Uh Oh, Microsoft is Closing the Gaps

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

Uh Oh, Microsoft is Closing the Gaps

Some folks think I am picking on the VoIP space (see this post). Maybe I am. Hosted PBX started for me in 2003 when Broadsoft's second customer rolled out its platform and signed me up as their first agent. It has been a struggle ever since.

Broadsoft has 400+ customers worldwide and you would think it just have 4 in the US. Windstream and XO getting props for 1 and 2 million SIP trunks respectively. (Comcast probably has more SIP trunks than the 2 combined). BSFT bends over backwards for Verizon and its VCE offering. Vonage just got a seat at BSFT, which really ticked off all the other customers who have been flying the BSFT flag for a lot longer.

Needlless to say, the big boys lean on BSFT for the whole bundle, which means that they have no IP (intellectual property) in the game and it comes down to (a) who gets in front of the customer first; and then (b) price.

Where will CLECs fit in the new world order?

Fone.do, Switch.co, Panterra and a few others have tried to do some innovative things with the Hosted PBX. Not enough marketing budget to get through all the noise though. Also, the channel partners really don't want to SELL Hosted PBX; they want to take orders for dial-tone replacement. It is a problem.

Microsoft Office365 with Lync/Skype for Business has really sucked a lot of the oxygen out of the room for Hosted PBX/UCaaS players. Lots of media. Fastest product ever for MS. It was cheap, then cheaper. It has even muffled any talk from Cisco about Spark or Google. It is crazy.

Now it just got crazier. You can now make Skype voice and video calls from Slack. Skype added the feature officially (see here).

I mentioned that Slack needed this. Can't believe MS got their first. I thought BSFT was an engineering firm?

I have also mentioned numerous times that it will be the integration that will be the difference maker -- moreso than price.

In fact, I have 2 panels at ITEXPO on the Age of the API and Business process as a Service. And the ITEXPO West has been replaced with "All About the API Conf"

Businesses buy Outcomes. That's why SAAS will transform to Business Functionality as a service instead. Who will get there first?

As everyone looks to go up market to mid-market or enterprise or whatever you call 250+ seats these days, it gets crowded. Thinking Phones just announced they hit 1000 customers and that their latest contracts are all for 1000+ seats. That seems great, except that West lost a huge contract last year - $15 million UC&C customer - who decided to go single source. That single source was likely Microsoft or Cisco. That vendor was likely Verizon, AT&T or Dimension Data/NTT.

I hear talk of global all the time. From Masergy, Aryaka and others, that they have a global network ready for the Global Fortune 5000 firms. Yeah,how many of them are going to waive their MARCON contracts with BT, AT&T, Verizon, Telefonica or Telstra? How many are going to give up their Office365 installment? There are only 5000 in that group. They make for nice whales, but watch out you aren't hunting Moby Dick in a row boat.

The market is getting carved out. The UCaaS players need to carve out a niche that they can excel at and own it. Going head to head in the 50-500 seat space with the same product as everyone else is not going to be pretty.

To the consumer, UCaaS and Hosted PBX isn't about the softswitch. They don't care about the technology. They care that it works. That it is implemented properly without disruption to their business. They want efficiency and productivity, which is why Slack and O365 and Skype in all its forms is adopted and used. That is important: adoption and use. RC tracks usage, because if you don't ever log in, you will turf.

Back to the CLECs. They made their money in the real SMB space. They still can if they could forget about competing head-to-head with their vendors (the Duopoly) and launch a few product bundles that are theirs exclusively. Until then, it is a declining future.

You can ignore this as the rant of a cynic, but Slack has 2 million daily users and growing after less than 2 years from launch. Integrated with MS already. Office 365 has nearly 50 million monthly active users, according to BI. If they all get voice enabled by MS, where does that leave you?

Where does that a channel partner selling dial-tone replacement? OUCH!

BTW, Skype celebrates 2 trillion minutes of video with mobile group video calling.


Both Zane Long and Michael Sterl have left Vonage Business, where they were leading the channel sales division.

CallTower, a UC provider that sells a Lync integration service, is merging with SoundConnect.

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