Peter Radizeski is Founder and President of RAD-INFO INC. He is an accomplished blogalyst, speaker, author and consultant. He has helped many service providers with sales training, marketing, channel development and business strategy. He is a trusted source of knowledge about the telecom sector. His honest and direct approach make him a refreshing speaker.

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Top 2 Lessons from Amazon

Amazon is a lot of things including too big to fail and not paying its fair share of taxes while it Craigslists a lot of economic sectors.

However, Bezos is one sharp cookie. My bet for smartest CEO in America. One lesson I take from him is plan long term.

Most corporations look quarter to quarter; that is not strategic. They are paying attention to stock price and investors; not customers.

So lesson one is have a long term strategy. Where is the puck going? Not where is now (or worse where has it been)?

Lesson 2 is take all of the friction out of sales that you can. People say that they shop at Amazon because it is cheap. (They say the same about WalMart but actually in both cases they are not always the cheapest!) It is about convenience. It is fast with great UX design – the website, the app.

Wal-Mart e-commerce is clunky. Sears is too. Find a store; is there inventory; wait… wait; more hoops and hurdles. That is all friction!

Waiting on quotes; no e-signature for paperwork; additional paperwork; lack of communication through the FOC date; these are all friction in our industry.

Amazon lets you track every order. And handle returns online in a quick, painless process. Are any of your customer facing processes painless or frictionless?

It all comes down to frictionless customer experience (CX) which is lesson 2. Your Lesson 1 should be to improve your CX until it is frictionless.

What Does All This Mean?

I missed the announcement that West acquired PhoneTree.

Some of these acquisition like Glip, PhoneTree, Fuze, etc. have been either acqui-hires or functionality fill-ins. In other words, buy it, don’t build it! (Smart strategy actually, because you get some revenue as well as talent and functionality.)

Much of the acquisitions in UC space have to do with 2 things: too many players, not enough growth; and I-have-no-idea-what-is-happening!

Star2Star and Blueface is a good example of “We took VC money and didn’t grow fast enough.” There are plenty of smaller examples of this.

TechTarget made a good point:

According to Gartner’s UCaaS Magic Quadrant, Star2Star, based in Sarasota, Fla., is a niche player with competitive pricing and a hybrid architecture that offers high reliability over low-speed broadband networks. However, Star2Star is smaller than other providers in the market in terms of revenue, number of employees and capital structure. The company also lacks brand recognition because of its channel-only sales approach.

RC spends 60 cents per dollar on sales & marketing. While some would say that isn’t profitable, it does fuel growth and brand. Isn’t that the name of the game right now?

Fusion (+Birch) said organic growth was less than 4%!! And instead of spending like RC on marketing, acquisitions hd a lower cost of sales. I take that to mean: we suck at sales and marketing!

You have to wonder a few things: What does that about not just the Brand, but also service delivery and customer retention?

EVERYONE says churn is low to zero. Everyone is full of shit. If you never lose a customer, revenue and margin should both increase every quarter.

BSFT getting bought by Cisco is an example of what are we doing? For both companies. They were both stalled. Not sure if together they can get the party started again. We’ll see.

I thought that Siris (the PE firm that owns Polycom, Tekelec, PGi and Airvana) should have acquired BSFT. Apparently they made a swipe, but didn’t want to pay the premium.

So to summarize: too many providers; not enough growth; no brand; all niche players.

There will need to be much more consolidation.

We are 15 years into Hosted PBX (or UCaaS or Cloud Comms) and if you aren’t growing, you are either stagnant or voice is just a small part of your business.

On another segment of the VoIP Market:

Polycom+Obihai, Vtech+snom, Mitel+Aastra, Mitel trying to grab Polycom are examples of too many vendors resulting in minimal growth. And in the handset space, we have peaked. It just starts declining at this point. Too many on the grey market. And many sales are app/softphone or browser based at this point. If there is a handset it is likely a bluetooth headset.

VoIP M&A in 2018 Vol 1

Well, 5 days into 2018 and we have some M&A activity.

First up, the newly merged entity called STARBLUE, which is the result of Star2Star merging with Ireland’s Blueface. Star2Star is a hybrid provider based on Freeswitch that has on-premise hardware (Asterisk box) at the customer premise, gets SIP trunks from Level3 or other, and has some elements in the cloud (like voicemail). Star2Star was mainly channel sales driven. Blueface is a member of the Cloud Comm Alliance and is a Broadsoft shop. Weird pair.

Tired of these articles (mainly written to promote the stock): Why Cisco’s Acquisition of Broadsoft Is a Strategic Fit. “BroadSoft owns about 19 million subscribers and is a provider of cloud calling, contact center solutions, and other services.” That is NOT true. Most of those subs are owned by the BSFT client. And most are SIP trunks. True, BSFT has a white-label division (that the VoIP Logic acquisition bolstered) but they don’t have 19M users directly.

BTW, a number of BSFT shops are dropping BSFT for Netsapiens and other platforms.

Polycom (owned by PE firm Siris Capital Group) is buying Obihai. This is a consolidation in the VoIP end-point space, not unlike snom-Vtech or Mitel-Aastra.

Element VoIP, a Tampa Florida based Hosted VoIP provider, has changed its name to Viirtue. That should be no less confusing for people to find. Element recently merged with another Netsapiens provider, so this name change is kind of a launch.

IP Centrex to Hosted PBX eventually it was called Cloud Comms, then UCaaS now Unified Collab.

This is interesting (and will make Craig Walker sad): Report: Google working on major G Suite improvements, including ‘Wolverine’ VoIP service.

Even some SD-WAN M&A: Martello Technologies, the provider of performance management solutions for real-time communications, announced today that it has merged with SD WAN network performance and business continuity company Elfiq Networks. [source]

One Thing to Expect in 2018

Change is the one thing to expect, even embrace in 2018.

The channel is aging. Some thought they would be retired by now. Unfortunately, circumstances have changed so retirement is pushed out. Revenue is declining. Ask any carrier or any agent.

I think we will see more M&A in the channel partner companies.

Master agencies face declining revenue alongside increased quotas. The vendors expect more from the agencies. More means added expenses for staff like back office, agent support and engineering (to g=enable bigger or complex sales).

We have seen mash-ups before – like TSX. I was surprised that there were not a few other mash-ups like this that create something of a smaller Agent Alliance umbrella.

It will be interesting to see how many partners merge or just sell out. It isn’t as lucrative or fun as it was when most partners started in the channel.

Some agencies are morphing to MSPs. Why? To fill the voids in tech talent that customers need. Some VARs became ISVs (software and integration shops).

What will agents do?

The last of the CLECs – the bastion of the agent – is shifting to managed services and cloud (UCaaS, Contact Center, SD-WAN, security). Agents HAVE to transition too!

All of this has one glaring hole: service delivery!

Service Delivery is Opportunity, where partners can make money. Project Management (PMPs), software integration, user training, network design, installation, monitoring and repair are all areas that partners can expand into.

We’ll see if any of them do in 2018.

2017 Was Quite the Year

2017 will be known by many as the year of Bitcoin and crazy politics but it was a year of massive M&A. “M&A across the media, information, marketing, software, and tech sectors, reached 1,500 transitions valued at $160 billion total during the first three quarters of 2017, according Jegi’s research,” according to Channele2e.

Data Centers were hot, hot, hot – with a bunch of transactions and consolidation. Equinix buying Verizon/Terremark; Cyxtera buying Centurylink; and many other mergers and acquisitions.

This year was when the channel finally woke up to Cloud. This was probably prompted by buyers clamoring for some hard intel on cloud – what it means; what the benefits are; and are there any case studies.

It was also the year of AAS (as a service). AAS reached epic proportions including Hardware-as-a-service, Database-as-a-service and Technology-as-a-service (rolled out by the VAD, Tech Data).

It was the year of data breaches, hacking and especially Ransomware. Companies took advantage of this by ramping up cyber-security. Cloud backup services also newsjacked the ransomware scare to let customers know that daily or hourly backups of data can be good insurance. This at a time when cloud backup is consolidating due to far too many vendors and too little revenue for the enormous CAPEX to get started.

5G, Skype, Slack, SD-WAN, the FCC, Net Neutrality and blockchain were all popular topics.

It will be more of the same in 2018. Lots of M&A especially in cloud, fiber and managed services. (Companies are basically doing acqui-hires by buying an MSP for customer base and talent/skills).

We will hear more of the same: 5G, SD-WAN and blackchain. Not certain we will hear much about NN, Slack (unless they get bought) and Skype (which is morphing into MS Team).

To be the Trusted Advisor you have to be familiar with a lot of stuff but that doesn’t mean that you have to be an expert. You just have to be familiar enough to know the name of the vendor that can provide that service.