RAD: The Telecommunications/UC space is changing. It is a lot different than when we both got in during the heyday of the 90s. How will these changes affect channel partners?
CEO: The evolution of Cloud offerings in the UC space is changing the fundamental structure of the type of partners that are required for a successful channel. The classic VAR's face the challenge of a major change in becoming solution focused, not product focused. This also entails a change in the type of technical talent required within the VAR's to execute on their new solution offerings. A market that for more than a decade had only 5 to 10 top providers, now as the shift to cloud continues, has 30 or more providers with UCaaS offerings. With this, VAR's that navigate the change will have to focus on providing solutions that incorporate integrations to other work flows, CRM's and related solutions. On the positive side, it does allow VAR's to truly become solution providers by having the ability to easily offer multiple Cloud solutions, finding the best fit for each prospect."
Tracey continues, "As a result of these changes, many of the providers turned to alternative channels like Master Agents and Value Added Distributors (like CDW and Jenne). This opened a larger market reach than the classic VAR channel, but has compounded the problem of finding resources to deploy and support these solutions as they grow in numbers and scope."
"As we sit today there is a lot of uncertainty in the channel and lots of scrambling for solutions. Channel partners that can adapt and overcome will have plenty of opportunity and the re-occurring revenue streams should provide many opportunities for growth beyond that of the traditional VAR."
"What is really needed to succeed is the technical talent and execution of a top VAR, with the exponential sales growth opportunity of a channel like the Master Agents built for carrier services."
RAD: What have you seen that is a positive indicator?
CEO: "We see growing demand from the providers for an answer to their execution and support issues. The demand for organizations that specialize in UCaaS/CCaaS and have the required skilled engineers to successfully design, deploy and support these solutions will see tremendous opportunity. We also see growing demand for technology in the business space that can improve companies' ability to compete in their markets. We see increase value put on UCaaS and CCaaS solutions as a key for organizations to succeed. It opens lots of opportunities for those organizations that are ready to take on the challenge of these changes."
RAD: How do you see the Contact-Center-as-a-Service space evolving?
CEO: "I see the CCaaS space evolving ahead of the UCaaS space. Contact Centers are often the heartbeat of an organization and its key factors - revenue and service. The more organizations realize that Contact Center productivity is a driver for their business, the more demand we see for the business applications/features to be built in to the Contact Center solution. The line between CRM and CCaaS is blurring as more companies demand integrated access to multiple communication channels and data sources. And today it's true not only for bigger business players but also for SMBs."
"There's a very limited number of competitive premise-based Contact Center offerings in the small-to-medium market. Cloud solutions are stepping forward bringing top-level Contact Center functionality to this market along with the reliability, scalability, continuous software advancement and next to zero hardware requirements. Smaller contact centers now can afford to operate on the same level as business monsters with less risk and more opportunities to grow."
Tracey adds, "We see some big SaaS CRM platforms presenting themselves as Contact Centers to play as CCaaS solutions but they are still lacking lots of expected Contact Center functions and they lack the ability to route interactions from multiple channels effectively. They face a step climb to catch up to the rapidly expanding feature/application sets of specific CCaaS solutions. At this point in time with some many of the CCaaS players offering integrations into these big SaaS platforms and having open API's for continued advanced integrations. It just makes more sense for CCaaS to be integrated into complete CRM than the opposite."
Tracey remarks, "When it comes to the channel, CCaaS business is a great source of MRR revenue. The average CCaaS deal will have a Top Line of 4x to 5x in comparison with UCaaS, and it is still a field with fewer players. MSPs, VARs and Agents who see the writing on the wall about declining top line revenue in their carrier business should really start considering CCaaS as an alternative."
]]>I know we are facing TDM sunset but from the looks of advertising from the likes of Birch and Bullseye, POTS is still alive and well - and profitable! POTS is still the reliable choice when it comes to voice lines for alarms, elevators and faxes.
For many scenarios, an on-premise PBX makes more sense than a haphazardly deployed Hosted VoIP scenario. Many a small business replaces POTS with SIP trunks to get mileage out of their aged key system. Switching to a new cloud PBX is not a viable option for some small offices because they don't want to change behavior. Hosted VoIP does a poor job on key system emulation despite years of partners selling it and providers trying to deliver it. It is one big face palm.
If PBX were indeed dead, wouldn't one of the leading UC companies have 1 million seats by now? Instead they are struggling to get to 700K seats.
The problem with UC is that it is mass market and it would be better off verticalized.
It would be better for all if Broadsoft wasn't competing directly with its own customers by selling direct to users at $15 per seat. That smells of desperation.
Someone asked me what I meant by that. Broadsoft selling direct cuts out their 400+ clients - like Vonage, TPX & Nextiva. Now these providers have to face price compression from their vendor. It's like ISPs and CLEcs who buy wholesale from ILECs and cablecos only to see retail rates are cheaper than their wholesale rates. Isn't that a crock?
BSFT can't add any more clients because every carrier on the planet has already picked a softswitch - BSFT, Meta, Netsapiens, or home brew. The only way to maintain revenue is to sell direct. BSFT isn't exactly raising the ocean or expanding the pie. They are just taking a big bite from the pie that their clients have been baking for 10+ years. Sure, everyone says that cloud comms is starting to take off; that it is hitting high adoption, but is it the UC we have seen or a bunch of variety?
Office 365, Cisco Spark, Dialpad, One Talk, Fuze, Shoretel, 8x8, RingCentral, Grasshopper, Mitel, Avaya, Jive, Intelepeer <- that is a lot of variety under the UC umbrella. With 2000+ providers of some form of UC in the US, even with an accelerated pace of adoption by users, will there be a clear winner soon? Probably not.
In fact, all these choices without a clear winner probably helps Microsoft more than anyone. When in doubt buy from the established.
There are factors: it isn't a replacement system so much as a change. Extra gear is required (POE switches, QoS Router). It isn't as reliable as POTS - and can't be used in all places POTS was. The call quality is often not clear (unless you put it up against cell phones). (It's why they are touting SD-WAN for UC). It isn't cheaper than POTS in many cases. The deployments are often messy. (Providers can barely turn up Internet Access without issues let alone something complicated like Hosted PBX.)
And finally it doesn't pay much in commissions. At $15 per seat and even a 20 seat deal, the MRR is $300. That is a big headache for $300 in billing revenue. Easier, faster and better to sell network still. Or POTS. Or on-premise PBX with higher compensation. 3CX has been doing everything to make a partner's business model sing.
This isn't me being a Pessimist. This is me being a Realist. This is just how it is in the street in many places.
I don't hear anyone hawking white glove service or money back guarantee or no headache install. I hear the talk of zero touch deployment. That's the wrong way to go except for the CFO who wants to maximize profit per contract. Customer experience is someone else's domain.
I don't hear anyone talking about their call quality, their customer experience, their hand holding on deployment, their world class PMO. These are better things to talk about than price and features.
]]>Private equity firm, TPG, last year acquired RCN and Grande. Now they are grabbing Wave Broadband in the Northwest for $2.36B. They will combine all 3 - Wave, Grande and RCN - to make a larger MSO. The PR says that they will be the 6th largest MSO, leap-frogging Altice. Altice owns Suddenlink and Cablevision. Comcast and AT&T have 22M and 25M respectively. The Top 4 all have more than 10M pay TV subs. After that it is splitting hairs with VZ at 4.6M to Altice with 3.6M at number 7. TPG's exit strategy will likely be Altice buying them.
WISP Redzone claims it has developed a "fixed wireless spectrum aggregation technology that can support broadband speeds of up to 400 Mbps per customer", according to press. Google Fiber must be excited.
Mitel has been making noise since early last year when it tried to buy Polycom. Now it is scooping up the assets that Toshiba is leaving behind as Toshiba exits the phone business.
Mitel also announced that it had broken 3 million users. According to investor presentations, Mitel has 3.2 million cloud users but only 588,000 recurring seats. To put that into perspective, Microsoft found 25 million subscribers for Office 365 (although the take rate is slowing to 900K per quarter). Broadsoft claims 15M cloud lines but that includes SIP trunks. Vonage is over 600K seats and 8x8 is close to that.
The details can be found in the 2017 Hosted VoIP/UC Market Report for the US, which was just released. See here.
Jive Software was acquired for $462M. That is a social collaboration software company based in Portland; not the UCaaS provider out of Utah called Jive Communications.
Amazon released Chime (a Webex clone) and cloud contact center. Now with Alexa devices it is taking over the speakerphone market. A few VoIP companies have integrated into Alexa for voice enabled dialing (something we need in cars!). Only a matter of time before Amazon gets into the dial-tone replacement game in conjunction with Twilio.
Panterra Networks doesn't do marketing. It's a shame really. They have a better than average UC application that is secure (encrypted), HIPAA compliant and 24/7 hack monitored. It produces one contact management file without duplicates. Added Teams with the release of Streams, which integrates UC, team messaging, file sharing and analytics into a single customizable platform. Worth a look.
]]>After 15 years, 2000+ providers can only take a 28% handhold in the market?
The growth rate of Hosted PBX (HPBX/UC/UCaaS) has always been a hopeful bad guess. And it will continue to do so because too many people, companies and dollars have been invested thus far for any analyst to turn on the sector.
There are 4 major problems with the UC Market.
One, PBX sales have declined about 3% per year. Even Avaya going bankrupt isn't going to speed that up. Not only do people trust boxes; they are cheaper in the long run. Single location businesses, which is most of them, don't have a PBX problem that UC solves. There is a current Product/Market MisMatch that needs to be examined.
Mobile UC may get more traction. Or a simple PBX like Dialpad or Fone.do. Gary Kim writes that the market may be too small. At ARPU of $400, it takes a bunch of sales to move a needle for a company like CenturyLink, Verizon, AT&T, Comcast or Charter.
Two, I wrote this last week. Any 15 year old product needs a re-fresh or re-think. We are overdue for a Re-Think. Slack was a re-think, but that strays to the edges of what UC is. So does Cloud Contact Center. And these companies want to be everything for 1-1000 employees. This isn't Pasta or Rice. This is technology.
UC is Change. People hate change. The Channel doesn't sell Change; we take orders on replacement services. Harsh but mainly true. There are exceptions of course, but the general rule is that agents are transactional. Even Inter-Connects aren't excited to go sell a cloud service. MSPs will if it is white-label and can be bundled into their package, but that falls into POTS Replacement more than a full-blown UC deployment.
Three, HPBX has 2 camps of buyers: POTS replacement sold as cheap as possible and actual UCaaS. Where do you think most of the market is? Right, cheap VoIP.
Now if I am buying cheap VoIP, am I also going to pay for a backup circuit or SD-WAN or any other service enhancement or assurance? Unlikely -- or I wouldn't be buying cheap cable broadband and the cheapest OTT voice!!!
If the buyer spends more on bandwidth, has a backup circuit, they are likely going to buy UC as BC/DR and that isn't cheap VoIP.
The fourth Big Problem: There are far too many providers! Telarus represents at least 37 HPBX vendors. Other masters have at least 25. How does anyone differentiate/ stand out/ position in a marketplace where the cloud broker has a choice of 2000+ providers?
This becomes a problem for the providers who enter into a Price War (seats cratering to below $15 each) and a SPIFF War, where providers are literally buying sales.
One of the most successful HPBX providers, 8x8, is up for sale. This move comes after a recent re-branding as a Global UCaaS provider.
Are the owners (the 8x8 founders still own most of the voting stock) looking to exit? Or is it that the machine to keep bringing in 20% growth quarter after quarter is grinding down? I just don't know who would pay $1.5 Billion for 8x8. VZ payed $1.8 for XO which owned fiber assets. WIND payed $1.1B in an all stock deal for EarthLink, who also had a bunch of fiber. Fiber gets a bigger multiple than VoIP.
The other thought is that what if $300M is about all the B2B annual revenue you can get?
From a recent discussion about Amazon Chime: there are approximately 100 million phone/conferencing lines in North America. If Amazon Chime with Vonage can hit a 5% share of this market, that equates to 5 million subs. At $5/seat/month, that is $300M incremental revenue opportunity for Vonage. That would be a needle mover for most UC Provider, considering 8x8 is at $225M in annual revenue now.
The emphasis has always been on multi-location and mid-market. That's why "41% of larger enterprises are using cloud UC services." Now everyone is focused there (upmarket). However, the bulk of the businesses are single location small business (20 million of them). That means a new product bundle is needed to attract this crowd. Many thing that this sector will be mobile only with an auto-attendant in the cloud.
When you look at the large number of messaging apps, at some point, one of them - Slack, Messenger, WeChat, HipChat - will hit the right bundle of functions to steal mass appeal. Not yet, but maybe soon.
]]>I spoke with a few VoIP executives including CoreDial at ITEXPO. There are two separate layers: cheap voice or POTS replacement and people who want a comms platform.
Most aren't using the full suite since they have Slack, Messenger, WhatsApp, etc. They have Office365 or Google for Work. It is a siloed approach to a comms suite.
Price points are decreasing. But then they had to since UCaaS is costing more than a SIP trunk and a small business PBX (think 3CX, FreePBX, Asterisk).
There aren't that many multi-location businesses. (And everyone is chasing them!)
There are more businesses with remote workers. There are also more workers with consultants, contractors and freelancers who are outside the federation of the enterprise system. How do they fit into the organizations' communications?
Coredial turns all features on when they sell off the Broadsoft platform. This way users know about features that they may not have been aware of, like voicemail to email or text to email.
There is training for users - and later due to employee turnover, more training for users. This is but one way to ensure that the customer's organization is getting the full benefit of UCaaS. Otherwise they could have bought the cheaper version!
Everyone is talking about softphones (especially Broadsoft and Counterpath!) Yet there were many new phone/handset vendors at the show. [There also were a couple of VoIP endpoint vendors who had devices very similar to Doorbot! ]
Are you using a softphone on your laptop/desktop/tablet? I'd be curious who is - other than folks who actually work at the VoIP provider!
8x8 is pivoting to Global! I guess they think they have taken all the share they can in the US. Or it is getting too expensive to acquire a customer in the US!
Maybe I am jaded because I have been staring at the VoIP World since 2002.I have waiting for the tidal wave of adoption but small business after small business are pretty happy with a key system, which despite the argument to the contrary is not the value of a Hosted VoIP solution (to see Key System Emulation is UGH!!!!)
I saw quite a few new logos that offer VoIP/UC. Consolidation news has quieted down. Current UC providers have to get - not only better at selling seats - but more efficient at selling them. Velocity has to happen. Yet to have that happen, the provider has to take more friction out of the sales process. The provider has to narrow its focus on who it can best serve and why - and target better for faster conversion.
During my discussion with Coredial. we talked about the market - actually we talked about the fact that the market of 1-500 employees is more like 7 markets with 7 different buying personas. UC is still triggered by an event more often than not, says Coredial. Moving, expanding, shrinking, acquiring -- these business events for the organization warrant a look at shifting from premise to Cloud Comm.
The market segments need to be addressed. The messaging, the targeting, etc. Considering many service providers barely have marketing in place for one persona, how will they market to 5 or 7 segments while addressing even half that many buyer personas?
I often talk verticals, but I also know that channel partners HAVE segmented the providers. "We use this one for 1-5 seats and this one for up to 20, etc."
It is unlikely that a partner will use the same provider for 10 seats as for 150 seats. It would be a white whale.
Just some food for thought.
One more thought: with Net Neutrality going away fast, what do OTT VoIP players do?
]]>When asked if this wasn't just a wrapper around Broadsoft's UC-One or other packages, Nextiva replied, "NextOS was completely imagined and developed in-house."
This follows Broadsoft's own announcements about Hub, Team-One and CC-One. This is BSFT's response to Slack, a real-time messaging and collaboration app now at 4 million users.
"BroadSoft Business includes three core applications: UC-One, Team-One, CC-One, with BroadSoft Hub providing contextual intelligence across the entire platform so users can access the information and apps they need in one place," press release states. "Built into BroadSoft Business are bOpen, bMobile and bSecure capabilities that can enable service providers to deliver carrier-class security and reliability; the openness for businesses to be able to integrate their favorite business apps (CRM, email, calendars, Twitter, etc.); and full mobility to connect advanced unified communication and collaboration (UCC) capabilities to a user`s mobile devices." I'm not certain if this is BroadWorks add-ons or if you can only get this via BroadCloud. The difference being that BroadWorks is run by the VoIP Provider and BroadCloud is the white-label service that Broadsoft operates for the provider.
Frost & Sullivan analyst Elka Popova wrote, ""BroadSoft's share of the global hosted IP telephony and UCC services market is 41 percent, which confirms BroadSoft's market leadership." With 15 million cloud lines, "BroadSoft cloud PBX/UCaaS installed base 3x greater than closest competitor Cisco and 10x greater than RingCentral." The "cloud line" is defined by Popova as "The BroadSoft installed base is hosted IP telephony seats, fully-loaded UCaaS seats and business VoIP lines." Still don't know if they include SIP trunks in that number because 3 million of those would be WIND and XO trunks then. And that woould skew UCaaS/HPBX penetration. It does look impressive in a graph:
Microsoft previewed Teams, which is its answer to Slack. It is currently only available to subscribers of Office 365 Enterprise or Business plans.
Meanwhile Cisco introduced a "flex plan" for Spark that lets businesses choose cloud, on-premises or hybrid services in a single contract. That includes Spark Meetings, which is also a Slack competitor.
Slack is attracting its own ecosystem that allows companies to integrate other functions to Slack beyond comms. Slingr turns Slack into a task manager. Other scripts can turn Slack into a CRM with Slack's user interface. IDEA2 and other companies like the user interface and the open API on which they can add functionality to an app people already like and use on desks and on phones.
Interesting that these folks are rolling out more complex platforms at a time when Verizon is rolling out One Talk which simplifies the whole UCaaS thing for small business. It's my experience that most businesses don't want complicated (hence, Slack!) and most users want simple (think Facetime). Without user adoption, this is wasted expense.
Want another example? Salesforce CRM at $99 per user per month but only a couple of people on the sales team use it actively. There will be managers who don't utilize the dashboard or coach to the activity in the system. Despite how integrated the SF ecosystem can be, it isn't worthwhile unless the users -- your employees -- are using it and benefiting from it! Same goes for any software, especially UCaaS (which is morphing again from Hosted PBX to UCaaS to UC&C and WC&C).
]]>Now, NICE has a new song: "As one company, the two leaders form the industry's first end-to-end cloud contact center, complete with world-class WFO and Analytics Organizations of all sizes can now take their contact center into the new era of the Experience Center."
Both ININ and Genesys were partnered with Microsoft for a layer on to Skype for Business. No one knows how that will shake out. Maybe MS buys Five9s or someone else in the cloud contact space to do it all under one roof. One roof isn't really the MS way. But who knows.
Avaya is feeling a lot like MITEL, being left at the altar and all. Their PE firms - Silver Lake Partners and TPG Capital - must want their money back. They took Avaya private in 2007 for $8.2B! That is nine years. Long time. Maybe MITEL wants to get hitched. But then Shoretel will have no suitor. (Remember Mitel tried to buy Shoretel in 2014.)
It looks like going private is the new thing. Ask Dell, Rackspace et al. When money is cheap, private equity firms like to buy shiny objects. Then they make a mess of them but still want to sell it for more than they paid.
]]>In this podcast, I sit down with Omar Paul, co-founder of Zilkr, a platform for communications APIs and SDK. In the Age of Integration, the Age of the API, UCaaS providers have to start building an ecosystem. When apps like Slack and WhatsApp are enabled for voice and video calls, UCaaS providers have to offer value and integration or be marginalized to sometimes used dial-tone.
CPaaS is hot. Twilio just IPO'ed. Nexmo was just acquired by Vonage. Apps like Uber, Slack and so many more are adding comms. But not from the VoIP provider, from the CPaaS platform provider.
If you can't see the podcast player above, you can download the mp3 or listen over at Soundcloud.
]]>We went from TDM to VoIP to Hosted PBX to UCaaS to UC&C.
We went from T1 to cable broadband to Gigabit.
The consolidation of cable will tighten the market in 15 to 18 months. (It takes that long for integrations to take hold.) Now if the integrations are not a big fail, then cable - New Charter/Spectrum, Comcast, Altice - will ratchet up the competition in the small business market for triple play.
"Cable/MSOs are the fastest growing providers in the business services market, with much of their recent success in the mid-size business space," reported MarketResearch. Think about that: the mid-sized space - not just the small business segment of the market.
Of the $104 Billion total businesses spent on telecom services in the US in 2014, AT&T had the largest share (33%), followed by Verizon (22%) and the rest of the LEC band of brothers (Level3, CenturyLink, Sprint, Windstream). MSOs have more than $12 Billion of that pie, with the lion share - $5B - going to Comcast coffers alone.
SIP anyone? 54% of business cable subscribers also use cable for voice, the report states. That means less than half the businesses using cable are buying voice from another provider. That is a shrinking opportunity for the 2000 Hosted VoIP players in the US.
"Last year the Cable/MSO share of businesses with 100+ employees rose to 17%, reports TNS. "The main driver behind this growth was a heavier reliance on internet service and the need for greater bandwidth; two areas where larger cable providers excel."
Telco broadband has not kept pace with cable in speed and price. Egged on by Google Fiber - and a declining market share of businesses - ILECs have started tentatively rolling out faster fiber based broadband - 100MB to 1Gigabit depending on the ILEC (Windstream versus CenturyLink or AT&T).
UPDATE: Google just rolled out Gigabit Fiber to small business starting in Charlotte in July of 2016.
The ILECs have made a tremendous CAPEX investment in TV - just as OTT TV is hitting its stride. They spent big to supply triple-play, when they could have spent the money on FTTx projects for faster bandwidth. That was just uncreative thinking. [More of that Me-too mentality ingrained in telco.]
All of this will stress ILECs, some CLECs and even some OTT VoIP players. When cable takes about 35% of the SMB market, there won't be much room left for anyone else.
In March of 2016, "During the fourth quarter, Verizon reported that total broadband connections dropped to 2.1 million as it lost more DSL subscribers after losing 94,000 DSL customers," according to Fierce media.
Verizon is transitioning. Verizon is now betting on mobile ads (AOL acquisition and Yahoo bid); 5G fixed wireless broadband replacement for wireline services; and IoT (including connected cars) to add to its coffers.
A point I make often is that the debt that the ILECs carry is crippling with flat revenues.
Think about this: Vonage has taken $800M worth of voice revenue. Twilio gets $240 million in voice revenue. This is revenue that typically would go to Level3, Verizon and AT&T (and it probably does terminate to them eventually for a smaller percentage of that money).
WebRTC is being used in so many apps to allow for video and voice calls - bypassing the traditional voice network. [And bypassing the cellco text system and dollars.]
Then, we have Cable beating Telco in broadband bandwidth. Always has in fact. Gigabit fiber will be the real winner if the telcos decide to pursue that route for real (versus in just press releases).
We have telco getting in the data center - and now we have telcos looking to get out of that business without embarrassment.
There is a Talent problem, too. There are too many musical chairs. Not only can't you set a strategy when you shift personnel that much, you can't execute on a strategy either if the cogs are constantly being replaced. (And I don't mean cogs in a bad way. It takes a lot of talent to keep the wheels spinning.) The talent drain has also resulted in a domain knowledge drain as well. Quite frankly that means they don't where things are and how things have been done to keep things working. It isn't all documented, especially fiber maps!
Let's face it, for many companies that started with an A Team, they are now running with a B or C team. Why? As Steve Jobs said, "A Players hire A Players, B players hire C players. Get it?"
People move from company to company in teams. The same routine and team may work once, but it is not often a repeatable experience. There's a reason the Cavaliers recruited LeBron back to Cleveland - and didn't hire the whole Miami Heat starting line up.
The telco organizations harbor stifling factors: monopoly mindset, legacy systems, federal accounting and regulations, departmental silos and competing internal interests. These factors do not lend themselves to attracting more A Players.
There is also a surprising lack of talent for the new services and skills needed for omni-channel marketing; omni-channel customer service; cloud, managed services, migration and integration. This lack of skill will choke growth and brands.
We see outages and hacks every day. The worry is only about getting a customer. There is little concern for retaining that customer; data security; or a resilient network (4 Nines is good enough).
Many people are choosing smaller organizations to work for. The reasons are numerous but I would think that impact and voice play a major part. In smaller businesses, any one person can have a voice and can see the impact that they are having on customers, culture, and the company. That isn't the case in larger organizations.
Flat organizations (and smaller companies) have less meetings, fewer silos, maybe more transparent governance.
Most financial experts are predicting an economic slump in 2017. It won't matter which candidate wins the Presidential election, a slump is coming. We have under-employment; increasing number of freelancers; and a stagnant wage. None of these components inspire an economic engine that is fueled by consumer spending.
ARPU for cellular, cable and VoIP segments have been fairly constant over the last 4 years worth of data I could find. Bandwidth and voice revenues are actually shrinking. Total telecom spending from 2013 to 2014 shrunk $6 Billion dollars according to MarketResearch.
Growth will be hard to find. We are seeing a price war in cellular accompanied by escalating customer acquisition costs.
Hosted VoIP is experiencing a similar battle for customers that is increasing the cost of customer acquisition. Rising SPIFFs and other compensation are being used to grab both market share and channel partner attention.
PBX vendors are NOT crashing and burning as many had predicted. Premise PBXs are still being sold and installed by a robust band of vendors - Mitel, Shortel, Avaya, 3CX, Fonality, Zultys, Panasonic, NEC, Siemens and more.
We are half way through 2016. No big winners. The Twilio IPO was a surprise. Vonage spending all of its acquisition money for the year on Nexmo, Twilio's competitor, seemed strange, since there were Broadsoft clients they could have picked off instead to take a big step forward in the race. Slack and all the Skype4B hype are little surprises.
2016 is half over - and so many companies have either done M&A or played musical chairs that I expect nothing magical to happen in the rest of 2016. And I look at all of this and wonder what 2017 holds.
ASIDE: telco versus cable consumer data.
]]>The ecosystem is the environment around software like Apple, Amazon, Google or Microsoft. It stretches pretty far and runs up and down the stack. It isn't just horizontal; it is vertical too. It makes the company pervasive in your life.
The brand of the iPhone became a status symbol, ease of use, security, luxury, and becoming part of the clique - the Apple/Mac/iOS clique. (I am often told I don't get it because I am an Android/PC guy).
The iPhone, and then the Samsung line of phones, is now the promise of a digital leash. Anyone can contact you, any number of ways at any time - voice (rarely); text; messaging on Kik, FB, whatsApp (encrypted); Snapped at; tweeted at; DM'ed; and on and on.
Due to ubiquitous cellular networks and not quite ubiquitous wi-fi, we can look anything up; research and buy; and even pay with this little device. This little device that people would not give up despite the growing expense - monetary, health, privacy.
Now ... that same consumer is being asked to buy a desk phone to go along with your state of the art unified communications platform. How silly is that?
They have a phablet in their pocket that has more computing power and more applications that the IBM 3033 mainframe I used in college at RPI by a thousand-fold. Yet you want them to still use a desk phone like it was 1999? The whole idea behind cloud is flexibility, mobility, scale and productivity.
The beauty behind the iOS app is that it looks similar across devices - laptop, tablet, phone.
Users are not adopting UCaaS deep enough or broadly enough to be sticky. Partly because UCaaS means that they have to Change (and people hate change). Party they haven't been trained. Partly the story they have been told sounds awful.
Along comes UC-One revision 21 on Broadsoft, now there is a softphone and mobile client that is similar across devices. Now you ease of use, elegant design, a Slack-like interface and functionality across devices. It has presence, chat, video and voice calling, click to call, drag to conference, integration with Office365, universal address book - all in the app.
There is no need for a desk phone. This will run on your PC, laptop, tablet and phone. Up and running as soon as we port the number.
As slick as it is, only DSCI, soon to be a TelePacific company, is running revision 21 in the USA. This isn't BroadCloud; this runs on DSCI gear.
It has been awhile since I have seen UC-One. It looks like this could help make the desk phone obsolete.
The funny thing is that there is a PR firm emailing me press releases about new handset manufacturers entering the market (Yeastar being one of them). Polycom has likely peaked on the number of handsets that they will sell (or has one year left to peak), since Yeastar, Yealink, Grandstream, OBihai, snom and others are aiming to pick away at the desk phone and location phone market. Jabra is attacking at the speakerphone sector. The DECT and cordless phone sector needs help; it is limping along on dialysis because it needs an infusion of models that work with longer battery life.
For companies with employees who are mobile, virtual, in sales or knowledge workers, which is about 25% of them, a desk phone is a waste of money. Here in lies the softphone problem. ITSPs spend far too much time on the phone debate - how much, lease/buy, RMA. Why?
Probably for the 75% who still want a handset.
Mast Mobile combined an MVNO with a UC company. Cool idea, but the story and go-to-market are lagging. There is also the matter of most everyone has a cell phone right now.
Things are changing. We get caught in the trap of This is how things are done. We always sold it this way. Once we can learn to shift out of that comfortable rut, things will improve.
One reminder: you are not a handset distributor. You are not selling a phone system. You are providing a platform for communications in 2016 that allows for productivity and efficiency. If you don't believe that just go sell bandwidth.
]]>First up is Apple versus the FBI over end-to-end encryption on the iPhone. For privacy nerds, Barry Eisler's new book, God's Eye View, was a scary realization that the NSA has too much reach -- and very little oversight.
Over at AVC, there is a discussion about privacy - or rather whether you think Apple should bother - or if all info will be hacked, why not just let it out to stop terrorists and child porn?? The way I feel: if you make the argument about those 2 extremes, you lose the argument. You don't do things like give up freedom because of a fraction of the users. 99.97% of iPhone users are not hiding, so why should the 99 be subject?
BTW, Your Toaster May Eventually Spy On You, and Your Camera Could Kill Your Kid
SAAS
5 things about the SaaS industry. (I tend to extrapolate data from SaaS to the UCaaS vertical).
CLEC
Layoffs at EarthLink AND they sold off the IT division. Layoffs at Windstream too. If you are laying people off and cost cutting and you are in the C Suite at a telco, please pink slip yourself too because you are not fixing anything!!!
Running a CLEC is not just about controlling costs. It requires a Strategic Plan that is executed to properly. EarthLink had a couple of plans that just could not get executed. Talent is important but so is Culture and a Vision that the talent (the employees) buy into and want to see succeed. There needs to be a feedback loop.
Tom Peters really needs to keynote a telecom event. Or one of these CLECs should hire him to help you over the hump of failure.
CONFERENCING
The founder of Vidtel, Scott Wharton, is over at Logitech, who just unveiled a Breakthrough Group Video Conferencing Solution, which turns any meeting room into video-enabled collaboration space.
Metaswitch just announced Accession integrates with Zoom Video Conferencing.
After buying video conferencing company, Fuze, ThinkingPhones changed its name to Fuze.
PanTerra Networks Overview in 2 minutes 19 seconds - UC, Storage, Slack, analytics and more.
Communications, Collaboration or Workflow? Forbes article. NoJitter has a similar article about adopting UC for work flow.
Patent troll sues Apple, Verizon and AT&T for $7B in Various Patent Infringements!
Avaya vs Cisco in mid-market <-- as if that was the battle! The battle is with Microsoft - and it might be with Slack in 2 years.
WHY TIDBITS???
I write columns for Channel Vision magazine, Internet Telephony and Cloud Computing magazine plus this blog, plus work as an agent and consultant. Not everything that happens is worth 350+ words. Sometimes just listing the stuff that is crossing my desk helps me to tick off the puzzle pieces so that later I can write 700 words about a trend or an idea or whatever. So there have been a lot of tidbits posts especially in the last year, but it is so that you can quickly consume some industry news and I remind myself of stuff happening.
Thanks for reading!
]]>No one makes voice calls any more. It is all text and chat. These simple communications have been enhanced to include peer-to-peer video calls in the same vein as Facetime and Skype. WebRTC has allowed WhatsApp and Facebook to add calling features to their messaging apps, pulling even more minutes from carriers. (Most of this revenue is now in mobile data buckets, which means just 2 carriers get most of the money.)
The real disruption in business communications, the last bastion of good revenue for carriers, is being done by non-telcos. Twilio is just one example of elastic communications from a non-telco. The bigger news was the Slack-Skype integration.
I saw a list of forward thinkers of VoIP and it was a list of CEOs. Only one company on that list is making any noise at all. The rest are just staying the course, while the course is changing around them.
If comms is all about mobile, shouldn't the forward thinkers being making a dent in mobile, SMS, chat, IM, presence?
Video, security, analytics, APIs - see the lies of Highfive, Redbooth, Ringio, RogerVoice and Sinch - are the key components to be adding to the standard UC product offering.
In CIO magazine, "Given the cost and complexity of implementing UC&C .... When making those decisions, CIOs and other IT leaders listed these factors as the most important when selecting a UC&C vendor:"
Nice infographic about the CIO UC&C study.
Reviewing those 4 factors, forward thinkers would be looking at encrypted chat, better deployment, improved user and admin portals, and APIs / integration.
There are apps that you can add to your offering for encrypted chat, like Wickr or Signal or OpenFire server or Pidgin. For API, you could utilize a service like Zapier to help your users mashup tasks for productivity.
Or on the small business side, the rise of Personal Assistant apps in the past two years along with the tsunami of information, means that a better unified inbox, search, curation, prioritization are all things that users are looking for.
Have you looked at Cloze, billed as a relationship management software that "keeps track of your email, phone calls, meetings, documents, Evernote, LinkedIn, Facebook and Twitter. And everything from dozens of other services." Unified messaging beyond just the concept.
I'm not saying if you have to do this stuff, but I am saying that you should be trying new stuff. New ways to deploy, to remove friction in the sales side or the implement side or the admin track. Analytics to the call logs. Endpoint management. Business Process Improvement. Security for no other reason than terms like HIPAA, PCI and Sox. Encryption of data at rest whether that is call recordings, vociemail, faxes to enable peace of mind for the HIPAA/HITECH admins. (Rackspace has a way to encrypt databases here.)
Otherwise you will be selling cheap voice against a real disruptor.
Another reason to add something to your product offering is to have an upsell opportunity with your current clients to make them stickier, more productive and add some ARPU.
]]>I tend to agree with many of her points.
We live in an age of disruption. "Companies today can turn ideas into reality in a fraction of the time it took just five or 10 years ago."
"In order to thrive in this new era, enterprises must build flexible IT infrastructures, find valuable insights in data, proactively deal with cyber threats, and provide rich digital experiences anytime, anywhere and on any device."
We are caught in a world of apps that resemble the days of AOL and Prodigy, online services that were walled gardens. That evolved with the advent of Netscape and the world wide web to a richer experience that only grew when the connection speed grew. Then we simplified it back to apps. It is always a pendulum swinging.
Mainframe computing and dumb terminals gave way to smart terminals called PC's. Now the smart devices are back to talking to the mainframes (cloud computing). Pendulum swings.
The next evolution will be integration of these apps with other stuff. I don't mean bloatware. I mean like the way Uber connects all the pieces together for taxi service, but also for delivery and courier service. I am guessing that Amazon and grocery stores - andDrizley - are looking for ways to leverage UPS, Fedex, Postal Service and Uber to deliver same day and cost effectively. Scale it and stack it.
We were promised single sign-on in the 1990s. With Google/Facebook sign-on, it is getting closer, but it would be nice at work to log into one browser window and have most of your work environment and apps right there. It is coming... slowly.
Today, we are trapped in a world of desk phones pulling us one way and cloud pulling us another. This is just one hurdle.
Most businesses are living with just one foot in the cloud world. Change is a challenge for all businesses - and people. However, cloud is about change. It is about flexibility, opportunity, productivity and even some negativity, like breaches, down-time, and learning new procedures.
Master Agents talk about "being born to cloud". I wrote about Net-Head versus Bell-Head in 2011. It took the industry four years to catch on.
Seth Godin talks about the Connection Economy. "The internet is a connection machine. Virtually every single popular web project (eBay, Facebook, chat, email, forums, etc.) exists to create connections between humans that were difficult or impossible to do before the web.," writes Godin.
We sell that connection, that platform for connection.
Next, we are selling the Idea Machine. The platform for integration, for idea generation, for turning those ideas into reality.
"We're now living in an Idea Economy where success is defined by the ability to turn ideas into value faster than your competition." - Meg Whitman, Chief Executive Officer, Hewlett Packard Enterprise
What are you selling when you are in front of a business talking about cloud? You are selling the promise of competitiveness. That the platform allows for communication with employees, customers, partners -- and it allows for collaboration. The platform should help the HR department hire; the sales teams to sell; the customer care team to service.
You can't do that having a conversation about the number of phone lines and the number of desk phones. The conversation has to get smarter for change to happen.
]]>PowerNet agreed with me that the key to success in UC has a couple of factors. One, know your target market. And that if that target is 10-500 or 100-5000 employees, you are already in trouble. You better have a product manager for the various services that will target each segment of that target market.
Deployment, support, customer care and training are the factors that will win.
If you think competing on price is the answer, then you have to cut costs - in deployment, support, etc. You have already lost. You can't beat the WalMarts at price. In our business that would be the cablecos and the OTT ITSPs who will win a deal at any cost.
If you think drop shipping the phones is going to be the way to go, here's the 3 places that your thinking is wrong. (1) Are you better at this than the 3 folks doing this well today? (2) You are still thinking about desk phones! (see below) (3) Do you have an answer for solving churn, returns and acquisition costs?
The drop ship "solution" is great for the under 15 employees - and there are 25+ million of these businesses. This is voice replacement mostly; it rides over the top; it requires QoS; high churn business. And there is still the marketing part of the equation: How do you acquire customers profitably?
If you wanted to go this route, why did you spend the bucks on a softswitch? You could do this with a class 4 or an SBC or a Freeswitch!
In voice replacement (or even in key system emulation), if the customer isn't using the product features for the benefit of their business, they are going to churn (for lower price or better support or better quality). That means you have to sell on benefits, outcomes, case studies (not price). You have to deploy to the design of the outcome. You have to train and re-train the employees to use the system.
You are selling change.
YOU ARE SELLING CHANGE.
Or you are taking orders for dial-tone. Which is it?
"Ninety-three percent of employees that use unified communications (UC) tools increase productivity, according to a recent study commissioned by XO," the press release reads. "The research reveals that the two UC tools having the most direct positive impact on employee productivity are presence detection and multi-channel contact centers."
There is a lot of chatter about desk phones going away. If that were true then VoIP Providers would stop being Polycom distributors and sell the comms platform first and foremost. That isn't going to happen soon. Despite the clamor that it is all mobility, the ITSPs still talk and sell desk phones. If mobility was the answer and end-all, the sale would center around click-to-call, softphones and portals.
There are a number of disruptors in the space (see above). Many apps have video calling, texting and voice calling abilities (WhatsApp, Snapchat, Skype). The VoIP provider has to recognize that integration is a vital step in being sticky. It is also the next evolution for AAS providers. Get out of the silo and connect with other apps. Even RC agrees according to this article on UC. Fonality is getting into the integration game as well. Integration drives productivity - which is the outcome you are selling. (Vonage didn't buy gUnify by mistake.
"According to IHS research, 85% of organizations are using smartphones as part of their UC strategy and 79% view voice integration with their business apps as critical." [source]
If you think mobility is the only saving grace, re-think your service offering. It needs to contain integration, sound design for outcome driven deployments, training and re-training and customer care (not support, care!*). None of this has to be sold on price. Only 40% of the buyers use price as the sole factor; that means 60% know price is not everything. Those 60% have to be sold on the value of your offering; sold on the outcomes in productivity and efficiency that your platform can deliver. (BPI!)
It has been 12 years since I first saw Hosted PBX. In that time, 15% penetration. Something has to change for that to change.
SIDEBAR:
Robert Scoble announced that Rackspace will be re-selling AWS! You get Rackspace's fanatical support for your AWS finally. People will buy support. Always have, always will. Rackspace has a culture of fanatical support. There is a $1.8 billion dollar business model around support.
]]>I recently explored how one client company used Slack. Everyone liked it; however, it didn't really work. It lacks real presence; notification if message seen/read; a way to escalate the message to a phone call, etc. It really was just a messenger replacement. That isn't workflow or collaboration.
I think stand alone apps like Snapchat just aren't going to do it. Office365 with Lync/Skype and Google with Hangouts have full capabilities for collab, comms and integration. With the add-ons to Gmail, that platform gets richer and more useful (if you have enough memory to run the darn thing; it is such a memory hog.)
The buzz about Office365 is growing because all the work is being down to integrate voice and Skype/Lync with the other apps (like here). That is the first step in what has to happen. And it doesn't have to be Google or MS, but who wants to build another ecosystem? Well, someone will build one because we build instead of buy in this industry.
Enterprises aren't happy with the current out-of-the-box UC&C solutions. There are pitfalls with each software deployment - UC or CRM or other - because of functionality, poor planning, lack of user training, simplistic guides, bungled execution and other pitfalls.
I think it has to be about what you are trying to do, not just what tool can I use. You have to step up to see the desired outcome, how can I get there, and is the solution complex or simple.
Best example I can give comes from CRM. The execs and techies want CRM to touch every single department. That is the wrong reason to get CRM. If the salespeople won't use it or it is too cumbersome, then why bother? It has to be user friendly first, tech friendly second.
When you look at consumerization of IT -- why is that happening? Because people have iPhones and they like the simplicity and functionality of it. They want that at work. They like how easy Mailchimp, Dropbox and Slack/WhatsApp are to use. Simple interfaces, clean UX. Do you get that from the ERP system or the in-house built software project? Unlikely. The UX and GUI took hours of specialists' time to get right. (If you haven't seen what goes into UX, you should.) They want that look and feel at the office.
Unfortunately for your office, you have millions sunk in legacy systems, proprietary systems, and cobbled together integration. Not only does that make for a mess for IT; it isn't user friendly or mobile ready or portable. What now? When workplace evolution to hot desking and remote workers is speeding up.
There are people in organizations that just want a replacement for what they have now - only cheaper. Our industry taught them that. You have to find the business leader who wants to transform the business. That person will have a discussion about business goals and expected outcomes. (Remember to talk about the internal employee resistance to change -- and mention how the training, online learning and guides should smooth some of that out.)
It is changing pretty fast. That means opportunity abounds.
Vonage says there's still 85% of the SMB market left to penetrate with cloud services.
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