaged, knowledgeable, trained, enthused, and good at relationships.
In this hour long presentation on Challenger sales, the new sales force has to be creative. The sales force has to be selling, not just solutions based on your company's services, but how your solution (and services) is going to benefit the business, add value, produce measurable outcomes.
Something to think about. Otherwise, sell on price (and deal with a shrinking margin) and spend a lot on SEO (with a declining amount of money).
BTW, the Sales Fools in this case aren't the salespeople but the sales managers, directors and VPs that think sales is the same and can't define the targets, triggers and value propositions. The fools think that training the sales force is a waste of dollars.
]]>CDW is the hardware distributor with a full service telecom agency. Tech Data comes close with its long standing deal with XO and its TDMobility that is a cellular master agency.
And now ScanSource has partnered up with Intelisys (a master agency).
This is one more program to get VARs selling network services for carriers, something that the carriers salivate over. So far, these partnerships have not been home runs.
The hardware distributors have a model that relies on co-marketing dollars. It also relies on a vast number of VARs to put SOME of their business through it. As we move to network services and especially cloud services, the hardware folks become stickier to the VARs. Will VARs use multiple master agencies or multiple VADs for network and cloud services like they do for hardware? I guess we will see.
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