UC 360

I have been dark here for way too long. I'd like to blame "writer's block," but the real issue is probably more closely related to a deadly sin - SLOTH.  So let me try and make amends. 

June was a particularly heartening month for me -- not only because it ended our best sales quarter ever and because we added another Top 50 law firm to the Cypress client list. Coming so quickly after we happily added King & Spalding in March it gives me further validation that we are definitely onto something. We'll be able to announce the name of this firm publicly shortly...once we obtain all of the press approvals. However, I can say that the firm has over 18 locations including one in Europe, and we will be serving all of them. 

The sales experience around this client was equally affirming, a CIO who understood and embraced both the benefits of unified communications and of having it provided by a Services Manager such as Cypress Communications. We were able to provide the firm all new technology and hardware; an upgraded back-up data network and still live within their current OP-X spend budget -- magic!

And the large law firm opportunities continue to grow, as we're able to show more and more successes.

This week I am in New Orleans at the Microsoft Worldwide Partner Conference. If our recent large firm win validates where we've come, this conference dazzles my mind about where we are going. Microsoft's OCS coupled with Windows 2007 and ultimately Office 2010 is going to be a radical expansion of the unified communications capabilities that users will be able to access. And Microsoft is heartily advocating that these communications services are best provided in a hosted model. (Welcome to the party!)

I don't think I am jumping too far in front of my headlights when I say this transition--the refresh to Windows '07/Office '10 and adding OCS is going to be a transformational event for many enterprises in how they collaborate and communicate and use their PCs. (Yeah ok...I am a geek at heart!) 

And equally compelling is that the kind of functionality we are taking about being presented to the end user community requires the management of an even more complex set of applications and services than most mid-sized IT departments handle today. Businesses of all sizes will benefit from the productivity enhancing capabilities that are being made available, but many will struggle with how to deploy and support it. 

As much as I believe that the business case for hosted unified communications is completely validated today, this next wave of capability and technical complexity will cement that case for good. I sincerely believe that as more enterprises begin to evaluate the deployment of these capabilities (and their technical complexity), more and more of them will turn to folks like Cypress Communications to help make it happen. So as good as 2009 is shaping up for us as a business and in spite of the economic conditions, I think 2010 and beyond holds an even brighter opportunity for us and our current and future clients.  (<----hopeless optimist)
 

 

Rarely am I presented with such a clear picture of the disparate thought patterns that drive IT departments and their thinking.

We have been actively engaged in pursuing large law firms for over one year.   From the outside looking in, they are very similar firms--in the number of attorneys and number of locations. But the similarities end there.

Firm "One" has just signed a multi-year enterprise-wide agreement with Cypress to have us provide Unified Communications and Data Networking globally. We will be replacing an existing non-Nortel PBX infrastructure with our C4 IP Platform, and we will be providing a private data network solution. This firm will be taking advantage of the full suite of UC features, such as presence, chat, collaboration, unified messaging and mobility. This firm approached the evaluation of the hosted UC or UCaaS solution in a highly collaborative constructive and open manner, evaluating, learning and educating all at the same time over an eighteen-month period, leading to the ultimate decision point. At every step along the way there has been open-mindedness to new thinking and a desire to do what is best for the firm, its partners and employees. In short, I would have to describe it as one of the most pleasant sales experiences of my professional career. Look for us to announce this new Cypress relationship shortly.

 

Firm "Two" has been about as closed-minded and un-collaborative as I can imagine any potential business relationship being.  We have been engaged with Firm "Two" for the exact same period of time as Firm "One" except instead of being pleasant it's been much more like the March from Bataan - long, arduous, painful and destined to end badly.  And it's not that these are bad people or that they have deliberately tried to be difficult. On the contrary, the reason we probably have stayed engaged so long is that there has been the cordial nature of the relationship and at moments along the way glimmers of hope. But this organization is very set in its ways and beliefs; and those ways and beliefs do not align with the view of "things are better in the cloud" and that "UCaaS is the most efficient way to deliver the technology".  And so it has been a constant series of "Cypress proposing solutions" and Firm "Two" finding the reasons why those solutions won't work for the firm. Not because they won't work - just because they don't want it to work. It's not the way they do things.

 

That's a hard lesson for us to take home - especially when we so passionately believe in what we do and why it is the right solution and then have that belief validated by a significant new customer relationship. But no matter how right what we do may be, it's not right for everyone. At the end of the day - the enterprise needs to make decisions that make it most comfortable - and to our great chagrin - sometimes that's not the "Cypress way".

We won another award! I say "we" very deliberately. Although the award names me, it's not about me. I spend my time blogging, emailing, chatting, texting and talking about Hosted VoIP, unified communications and CaaS -- and no doubt that's what drives the public notice.  The reason I talk so much about this stuff is that Cypress and the people here give me so much to say.

 

(Check our latest award at http://voip.biz-news.com/news/en_US/2009/02/27/0004/cypress-communication-s-frank-grillo-wins-voip-biz-news-person-of-the-year-award.)

 

I have railed for months -- long before I ever started this blog -- that the hosted VoIP marketplace is filled with providers that are nothing more than "two guys and a truck" looking to make some fast money with a bare bones product and the appearance of low cost. The key word in the last sentence is appearance.

 

Yes indeed. VoIP done badly has a low cost of entrance; it also has low reliability, low capability, low customer life cycle and a very low probability of a life span much longer than a shrew!

 

In the midst of all of the snake oil and used car salesmen giving this very viable business a very bad name, it takes a lot of courage and commitment to stake a claim to providing hosted VoIP and unified communications the way it is meant and needs to be provided. To not take the cheap and easy way, but rather to dedicate an entire organization to providing carrier-class IP Telephony and unified communications to enterprise customers whose very business depends on it.

 

Carrier-class unified communications starts with the design and implementation of a world-class network and the deployment of carrier-grade switching technology and cutting-edge unified communication platforms. It means investing in end-to-end automated provisioning in addition to testing, monitoring and deploying the systems and hiring the talented people to run and manage them. It takes a sales organization committed to education and evangelization about these technologies and not just trying to make a quick buck, a visionary product management team willing to ask "why not" and a marketing group that has a deep passion in spreading the benefits of hosted unified communications.

 

Finally, an award-winning communications solution requires service and operations teams committed to impeccable delivery, training and care of our products to our clients -- which is what you'll find in the people and technology at Cypress Communications. I say that not as a boast but with pride and confidence. How else would we be serving the likes of Pillsbury Winthrop and Ascensus - to name but a few - and stretching everyone's thought limits on how viable and scalable hosted unified communications really is. In the beginning, many hinted that hosted communications were only for the select few, the small companies with few, if any, resources of their own. And now we can proudly say that we support some of the biggest law firms and financial service organizations in the world. Enterprises with thousands of users rely on Cypress Communications and our carrier-grade network each and every day.

 

So forgive me for taking a moment to relish in our successes and our latest award. It's always nice to be noticed, and it's great to reflect on how good WE really are at what we do.

 

This is dedicated to the entire Cypress family. Well done gang; we are the best!

So since my lament of over a week ago, I've been dark on here, just haven't had a muse to motivate me. That changed last evening when I reviewed the final version of the press release we sent out this morning on our new agreement with Ascensus. If I was whining about people "not getting it" last time, I need to be shouting from the highest mountain top about those who "do get it" this time.

 

I opine (often about many things) that C4 IP - our flagship product - is like a giant buffet. And those with broad appetites and tastes are the ones who appreciate it most. A small single location office of say 10 people can really only benefit so much from presence, desktop video and Web collaboration. They are much more apt to just stand up and talk to each other over the tops of their cubes. A 1,000 person organization spread across six offices is a different story. They're going to "belly up" to the buffet and try a little of everything.

 

I'd be hard pressed to find a more perfect customer story than Ascensus.  A long time customer of Cypress (for more than a decade), we've provided traditional digital PBX services at one of their larger locations. When the time came to look at a next generation deployment, they took the diligence process very seriously, which is always a benefit to us. Smart people really digging into the details are our best prospect. At the end of it, Cypress was their choice, and we'll now move to serve 100% of their needs well into the second decade of our relationship - and certainly beyond.

 

And the reasons for their decision to stay and grow with Cypress match the values we think we bring to all customers just perfectly:

Capital conservation:  The deployment of an all new infrastructure across six locations, including an advanced contact center of over 300 associates is not a small expense; and in today's environment achieving that goal while not funding an enormous upfront amount was paramount to Ascensus. We met that need - deploying "on our dime" and providing a highly predictable cost model going forward.

 

Technology Management and Integration:   I love this sale! Ascensus will use almost every aspect of our capabilities and in some cases even expand them!  Ascensus will be using the full breadth of our C4 IP platform and have us integrate it with Microsoft OCS; we'll also integrate their intelligent call routing and IVR platforms into our CS2000 to manage the inbound calling to both of their call centers; and we will deploy Call Recording and Quality Management which will allow them to not only record voice, but to capture what's happening on the screens of their associates during call and provide a platform for managing and coaching them. This isn't just some "plug and play" stuff - and having a trusted partner take on the role of technology integrator and manager makes incredible sense.

 

Business Continuity:  Anyone who knows me well - or maybe even at all - is sick of my Business Continuity shtick. But it's real - and it really matters to Ascensus. The ability to have a highly available, highly survivable solution is paramount to a business that serves its customers via phone. We will provide Ascensus with a degree of continuity that would have been very difficult and expensive to replicate in a traditional premises-based deployment, and it was already designed as part of our solution.

 

I could probably babble on for several more pages - but I'll stop here.  Let me close by saying we are really good partners, and we are really good collaborators. How else could we take a 10+ year relationship and nearly double it in size and length. We're not here to "sell you something." We here to help you succeed in your business and then succeed along with you. If you engage us in a conversation, I think you'll see that quickly. Winning one is sweet - winning the right one is sweetest of all.

 

(This is for Reed and John - thanks guys!)

So not every discussion with a customer or prospect is pleasant for me (or them most likely). One very recent conversation was quite frustrating.

 

This particular interaction was with a mid-sized firm that was comparing us to prem-based options and had decided we were the most expensive choice.  That assessment didn't sound right to me, especially since I was very familiar with the competitors they were considering. However it is very typical for a potential client to not fully contemplate all of the expenses associated with a VoIP/UC deployment and honestly, we don't do the best job with the TCO discussion either.

 

This particular prospect was comparing a premises based PBX deployment using their existing LAN infrastructure and being connected to traditional PRIs to a fully managed solution. The list of differences hurt my head!

                                                                       Them                                      US

New LAN switches                                      No                                         Yes

LAN/QOS Management                             No                                         Yes

Inter Office VoIP Connectivity                No                                         Yes

Complete PRI Replacement                     No                                         Yes

Managed VoIP WAN                                   No                                         Yes

Business Continuity                                    No                                          Yes        

 

But we were "more expensive". We're "more expensive" because we do a lot more, and we do it a lot more efficiently than most enterprises could ever do it themselves. Now, I know many enterprises don't have that kind of demand for relentless voice quality, but for the type of enterprises we serve (see "it's all about the dial tone - stupid" entry below) PSTN quality voice is job #1. And you can't have that kind of quality 100% of the time without undertaking the management of all of the components that make up a VoIP network.

 

So every once in a while, we engage in a conversation with a client that can sound like we're selling hard, when what we're really doing is trying to save them from themselves, and from those people who only provide a single component of a VoIP ecosystem and who forget to warn them of all of the "other things" that go into a first quality VoIP deployment. 

 

And when we're the only folks at the table with that message, it certainly can appear self-serving. So sometimes the message isn't heard, the decision goes the other way, and we (I) leave frustrated that "they" didn't hear us and we didn't make our case well enough. Very sad.

I had three conversations this week that crystallized a thought for me clearer than ever. One was with an analyst; a second with a current member of the Cypress team and the third was with a prospective new employee.

 

The analyst conversation started with an interesting line of questioning - from which perspective do customers approach UC deployments - the phone or the desktop?

 

The answer for me was easy - for our clients - it's the phone.  Reliable, "PSTN-quality" dial tone is the price of admission for any UC deployment we undertake. Our clients don't passively use the phone as a utility tangential to the running of their business. They use the phone to run their business; spending a significant part of their day using the phone in the act of undertaking money-making transactions. When they go off-hook, the dial tone needs to be there every time, all of the time.

 

Similarly, while not everyone at a law firm or financial services firm is going to become a user of presence, chat and video, they are all active users of dial tone. It is the least common denominator of the user community we serve. I can think of one firm in particular where we've deployed an IP Phone to an octogenarian partner who has never owned or used a PC, and at the same time we're deploying to the firm's twenty-something associates who've never had a home phone line. To do that succesfully, you need to build your UC deployment from the phone out.

 

The second conversation, with a member of our team involved her expressing surprise and perhaps even indignation over her newly learned knowledge that one of the higher profile OCS hosting companies out there does nothing to integrate it with the "real" phone network. The conversation started with a question akin to "who cares if all you can do is call from PC to PC?" A truly Cypress-centric perspective for all the right reasons; the vision of delivering UC has to be the seamless and elegant integration of the phone and the desk top to enhance how we communicate today. Not an isolated set of "cool services" that are not related to how businesses work today - we're not all about to become Microsoft OCS-oriented, Skype-like users after all.

 

The third conversation was with a new prospective employee who shared his experiences at a prior employer who was an early entrant into the hosted VoIP arena (and is still around). They're someone with whom I am very familiar, but his perspective crystallized what their issues were (and still are). He noted that they were all data networking people, who had little or no experience with the vagaries of the public telephone network, let alone the intricacies of setting up a Call Pick Up Group on a PBX. They just didn't get voice. I couldn't have said it better myself.

 

The public telephone network has consistently delivered reliable dial tone better than 99.999% of the time for over 100 years - all without ever needing to resort to a "blue screen of death" or its equivalent. While many of us may take that for granted, as we move from the TDM to the IP world that reliability must transfer for it to be acceptable to the vast majority of professionals who use the phone today. Sure, I know there is a whole generation that has grown up with the cell phone as their benchmark for service levels and have different expectations - but even they move to a "landline" when they're about to have a $300/hour conversation with a client. And even if they were ready to accept lower reliability, they don't make up the largest share of professionals in the workforce today, nor will they for quite some time.

 

So until the day when 5-9s isn't the benchmark - it really is "all about the dial tone - stupid" and the measurement of every successful UC deployment will start with equaling or bettering the current voice quality environment and then enhancing it.

 

(Thanks HW for the inspiration -this was a long one)

I spent most of this week on the road talking to current and potential Cypress customers - which is always good for my soul.

 

One visit in particular made the whole trip worthwhile. We stopped in at an existing Cypress customer in NYC. They've been with us just around six months after having a very bad experience with a different hosted provider. The sales process to bring them on board was, shall we say, confrontational; since they were jaded by their prior provider and viewed our claims of service and functionality with an appropriate degree of disdain and suspicion. And early on in the installation phase, the slightest less than perfect experience from Cypress was viewed as proof that we were incompetent liars too.  

 

But that was then - this is now. The CFO of this very cool company made it clear that though business for them is good, there is pressure to cut costs everywhere. And then he offered up to us the ability to replace his other service providers (on the data side of things) and to hopefully bring savings as a result of the consolidation. The impetus behind this offer was in his words - our service; which he described basically as the best he has ever had from a communications service provider. His evaluation continued with him stating that in technology things can go wrong, and that the judgment of a good provider is how quickly they respond - and we respond fast. He finished by noting an incident where he called in a bad phone on his way to the office and we had it swapped before he got in - something that amazed him.

 

Now somewhere in mid 2008, Gartner did a report, on Verizon, and mentioned Cypress in it (which of course made me smile). The reference to us centered on where mid-sized business would receive the highest level of service, and the answer to that query was not with Verizon but with the smaller Technology Service Providers, like Cypress. I of course shouted AMEN as loudly as I could when I read that. And I felt like shouting it again as this CFO gave his narrative of his experience with Cypress.

 

Beyond the economic and technological benefits of the UCaaS model there is the experiential benefit of doing business with a partner that is almost myopically focused on the "customer experience".  And that is not defined by the technology working; it is defined by how the enterprise user community "feels" as they use it on a day to day basis. Cypress and other folks like us are dedicated to a high touch customer experience for all of our clients. We don't just want stuff to work, we want you to love it - or as the book's title states, to become "raving fans" of it. The commitment is manifest in how we take care of our clients every day.

 

So come on into the pool, the water is warm, and the drinks are served fast and cold by a happy staff  J

(This is dedicated to the entire team of Cypress's NYC branch office.)

Nortel filed for bankruptcy this week.  Not exactly a big surprise to any of us - even less of one to me.

We were meeting with some of our Nortel contacts last week and in casual conversation they mentioned that bonuses were paid early this year.   Uh oh - the canary had just died! I am an ex-WorldCom-er and in the summer of 2002, we quickly moved from paying people a week in arrears to paying them current, so that when we filed CH11 the following weekend, there would be no employee payroll caught up as "pre-petition" debt.  Ah the joys of being jaded.

But wait - I am the optimist. And yes that even still applies here. While Nortel may be burdened with debt and facing a very tough economic climate, I believe they have acted wisely. Instead of waiting another year and filing bankruptcy with the wolves at the door, they did it now, with $2 Billion (US) in the bank allowing them ample time and latitude to decide what to do next. 

Clearly that will involve the sale or spin-off of some or maybe all of the company, but done in an orderly and probably constructive way - especially for those of us who are their customers and partners. Every leading analyst out there acknowledges the strength of the Nortel product line. The CS2000, our core switching platform, is one the most widely deployed Central Office switches in the U.S. and the world and is at the very heart of the global telecom fabric. The Nortel Enterprise product line - namely the CS1000 - is equally robust and widely deployed, and their work in integrating it with Microsoft's OCS is industry leading.

These product sets are extremely valuable (and of course viable) and all of us who are customers of Nortel and use them will benefit greatly by them being in the hands of a financially stronger Nortel - or even perhaps in the hands of a stronger player who consolidates some of these powerful assets.

Either way - it is the nature of a Chapter 11 filing that "business as usual" continues. More than that, since the carrier and enterprise product lines are in fact the crown jewels of the Nortel product suite and its most valuable assets, it is demonstrably in the best interest of the credit-holders that these assets continue to be managed and enhanced to maximize their ultimate value - either to a re-emerged Nortel or to some potential buyer. So continued support, enhancement and R&D around the CS1K and CS2K suites will be exactly what we see as Nortel works through the ultimate restructuring of its debts.

Bankruptcy isn't fun for anyone - but it also isn't then end of the world as we know it. One needs only to look at the US Airline business to see that. And just because Delta, Northwest and United (to name but a few) filed bankruptcy didn't mean they closed up shop or that people stopped flying them. Quite the contrary - and the same will be true of Nortel.

Perhaps having lived through the experience of a large company filing Bankruptcy and then seeing it ultimately emerge and become part of a much larger entity, with all of its customers and products in tact has steeled me to the "B" word. But I don't view this event as anything more than the prudent use of the business and legal tools at hand to ensure the ultimate survivability of the Nortel service set to the maximum value of all involved. Optimism does not exclude practicality.

We're on a roll, our second analyst briefing of the year and we haven't even hit January 15^th yet.

Oddly I feel like a Sith Lord, slowly coaxing the innocent defenders of the former order over to the dark side.  This analyst, who was on the "customer side" of the house was amazingly susceptible to the influences of the hosted managed delivery method as a real benefit to the customers they advise. This particular "target" was amazingly agreeable to the dark view; almost ready for the status of a full apprentice. 

Ok, enough with the metaphors - this was a 90 minute conversation with a great and refreshing perspective, not with one of the folks who watches the industry pontificating (or in my case prognosticating) about it from inside the bubble; but someone who has a customer's eyes and perspectives. 

This analyst could articulate clearly why the UCaaS/managed model was ideal for the mid-sized enterprise.  Financial benefits, technological benefits, speed to market benefits, ease of management benefits.  And they quickly evaluated the Cypress delivery model and extrapolated where it could; serving the needs of integrated contact centers, taking of data networking and security management, for example.

This person also quickly honed in on "the numbers" inquiring about our fee structure and our rate ranges.  And they quickly interpreted the cost effectiveness of our price position to the clients they advised.  By the time we were done, I was fairly convinced they could present the Cypress story as well as me.

So the incurable optimism flourishes.  After years in hiding - maybe it's finally time for the Sith to explode on the scene!  (Sorry I couldn't resist - this one is for RY)

I had the opportunity to brief an analyst for one of the better known firms this week. In the interest of discretion, I will name neither the person nor the firm, but the conversation ran over an hour, was broad ranging, and I believe intellectually honest on both sides.

One thing that comes strikingly through in my conversations with analysts is how opaque the entire Hosted VoIP category (CaaS, UCaaS -pick your term) is to both those of us "in it" and those of us "watching it". This analyst, who I considered very knowledgeable and had been an observer of this market for quite some time, openly admitted that their predictions about its growth rate and size to this point have been off - and clearly on the low side.

Based on that history, their forecast for the upcoming year was shaping up to be - shall we say - grim.

When asked my view on that outlook, my perspective was (as it often is) contrarian. My case is simple. In a capital-constrained market, the only projects that are likely to move forward are those that first, don't require incremental funding and secondly, those that offer immediate operational savings. That describes the hosted model to a tee - at least in my mind.

Evidence for the case - we just completed an RFP for a large firm that is considering a move to UC, but is constrained by the exact limitations I outlined above.  Our proposal will result in an immediate 20% reduction in monthly operating expenses, and an upfront six-figure cash rebate and brand new VoIP equipment without the outlay of a single capital dollar on their part. All with the addition of some of the most advanced Unified Communications functionality available today.

What reason could there be for not moving forward with that project? More capability, more functionality, new equipment, less expense and cash back now.

So there is the reason for my contrarian thinking about our prospects in these difficult economic times. Contrary to this particular analyst's predictions, I believe that the hosted unified communications model that Cypress offers represents exactly the kind of IT projects that are being considered and done right now. The financial imperatives of the day may give rise to folks who would not normally consider hosted as an option, taking a long hard look at it.

Then again, I tear up every time I read "Yes Virginia there is a Santa Claus". So never trust an incurable optimist.

Atlanta - January 6, 2009 -Technology Marketing Corporation's (TMC^®) Unified Communications magazine has named Cypress Communications® as a recipient of the 2008 Unified Communications Excellence Award for Cypress' hosted unified communications solution, C4 IP™. As an enterprise-class hosted VoIP and hosted unified communications solution, C4 IP made its mark on the communications industry in 2008, garnering a total of 9 awards for product innovation.

 

We're pretty passionate about UC here at Cypress and the very real productivity benefits it can bring to an enterprise. The problem with the Hosted VoIP marketplace is that it's populated with dozens of companies that are nothing more than "two guys and a truck" out there hawking cheap phone service using a "switch in a box," cheap phones and unmanaged bandwidth.

There's another model - one about providing game-changing functionality, business continuity, and quality with a level of management and monitoring most mid-sized enterprises wouldn't replicate themselves. Many folks haven't had the chance yet to see and learn about this model and all of its benefits, but that's what we're here to do. We made some serious inroads in 2008, and I'm really starting to believe 2009 will be a breakout year for UCaaS.

It feels really good to be recognized by our industry for what we're doing.