Am I Selling Cloud?

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

Am I Selling Cloud?

I signed up as the first agent for Broadsoft's second customer in 2003. They were unprepared to sell via the channel, and even less prepared to market their offering in general.

In 2005, I signed up as an agent for another Broadsoft shop. It was a wholesale offering for service providers. The company had problems delivering quality service.

When I look back at all the VoIP companies I worked with, most sucked. They could not deliver on the service promises. Mainly, I think because they were in it for the Arbitrage.

I had a long discussion with a reader on Friday where he expressed concerns about most telecom and VoIP companies treat engineers poorly. He mistakenly thought that CLEC's and VoIP companies were in the engineering business. They are not. They are sales & marketing machines that happen to offer VoIP. The engineering, the service delivery, the customer care -- are all secondary concerns. Selling and billing are the primary concerns.

When I say this industry is built on Arbitrage, I mean that since the dawn of the first IXC, any competitor in this space has been about "I will save you money." It has never been about building something better and growing the total revenue -- it has always been about selling a cheaper substitute for the ILEC. This is why the debt is high and the revenues are flat or declining for most companies.

One reason the ILECs are winning is because their replacement services - voice, texting and mobile data -- actually cost more than the replacement services!! This chart shows that mobile data revenue has surpassed fixed broadband revenue. Of course it has -- mobile broadband is expensive!!!

RAD-INFO INC has signed a lot of NDA's and a lot of agent agreements to sell VoIP and other cloud services. Usually it has amounted to very little.

My clients have been selling cloud services - like virtual desktop, Hosted PBX, Hosted Exchange, XaaS, and VPS - for a long while. I only sell to an end user through a client service provider. I am selling cloud, but I am selling it to the service providers and through them to the end-users.

From what I have seen, the hype of 2012 has certainly helped the marketing for cloud services, so 2013 should be the year that the needle actually moves on the revenue side.

Of course that depends on whether the service providers can actually sell their services and provision them to the customers' satisfaction. (Both of which are up in the air presently.)

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