Fiber Connect 2023 is a happy show right now that is leveraging the forty-plus billion of government dollars going toward fiber deployment and the tens of billions of private equity money chasing that!

This show focused on putting fiber in the ground. There were a number of vehicles to help with that. (see below). There were different types of fiber – mesh and painted on?! A good amount of software for digital twinning and mapping out the fiber deployment. For example, “‘Render Insights,’ a data intelligence platform set to revolutionize network deployment with interactive visualizations, ensuring faster, high-quality results for network operators and contractors.”

Non-trenching fiber deployment would change things. See here.

Did you know their was a federal permitting council?  Details here and here about how the council is going to ease the permitting for BEAD winners. Some permitting advice from FBA-NTCA here.

A little bit about how AT&T looks at federal funding HERE. The two things that were mentioned often during the show: “local policy mandates for open access or pricing policies” are things that worry PE as well as operators. They all want the money free and clear (and the ACP funds as well) but without any regulation?!

How does an ISP figure out which funding source is the right fit, and what do they need to know about applying for and actually spending that money? A panel discussed it at the show.

“When Calix researched over a million subscribers across the providers it works with, fewer than 20% opted for speed tiers at 1-gig or higher.” So how do you sell fiber and increase the take rate? Know your Buyers!

Now that the funding spigot has opened, the next two worries are supply chain and labor. Vendors like ADTRAN say that they are forecasting to be a month ahead of supply. The “Built in America” NTIA caveat will burden the supply chain, but vendors are being positive. (What else can they do?)

On the labor side, FBA last year put a plan in place to train fiber techs. There were at least 3 organizations at the show that were schooling workers for the FTTx deployment.

SPIFFs are back bigger than ever – 7x-10x for UCaaS sales. I predicted that things would slow down as at least 3 providers played with reducing commissions. There is more at play here than just that, but it was a factor.

• Return to Work.
• AI product enhancements without any concrete examples.
• Buyers maybe waiting for the next best thing to come out.
• Price compression.
• SPIFF decline.
• Macro Economics
• Longer sales cycles.
• UC+CC is harder to sell than PBX replacement. And AI just makes it all harder.

2Q was a disaster for 8×8. Revenue was down 2% year over year. RingCentral with all of its bluster, announcements, partnerships and international country count only had a 12% YoY ARR increase. Zoom had a bad quarter with just 3% growth (and it is laying off 15% of its workforce).

Net2Phone and Weave had good quarters, 22% and 17% respectively.

Partner sales make up 30-55% of sales for cloud comm providers. When you play with sales compensation for partners, they sell other stuff. There are 2000+ providers selling HPBX. If Zoom is hard to work with in the channel, and the customer must have Zoom – sell it from CallTower. Resellers are a partner’s friend.

The big news today was that Madison Dearborn is shopping Intermedia. They want 20X the EBIDTA of $50M ($1B). I don’t think they will get anything more than $650M due to the revenues containing a healthy component of email & hosting.

RingCentral launched a simpler CCaaS product, RingCX. Vlad is replaced as CEO by an HPE veteran as Vlad becomes Board Chair or something.

Cloud Comm Alliance started an audio get together today, see HERE.

Quite a few providers are beating the Microsoft Routing for Teams drum. Telecom is always circular. We are back to selling dial-tone and minutes.

Verizon acquired Bluejeans video in 2020 for between $400-450M. Bluejeans had raised $175M to get to the place that Zoom went – but never got close. After just 3 years, Verizon is shuttering Bluejeans. Verizon has annual revenue of $136 Billion. Any product that can’t hit $100 Million quickly loses head count and interest. $100M is a very successful business but not within the confines of a telecom giant that spends $15-18B in CAPEX mostly on upgrading and running its networks – 4G, 5G, FiOS, MPLS, Ethernet, etc.  VZ also sells Webex. Cisco is a big partner of theirs. It also sells MS Teams especially on mobile. It has the video segment covered. This is part of a long list of acquisitions by Verizon that have failed: Yahoo and AOL come to mind.

 

 

Sales comes down to 2 things: Fundamentals and Time Management.

We have 2 new webinars that every sales rep should take, but especially if you are selling cloud communications (HPBX, Webex, Skyswitch, NEC Blue, Intermedia Unite, etc.). Each webinar is 45-minute webinars with one on Time Management and the other on Discovery.

Sales Reps serious about their success will want to sign up for the 2 webinars plus 6 weeks of sales coaching. Each week for 1 hour there will be one topic of sales that will be worked on with the group. Learn from others as well as get coached up from RAD-INFO!

We have years of experience selling telecom at RAD-INFO. We have trained over one thousand sales reps. Improving 1% in any step of the sales process will net any sales rep 10% in sales growth. If you Prospect smarter, Target better, ask better questions, close faster, etc. Just one sales nugget applied will have lasting effects!

Join us for these two sales webinars and then for 6 weeks of coaching.

Time Management on Wed., Sept 6th at Noon Eastern and  Sales Discovery on Wed., Sept. 13th at Noon Eastern. Then for the next 6 weeks at Noon on Wed. will be sales coaching!

The 2 webinars and 6 weeks of coaching (a $1549 value!) for just $349!

 

Just the 2 webinars are $49:

 

With all of the money in residential broadband, most of the M&A in the ISP market will be to scale FTTH. There are many Fiber ISPs and Wireless ISPs (FISP & WISP) that have been invested in by private equity. These companies will want out in 2024-2026.

Frontier announced that they will be part of any ISP M&A. Apollo owns half of CenturyLink/Lumen that they acquired. Many other PE firms – GCDR, Oak Street and more – own FISPs. These will all merge into larger entities, especially as the BEAD grants come due. The ability to put fiber in the ground under a timetable and then sell enough of it will be hard for all of these companies. It will cause at least a few to cash out.

Also, over-building. More than a few ISPs including Charter, AT&T and FTR have mentioned on the record that they will  be building fiber outside their region. AT&T is doing it in a JV with a PE firm. This will be interesting to watch as well.

With all the focus on fiber, service providers with other assets will get less value.

Service Providers that mostly resell will likely not get acquired. The low margins in resale coupled with the lack of assets make it a good business to be in if you run it right, but not a great business to acquire. NITEL might have found a great buyer but that was the exception not the rule.

ISPs with their own voice switches (like BSFT) won’t see much value in that asset. It likely will be seen as a liability in a pure play ISP roll up. No one has found a way to make rolling up BSFT seats into a profitable business. A few have tried.

Data centers are hot but only as stand alone assets that can be put into a REIT.

MSPs are another hot sector – but again as stand alone assets. Buyers don’t want non-pure play. They want scale. They want to add contracted subscribers to their current platform (ConnectWise, Kaseya, et al). The largest expense is labor in an MSP. It takes scale to leverage that labor for profit.

Most of the M&A that will occur in the next 3 years will be about hard assets. The MRC M&A has been ongoing for five years and is almost played out. We still see MSP M&A weekly, but that will slow up as well now that money is expensive and none of the roll ups have taken the industry by storm.

Even the cyber-security market has seen incredible layoffs in the last two years, despite an increase in cyber attacks and ransomware. Businesses are buying cyber insurance in lieu of a heavy investment in cyber-security.

What is Sales Quota?

Quota is  the sum of Average sales size multiplied by average sales per month.

Sales cycles are lengthening; Average sales size is shrinking.

Quotas are meant to challenge sales reps and motivate them to sell more. A common rule of thumb is that 80% of your sales team should be able to meet their quota most of the time. Adjust quota accordingly.

If the quota is $4K, and the average sales size is $800 it takes  5 sales per month to meet quota. What is the sales cycle length? Can a rep close more than one deal a week?

How many sales reps hit Quota?

Only 60-75% of reps will hit quota.

“Salesforce estimates that 57% of reps are expected to miss their quota this year.”

“Only 28% of sales professionals expect to meet or exceed quota in the upcoming year.” SF 2023 State of Sales Report.

Look at the Quota attainment ratings HERE.

What is Sales Ramp Up Time?

Sales Ramp Up Time = Average Length of Sales Cycle + 90 Days

HubSpot reports that it takes new reps an average of 3.2 months to fully ramp.

Hiring and keeping sales professionals has never been more difficult. In fact, 52% of sales and enablement leaders say that finding strong sales talent is one of their top challenges. And turnover is estimated to reach 25% across sales organizations in the next year. – Selling Power magazine.

A strong onboarding program is a key retention strategy. Not if it’s rushed, though. Here’s how long it takes to onboard a new rep, on average:

Ready to interact with buyers: three months

Competent to perform: nine months

Top performer: 15 months

While this might seem like a considerable investment of time and resources, the alternative is far worse. The cost of turnover typically ranges between 100% and 500% of the seller’s compensation. In one example analysis of seller turnover during the onboarding program, in which four sellers left, the turnover cost was over $600,000.

 

60%-87% of B2B Buyers prefer self-service, according to this article.  That is misleading because what it really means is that the Buyer Journey is self-serve, getting info, recommendations, online reviews. They interact with a sales rep toward the end of teh journey.

This indicates that Marketing – your website, blog, social media, reviews – are now more important than ever. For B2B service providers that neglect Marketing, it makes it harder for sales reps. They have nothing to lean on: no slicks, articles, testimonials, reviews, use cases, etc.

In most cases, the sales rep is the sales development person, the inside sales person, the outside salesperson, and account rep. This is a lot of skills to expect in one human.

Looking for help TRAINING  your sales team? For on-boarding help? For a performance review program?  Call RAD-INFO INC @ (813) 963-5884