Cbeyond 2.0

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Cbeyond 2.0


Cbeyond laid off 200 employees last week. "The company said it is reducing its traditional entry level direct sales force by about half while building a new direct sales group dedicated to managing existing and new technology dependent customers."

In a message to agents today:

"Cbeyond is making some significant changes that are going to directly benefit their Agent Partners. They will be reducing their entry level sales force by 50% and redefining the roles of the existing team. They will also be providing agents with enhanced support systems and marketing, along with hiring channel-centric cloud sales engineers to help partners secure deals. Per Zane Long, VP Indirect Channel Sales, "... agents are a critical part of the team that will help us build what we are calling Cbeyond 2.0".

Cbeyond is going through changes. It no longer opens new metro areas for telecom and network servcies. This puts a bottleneck on revenue growth and employee satisfaction, because during the emergence of new metros, employees had opportunity for advancement. Now there's a bottleneck. These layoffs will create some more pressure for a CLEC that is essentially a sales and marketing arm. Sure, technically they did a good job with SIP Trunking, but other than that it has been a marketing machine. Now it is reinventing itself into a cloud services provider. "By the end of 2013, Cbeyond expects about 25 percent of revenues will be generated from its cloud-only customers and its customers who buy both network and cloud services." ARPU will be lower for cloud services, compared to telecom services, but the margins will be higher. Well, until next month when cloud becomes such a commodity that it becomes a bloody price war like VoIP.

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