You have seen the lists of UCaaS, CCaaS, SD-WAN, CPaaS, and so many other lists. You have seen analyst reports for the market leaders and market TAM. Most of it is wild opinion and bullshit.

Next time you see a press release for a market size and leader report not how the list often includes companies that no longer exist like Jive or Shoretel.

I saw one list for UCaaS that mentioned MITEL. Mitel exited the UCaaS game. They may sell unified communications but not in the cloud. They can’t now. All they can do is act as a sales agent for RingCentral.

CF had a list of UCaaS providers also. Nothing like click click clicking through 20 slides to see the list.

I need to ask Jon Arnold how AWS is a major UCaaS player. Is it because of Chime? I get AWS is a CPaaS and CCaaS provider, but I have never been invited to a Chime call. I don’t even think Nextiva bundles Chime any more. So how?

Another analyst, Raul Castanon from 451, put Alianza on the UCaaS list. Alianza is a white label softswitch, chasing to replace Broadsoft. So if they get on this list, I can see how BCM One/Skyswitch  and 2600Hz got on the list. Why was Reinvent Telecom not listed? How did Jon forget about Ribbon?

This list should have been better defined – are we talking platforms, white-label, retail, UCaaS or UC&C or something else? Truthfully, if the trade press and the analysts can’t define UCaaS for publication, how the hell would a buyer ever know what they are looking for?

How does Slack make a UCaaS list?

I know how lists and awards are done, but put some structure around it.

Do you realize Omdia/IHS/who-ever-else-makes-a-list has had the same 10 players since 2015? and 2017?  Zoom, Cisco Webex and Microsoft Teams replaced some names on the original 2015-2018 lists, because those companies had M&A transactions.

• West became Intrado, which then sold off UCaaS parts to Ooma and Fusion, so they aren’t in the game anymore.
• Star2Star became Sangoma.
• Windstream tanked itself into bankruptcy and didn’t really recover. Their Broadview platform couldn’t keep up, so reps just sold Mitel units.
• thinkingphones became fuze now 8×8.
• Avaya resells RNG for UCaaS as ASO.
• Shoretel is Mitel – and is a sales agent for RNG for UCaaS.
• Jive is GoTo.

There are over 2000 service providers offering UCaaS in North America. Here are some UCaaS providers that don’t get much press:

• net2phone – quietly growing UC+CC with no debt. Owned by IDT, an international LD carrier.
• broadvoice – also quietly growing a UC+CC business
• Weave – $130M+ publicly traded cloud comms provider for clinics, vets, dentists and healthcare.
• NEC – as one of the largest PBX vendors, their BRIDGE product that adds mobility, business continuity and other cloud functions to an on-premise PBX is a huge bonus for customers still glued to boxes. Also, NEC allows for upfront commissions and besides an Agency plan, offers something like white -label for maximum control and margin for partners.
• Panterra always had good features early – like a dropbox-esque function, end-to-end encryption, and browser-based, but no marketing to speak of.
• SimpleVoIP in Chicago which specializes in retail and restaurant.
• Evolve IP is over $250M in revenue; is PE owned; and hasn’t been the same since the founders left. Big Microsoft shop that also has a Broadsoft switch.
• BluIP which just chases hotels. This is the pivot that most providers need: to a vertical or three. Integration is the key to significance.
• Europe based Wildix has 1.2M users according to the new manager of North America.
• CallTower is a weird one offering Zoom, Microsoft and Webex.

There was a HippoUC paying 40 points in commission. At ITEXPO, there are always a few new UCaaS providers trying to make some headway in a crowded, uninteresting market.

Mobile UC will be the next phase of this game. Sure the noise is around UC+CC for pure play UCaaS providers, but they have to figure out how to sell UC+CC, since that is a consultative sell, not a transaction like PBX replacement, I don’t think it will work well for them. It will be about packaging and story telling. Nothing they are good at.

AT&T has a long standing deal with RingCentral that they brand as Office@Hand. No idea if that is native dialer or not, but AT&T just did a deal with Webex.  Cisco Webex Go is native dialer on the cell phone – and connected to AT&T Mobility via IMS, which is something Sprint did with Broadsoft providers 10 years ago. Sprint cell phones were an extension off the Broadsoft. This is a smart move by AT&T Mobility but late to that game as well. Sprint did it in 2014  and in 2016 VZW launched OneTalk.

OneTalk, a Broadsoft based, mobile first, native dialer UCaaS that VZW sells for $15 per seat. VZ also did a deal with Microsoft to make MS Teams the mobile softphone. This is Microsoft’s end game: every telco will have a big pipe to Azure Telecom in order to connect to the Metaswitch in NFV, the vSBC and connect to Teams.

Nothing from T-Mobile despite having a big investment in Dialpad.

Google has an investment in Dialpad as well. Google hasn’t really crushed it with its many components. They have Workspace which is their UCaaS product. Google also has an MVNO called Fi and its ISP, Google Fiber. It has yet to put all those pieces together. They even put too many hurdles around bundling them. I don’t really know what the adoption numbers look like for Google Workspace. They leverage UJET for CCaaS in Google Cloud.

Dialpad is at $200M in ARR. Google would be smart to buy it and scrap their myriad attempts at putting forth a competing product offering.

There are thousands of options for Cloud Voice.

Last Thought:

With the top telcos reselling the same thing – RNG – and most of the providers have the same HPBX features, what is the difference? I have no idea. SPIFFs, commissions, and how easy to work with before the sale. After the sale, you find out how bad service delivery and continuing customer service is.

 

Like many public companies, the macro-economics!  Sales cycles have lengthened. Upselling is slower. I don’t know how win rates are stable when sales take longer but okay.

The Number 1 Competitor right now in telecom/UC: Status Quo!

We are seeing many deals being price sensitive or people just not changing.

Now for sales teams. Quota is an ugly word. It is usually an arbitrary number. It should be calculated on Average Sales Size and Average monthly sales.  In UCaaS the average sales size is about 13 seats. At $25 per seat, that is $325! Most sales people close about 4.5 deals per month. That means quota should be about $2000 as a stretch for a deal flow of $1462.

68% of salespeople did not hit quota in 2022, via Keith Rosen newsletter.

RepVue has 988 sales teams from 435 sales organizations published on our site (which means they have at least 7 ratings), and only 31 of those 988 sales teams (across 30 companies) have more than 75% of the team hitting quota in the past 12 months. That’s about 1 in 33!

Sales is Hard. If they aren’t hitting quota, what other metrics are you examining? We have a set of 5 that we watch weekly.

ARPU isn’t talked about much anymore. There was a time, it was an investor deck metric. RingCentral included it recently to demonstrate that they are not giving it away. The ARPU is roughly $31. However, they have $300M+ in revenue from Contact Center which usually prices out at 3x-4x UCaaS seats. RNG total revenue is $2.2B. About 1/7 is CCaaS. There were a bunch of deals with sub $10 seats.

At $31 per seat times 5.2M users equals about $1.92M in revenue.

Zoom has $4.4B in ARR. 10% of that is phones ($440M). They have 5.5M phone subs. That is $6.67 ARPU. A lot of $5 seat Education deals have compressed that ARPU.

8×8 used to advertise a $15 seat.  Vonage has a $13 seat deal running now. Zoom is at $10. Direct Routing is sub-$10.

RingCentral has the most global telco partners. Yet their YoY growth is nothing to write home about. Avaya, Mitel, Atos, CDW, Verizon, Frontier, et al — and yet your growth is 14% YoY?!

And you claim to have 15,000 channel partners. That number is made up. In the US, most will agree that there are about 6,000 telecom agents. There are about 62,000 MSPs. They claim 15K+ which would be 22%.

That 15K is reduced from earlier investor decks that stated RNG had access to 200K sub-agents. There aren’t that many people globally selling UCaaS. Or we would be a far cry above 20% penetration.

OTHER STATS:

MS Teams is 300M Monthly users out of about 400M business desktops.  Only about 90M have phone licenses.

8×8 Fiscal Year 2023 service revenue increased 18% percent year-over-year to $710 million, 3M paid business users, 60K+ customers; 60% YoY Channel driven ARR growth.  300K Voice users for MS Teams.  Full PSTN replacement in 58 countries/ territories. The ARPU calculation for 8×8 ($710M/12 months/3M subs) = $19.72.

Wildix is at 1.6M users globally.

Netsapiens/CXDO is at 2M.

Every week I see more Direct Routing for Microsoft Teams ads and tweets; more XYZ for Teams. The industry is back to selling dial-tone, minutes and texts.

UCaaS has tanked. The price per seat has declined. Except as phone system replacement, it doesn’t have much sizzle because the vendors never did anything to give it sizzle. They all played follow the leader.

This is for the Product Leaders in the UCaaS space: Quit. You obviously have no idea who your Ideal Buyer is – or even who you are building the product for. You think you are selling Cheerios that will appeal to everyone and you are wrong. PBX sales are not tanking as fast as the UCaaS seat price which means You Do Not Know Who Your Buyer is (or what Pain you solve for!) These are Basics!

If the Product Leaders knew who they were building for more providers would look like Weave and less would look like either RingCentral or Webex.

There are new vendors still entering the space thinking that the market is untapped. It isn’t Untapped. That TAM projection is utter bullshit written for the gullible and the investors. The TAM is wrong because you think UCaaS will replace all PBX, but actually MS Teams is replacing all UCaaS – with 300M monthly users out of about 400M desktops.

It is that number that drives vendors to chase the dial-tone for MS Teams. And, hey, the channel is great at transactional selling. POTS replacement, LD, broadband, now DR4MST.

Product Leaders: moving to UC+CC will be a harder sale. It will require Sales Engineers or at the least Subject Matter Expert overlays who understand the product and the competition. It would be so much wiser to move to a Vertical.

Integrations are where it gets sticky and efficient. However, everyone integrates into to the same 10 SaaS apps. Once again follow the group instead of finding out what apps Your Ideal Customer uses and integrate into that! But no that would be too hard. We would have to identify the Ideal Customer and then talk to them. Eee gads!

Oh and the market will shrink. We won’t be able to say that the TAM is $200B if we only work in 3 Verticals. We will have to say that the TAM is just $3B and we can capture 20% of it, but with stickier customers paying a profitable ARPU, lower churn and a much clearer go-to-market plan.

There are 330K dentists in the US. Take just 10% of that vertical and with 33K customers, you have a business larger than USLEC (26K customers).

You can’t displace MS Teams, but that’s okay. It is mainly collaboration and internal comms. It is predominant in mid-size and large business.  Like Weave, look at ways that you can provide self-serve and improve the customer experience with real world stuff and take out the acronyms. Insurance verification, payment, appointment reminders, scheduling – all this is real world improvement for SMB. All of this is at $75 per seat. They don’t delineate between what is CCaaS or UCaaS or CPaaS – they just provide a solution. That’s the whole point. And if you notice, MS Teams isn’t in that picture.

To get in the mud and fight for minutes again… no thanks. I don’t know many partners who were happy selling $10 seats. And with the commissions changing and, in some cases like RNG, becoming so convoluted, selling UCaaS isn’t worth the squeeze. It is a lot of work when you can go sling other stuff – and right now the channel partners have a Wally World Worth of Products available to sell from Energy to Smart Building to EV Charging to 5G Private Networks to SD-WAN to security, backup, managed services, pro services, AI, AR/VR – why would they get in the mud and fight over UCaaS seats?

Conferences are just networking events interrupted by sessions.

Too many panelists just blather away about their company. Not enough data is shared. Actionable data. Not enough story telling.

I’ll say it again, if you show a video during your session, you should never speak in public again. A presenter’s role is to tell a story. To paint a picture.

I have seen too many videos in the slide deck. It has never made an impact.

May I suggest practice? Get your thoughts together and practice at least once.

Do you know why there is no one in your session? Because too many people have sat through too many sessions that were worthless. Invaluable use of their time. Time isn’t money – it is way more valuable than that. An attendee is trading her time to get a valuable nugget.

This is the problem that conference owners have: how do you overcome the years of worthless sessions?

At least in the early days of TV, they were honest. Now a word from our sponsors. Some podcasts do that (although 2 minutes of ads is too much for anyone).

I don’t know if you noticed but ads are stuffed everywhere – LinkedIn, twitter, every web page, every article, every video. And as an expo producer, the thinking is stuff more sponsored content in there? Do you know why they have to pay to have a session? Because no one would listen otherwise!! The only one happy is the expo producer who got the cabbage.

Now after years of this, after the pandemic, the flood gates of virtual and live events are open – and the competition for attention (and attendees) is huge. So if you want to have a better conference, start with Conference 3.0. Reset. Get rid of the same stale speakers that you have traipsed out on stage often. Get rid of the guy selling his book.

Facilitate. Germinate. Create Value.

Need help? Look at what we are doing at CVX Expo in November in Scottsdale. Or look at the format for Ignite (5 minute with 20 slides auto-advancing) or BarCamp (the Un-conference) or TEDx. This gets audience participation, social mentions, and so much more. It builds community. Trust me, I did it in Tampa Bay.