UC Growth is Stagnant

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

UC Growth is Stagnant

The case for UC: "The communications requirements of most businesses now extend well beyond telephony. They embrace email, instant messaging, voicemail, video conferencing and 'presence'. Ideally every one is integrated with the others to create a suite of unified communications and collaboration (UC&C) tools." Ideally - but not in reality. Hence, the big problem - and why UC growth isn't what it should be.

Despite manufacturers popping up new initiatives and products, like (1) Siemens Enterprise Communications launching Project Ansible as the new company Unify or (2) Avaya re-booting or even (3) BroadWorks Collaborate - at the end of the day "Frost & Sullivan research that says premise-based UC grew 2.4 percent last year and now is worth $698.5 million. It calls that growth moderate, and suggests that the pace was partly a result of organizations waiting to judge the stability of cloud-based approaches," writes Carl Weinschenk.

Good thing the analysts are so positive: "TechNavio's analysts forecast the Global Unified Communication market to grow at a CAGR of 15.85 percent over the period 2012-2016. One of the key factors contributing to this market growth is the shift from on-premises to cloud-based unified communication," reports the Report Linker. It is that kind of Hope and Rosy Picture that gets the UC service provider its extra money from the VCs.

Joel Young writes that churn is inevitable in SaaS business models and negatively effects growth creating a ceiling. It isn't just churn slowing sales; it's the whole sales and deployment machine. In some cases, customers are leery of cloud-based solutions. These factors will need to be addressed by service providers before growth

Companies are throwing everything at UC, too, in hopes that it catches fire. Broadsoft aligning with Google is just one example with 3 specifics - Verizon's VCE, Simple Signal with gUnity and BroadWorks' Chrome Extensions. Even audio conferencing companies like Arkadin, are jumping into the UCaaS bucket via Microsoft Lync. It's a BSFT-vs-MSFT-vs-CSCO battle for UC. The manufacturers are winning but their partners are pouring money into a race that many customers just don't care about. How do you get them to care? <- AH! That's the question isn't it.

"According to an Infonetics report issued in the first quarter of 2013, the SIP trunking market is expected to grow from 6.8 million sessions to almost 40 million sessions in 2017. Jefferies Equity Research estimates that VoIP business seats will grow from 44 million in 2012 to 149 million in 2017, representing almost 50% of all global business voice lines." [source] That data points to SIP trunking and cheap hosted VoIP seats as driving the growth.

Some days it seems like Hosted UC or UCaaS or Hosted PBX or Cloud Communications is a solution searching for a problem. While AudioCodes is rolling out "One Voice for Hosted Services program, which includes a full line of proven IP phones, gateways, session border controllers (SBCs) and multi service routers in addition to a global service capability providing installation, provisioning and network monitoring, as well as support and maintenance. The new program is intended to simplify and streamline the delivery of cloud-based services to business customers." This program comes AFTER the sale of the UC service by the service provider. The providers either have to get better at selling and marketing UC - or they have to start simplifying it for the SMB space to be a key system replacement. These seats are sold as a replacement for a premise based solution. It isn't like there isn't plenty of noise about Hosted PBX service. There are probably a thousand service providers in the US alone. All of the CLECs offer some flavor of Hosted PBX -- but very few can sell it on its benefits and value - and deliver on that promise.

We are past the first set of 3 year contracts. What do I hear? The customer is dissatisfied with its current provider. Customers experienced any of the following: quality issues, lack of training, or lack of benefits. The customers want to keep their phones (HA!) but try another provider. But this won't grow seats. It moves them from one SP to another.

Broadsoft rolled out in 2003. You would think 10 years later, there would be a machine in place for service delivery, best practices and marketing. That's not to say that they haven't tried a Go-To-Market department. It just hasn't been a home run yet. Which is good because it keeps me busy working as a consultant either under RAD-INFO or under EMBRASE consulting.

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