I was surprised by a post on LinkedIn about books because you would think you would see more posts like that.

That post listed these books;

• Fanatical Prospecting by Jeb Blount.
• Sales Manifesto by Jeffrey Gitomer.
• The 7 Habits of Highly Effective People by Stephen Covey.
• Your Next Five Moves by Patrick Bet-David.
• The Go-Giver by Bob Burg and John David Mann.
• Bill Hicks: Agent of Evolution by Kevin Booth

When I started in sales, I read many books on sales and personal development. I listened to CDs and DVDs from the likes of Jim Rohn, Bob Hopkins, Brian Tracy, Les Brown and Zig Ziglar.

• Bob Burg’s Endless Referrals;
• The Sales Bible by Jeffrey Gitomer;
• Napoleon Hill’s Think and Grow Rich;
• every single book by Seth Godin;
• The Accidental Salesman;
• The Wealthy Barber;
• The Riches Man in Babylon by George S Clason;
• Awaken the Giant Within by Tony Robbins;
• Anything You Want by Derek Sivers
• How to Grow When Markets Don’t by Adrian Slywotzy;
• Creative Thinking by Earl Nightingale;
• Lead the Field by Earl Nightingale;
• The Strangest Secret by Earl Nightingale;
• How to Win Friends & Influence People by Dale Carnegie.
• As a Man Thinketh by James Allen.

I have read many marketing and sales books. Then there was a period of reading books on coaching and consulting (different things). Mingled in there are so many mysteries & spy thrillers for a mental break  (Vince Flynn, Michael Connelly, Barry Eisler, Marcus Wynn, Lawrence Sanders, Ed McBain, Steven Brust, Lawrence Block, Robert Parker, Mark Dawson, LT Ryan and many more).  There are quite a few books on my shelf that I have not gotten to yet like Grit by Angela Duckworth; A Tree Grows in Brooklyn; Create the Future – the Innovation Handbook; The Transparency Sale; and Mindset by Carol Dweck.

I am also a little stuck finishing my next two books: Remote Selling and Channel Sales Enablement. Both long overdue.

What are you reading?

Sangoma acquired Netfortris for up to $80 million. Netfortris is a combo if Telekenex, Fonality and I think an MSP. They are a UCaaS and SD-WAN shop with $50 million in revenue. They have been on a hiring spree for the last year as I watched some friends at TPX move over there.

This is 60K seats and $50 million in revenue to go with the acquisitions of FreePBX, VoIP Supply, E4, VoIP Innovations, Digium (Asterisk) and Star2Star.

In UCaaS, hitting $100 Million in revenue is HUGE. (Read HERE). Under $100 Million has a lower valuation. Intermedia, Weave and Dialpad are all close to or at $100M.

8×8 acquired Fuze in December of 2021. “The deal will be made up of $130m in cash and $120m in 8×8 stock. 8×8 said it will use up to $130.2m to pay off Fuze’s debt and other Fuze investors. Fuze has around 300 enterprise customers, culminating in over 400,000 paid users.”  Approximately $130 million in revenue. That was a good deal: $130M in enterprise users for $250M = 1.9x revenue.

At $68M for $50M in revenue is a GREAT deal — and even at $80M it is a very good deal at 1.6x revenue!!

This leads me to think that there are a lot of fire sales in the UCaaS space. Why? People have been at it a long time. Most started in 2007-ish and have been at it for more than 10 years without really getting a handle on it – like say Zoom or RingCentral.

It is hard to get a handle on it. You need Branding and Innovation and a Value Prop. Service Delivery, LNP, E-911, and now SMS with A2P 10DLC combines to be a lot to deal with for customer satisfaction.  Now UCaaS is getting pushed around by CPaaS and CCaaS. Owners and investors are probably very tired right now. They got a bump during the pandemic but not enough of one. And just when UCaaS might hit mainstream, customers start asking for other functions (hence, the CPaaS and CCaaS functionalities bumping into UCaaS).

Providers aren’t really training users, so they are losing the stickiness that comes with User Adoption and Power Users.

Microsoft Teams is tough to contend with because who wants to just sell dial-tone? And try to work with the Global Admin and other issues like licensing and call routing.

Overall, it is getting complicated out there. It was supposed to get easier. There was supposed to be an exit strategy that involved beaches and fishing.

Another M&A transaction: Poly and HP. HP paid $1.7 Billion for Poly. In 2018, Plantronics paid $2B for Polycom and later re-branded as Poly. This week HP acquired the combined company for $3.3B including debt. It is $1.7B plus debt.

PS

And yet one more!! Lingo Management acquires all the stock of Bullseye Telecom. Bullseye is a predominantly copper selling CLEC.  Lingo Management is Vincent Oddo, who was CEO of Birch Telecom. Birch Telecom was acquired/merged with Fusion (resulting in Fusion going bankrupt like Birch has done a number of times). Lingo was what Fusion didn’t want – like single line small business and consumer VoIP. The release says, “The BullsEye transaction is the latest in a long history of acquisitions that Lingo, or its predecessor companies, have announced in recent years.” Lots of M&A; very little good results from all that M&A.  I am certain their will be the synergistic RIFs in the third quarter.

 

 

Enterprise Connect is back in Orlando in person after a two year covid induced hiatus.

The booths were all large. Too large. Like they ordered a 20×20 and received a 20×30 space but didn’t have the physical booth and furnishings to match. No carpet on the aisles (and my knees, feet and back hurt today). Also, a lot of jeans and sneakers.

The theme was CCaaS, not UCaaS. AI, CPaaS and monitoring & security but not just UC. AWS had a big presence as did Microsoft, Cisco Webex and RNG.

You could tell many smaller providers are trying to fit into the new world that Zoom and Microsoft Teams are dominating.

8×8 was a big sponsor with no booth. Mitel, Avaya, Unify and Atos were absent. Buyers were mainly absent, but I did see 3 folks from Pasco County FL there.

Normally at the Gaylord, there isn’t a free chair at the bar or outside to sit on. Not the case this time. There just was not the numbers of old. And that took away from the energy.

There were two vendors there that were surprising: Lightyear.ai and Cloudscene. Both are brokers – procurement websites for telecom services. This is what Upstack is trying to do and to an extent AppSmart is doing with SaaS. LY and Cloudscene are chasing enterprise clients, not partners.

There wasn’t much in the way of surprise at the show, but it was nice to see friends in the industry in person again.

 

A couple of developments in the mobile UC space.

Verizon rolled out Verizon Mobile for MS Teams. Microsoft just announced Operator Connect Mobile, which will allow your mobile device to become a Teams Phone endpoint.

Microsoft has a study about hybrid work HERE. Does Hybrid work without UCaaS? This article says no.

One of the stats on UCaaS from this story is as follows: “Single-provider UC solutions deliver a 56 percent lower total cost of ownership. As mentioned, UC systems can either be DIY, where companies assemble and integrate point solutions through in-house development. Or, one could subscribe to ready-to-deploy UC suites. Single provider solutions like the latter, unlock a much lower TCO as per a Metrigy 2021 report. This is due to significantly higher IT staffing costs.” Single full stack provider works better unless they are cobbling it together with some third-party stuff in which case the duct tape gets in the way.

In a Hornet Security study on Hybrid Cloud: “1 in 3 companies cite trust issues with cloud as reason for some workloads remaining on-premise.” Furthermore, ” The survey also shows that with experience comes more distrust in the public cloud. Respondents with more than 20 years of experience were more likely to express concerns with the trustworthiness of cloud platforms (34%) than those with one to five years of experience (24%). One-half of all respondents mentioned “legacy systems or software” as another major reason certain workloads must remain on premises. “Application compatibility” was reported as a roadblock to cloud migration for four in 10 companies. Industry regulations such as GDPR, HIPAA and CMMC, among others were also cited as obstacles for cloud adoption by 29% of respondents.” There are many reasons for on-premise and private cloud. And there are great solutions for both.

Here’s the rub about HYBRID: It has ALWAYS been HYBRID. Hybrid work, hybrid cloud, hybrid everything – that has been the environment for so many years. When hardware partners say cloud isn’t for everyone, I roll my eyes. Why? Payroll, email, website, CRM, e-commerce, Microsoft Office365, Google, and on and on – all in the cloud. How many businesses use no cloud apps? Very few. Hybrid work? Salespeople, answering texts/calls at home or on the road, email! All off site. Always on work environ. That’s why everyone is burnt out. The pandemic just prevented people from blowing off steam – and being social which is one of the key ingredients for happiness. But work kept grinding away – and employers have lost sight of everything, except the stock price. </rant over>

Here’s a few other factors in the way of cloud migration: most software projects take a long time – even longer from 500 employees to 5000 to 10,000 – longer (and harder) with global than with local. Rolling out a new comms platform is like switching from Office to Workplace or Apple to Windows. It is BIG! Too many moving parts. Not enough squeeze in the lemon for an exec to godfather it for 3-4 years. And not everything can be easily migrated. Think backup appliance to data center storage array over a 56K modem. These are real problems.

When the office manager still wants her receptionist car on her desk phone instead of even trying a softphone or browser, no progress will be made there. Period.

Gary Kim has “An Ominous Forecast for Service Provider Revenue Globally“. Transparency Market Research notes that half of the 2030 revenue is earned by infrastructure providers, software and platforms; and the other half–or about $1.3 trillion–is earned by “service” providers. IDC estimates that annual global connectivity provider revenue is about $1.5 trillion for 2021 and 2022 (including video entertainment subscriptions). 55% of that is mobile revenue globally. Voice was $170B and fixed data revenue was about $400B. The fixed network requires more CAPEX. And the fixed network revenue is in decline. SD-WAN, broadband, 4G and now 5G are replacing copper services, MPLS, DIA and more. But that is our industry since LD: replacement services for less money.

The migration to mobile internet and SD-WAN favor new competitors like T-Mobile, Comcast and Charter. MPLS replacement hurts AT&T and Lumen/CenturyLink the most. Lumen doesn’t have mobile or entertainment revenues to balance that like AT&T. Lumen is counting on cloud, data center and cyber-security to push its revenue up, while network revenue declines.

Every contract of network or Internet I renew is either double the speed for the same money or a write down in revenue. Since AT&T will only write down revenue when their own sales teams do something like sell Fiber Broadband to replace ADI, partners typically have to move the circuits to a reseller or cable. Either way it is a write down for AT&T – lost revenue, retail to wholesale or keep the customer (happy) and renew at the current lower rate.

SD-WAN was supposed to be new revenue streams for the former CLECs, but it turned out that, like a DVD player, the price declined rapidly. (The only services without price decline: Cable, satellite TV, and radio service. Cable broadband is approaching $100; cable TV is at $200 ARPU; and sat TV has not come down in rates and Charlie says it will die.)

Meanwhile MPLS sales are declining and that was some fat contracts for the ILECs.

Cable at least has been pushing up prices on broadband. According to Doug Dawson, the main reason Big ISPs fought Net Neutrality had to do with a fear of rate regulation under Title II. Not for nothing but if my tax dollars are going to pay for inflated broadband prices, perhaps there should be rate regulation. Also, my tax dollars – and yours – will be building much of the fiber to the home in the next 3 years – not a loan, but grants. Seems lopsided. But I digress.

Even UCaaS is slipping in price. The public providers have to keep showing growth and have been doing every trick in the book to keep that. Imagine paying $675M for the rights to IP and a customer list. 8x SPIFFs. Free phones. Free months of service. And lower pricing by at least $3 per seat from 2018. Any large deal you see is certainly at sub-$10 per seat.

Even CCaaS seat pricing is compressing as CCaaS gets mixed in with UCaaS or CPaaS.

5G FWA (fixed wireless access) is sub-$100. Cell phone plans are unlimited for less than $50. Where is all that CAPEX investment return coming from?

On the commission front, partners have to sell more and more to maintain the same income. They have to sell more into each account, which makes them stickier and the partner more valuable. They have to sell more than voice and internet. That’s a tough pill to swallow. As partners reach the retirement horizon, some are looking at what has to be done to grow the business and look for an exit – either as a merger, “investment” from TSB/master, PE $ or ride it out until the income is gone.

Since Jay & Co think marketplaces are where the procurement will come from, where will partners be in that sale?

The PE powered brokers all say that they are improving the buyer experience. How? They aren’t building a new mousetrap. Most telecom cannot be procured through a market. It is paper and swivel chair driven. That leaves SaaS. And I agree that SaaS can be procured through a webpage. So can streaming services. But too many other services cannot.

One of the brokers talked about transparency and pushing back against the vendors. As soon as you try to put pricing into a public platform, vendors will push back. I once posted AT&T Internet pricing on my blog — AT&T legal called me 2 hours later with a takedown notice. UCaaS may be happy to post pricing online, but CCaaS has required an NDA to get “best pricing”. Data centers don’t even like to tell you who is in the meet me room, let alone post rack pricing or x-connect rates.

A lot has to change, but in the meantime, prices will decrease along with commissions which won’t bode well for PE backed brokers and vendor stocks.