Yesterday I presented at CVX Expo on the tech trends in 2019 and where the financial opportunities lie for channel partners. What did partners want to talk about after? SD-WAN and CPaaS.

Not AI (Kandy, IBM Watson). Not IoT and the new bundled packages that partners can sell. Not Smart Buildings, CyberSecurity or anything.

That’s what the street is talking about: POTS replacement and MPLS replacement. Oh goody.

I am not a Tim Ferriss fan but he does a good interview (and he gets very good guests).

I am a huge fan of Seth Godin.

This interview is almost 2 hours but worth every minute of it. Listen in chunks if you want but it is about being too busy; marketing; How to say “no” to the unimportant and set boundaries; How to find your “smallest viable audience”; and other worthwhile stuff. “Price is a story.” — Seth Godin

Here it is for download (and here it is on YouTube).

From Channele2e: “Venture capital deal making had its fifth consecutive record year in 2018, with 14,889 transactions worth an aggregate $274 billion, easily surpassing the previous high of $192 billion set in 2017, according to data firm Preqin, Chief Investment Officer reports. All that VC money has put pressure on private equity firms to seek out alternative investments, ChannelE2E believes. And in some cases, that has led PE firms into the MSP market. That’s good news for MSPs, but we’re watching closely to see how all the M&A activity plays out…”

This is my guess how the new money in MSPs work out:  it won’t.

Jay McBain made a prediction that the gig economy will affect tech services. This happened before (2006-2009) when everyone and their brother was in the IT space. The rates for RMM dropped out of the sky. Then it all fell apart.

Tech services require specific skills, especially in cyber-security. None of this scales well. Ask Fireeye.

You can scale monitoring, but not what happens when an alert hits. Not fixing things.

If things are going so well in the MSP space, why was there a shake up at Office Depot already?

I watched private money come into the ISP space. Nothing major changed. A bunch of ISPs cashed out. A few got bigger, but mostly nothing major changed. Not everything scales, creating efficiencies, which is where the arbitrage in roll-ups comes from. So without efficiencies, there is low return on investment.

You can scale mass market mediocre services, but only if you are an incumbent or a near monopoly does that allow you to ignore 30% of your customers. By having poor customer service and “creating efficiencies” in other departments, can you peel away some free cash flow (FCF).

The only thing that scaled well was dial-up. Ask EarthLink/Windstream.

If it scales up, it is commodity. Hence, the provider needs to keep making it efficient. How does that work with managed services? or IT?

Sure. We could Uber-ize the Geek Squad – and everyone can take a test to identify what skills they are qualified for (or utilize the CompTIA certifications), but it will only scale for low hanging fruit.

Already consumers balk at spending $75-$150 for a house call to fix a PC or a wi-fi problem or to set up home automation. You think Uber-Geek-Squad will Lyft that by accepting less?

“Private equity chief financial officers (CFOs) reported another year of unprecedented growth of their firms but are still struggling to overcome operational issues that are dramatically eroding their margins, according to the EY 2019 Global Private Equity Survey.” [source]  Sustainable growth is hard. Scale is hard. Operational efficiencies are difficult. All three are needed for the private equity to get a return on MSPs.

So this is the 20th year of ITEXPO!

Every show I try to plan a dinner gathering. This expo it is on Tuesday night (Jan. 29th), please RSVP.

If you can’t come Tuesday, email me about dinner on Wed. night at 8.

I will be moderating 2 panels at ITEXPO:

Wednesday, January 30, 2019 at 10:00-10:55am in Room 209

DIY: Building a Next-Gen Carrier 

Friday, February 1, 2019 at 11:00-11:55am  (also in Room 209)

10 Things That Every Business Should Know About Unified Communications, but May Not  

I will be speaking on the CVX Stage on the show floor at 5:15 pm on Wed. about the Trends & Channel Opportunities.

I will be attending a session by Microcorp, Netvortex and CenturyLink on Voice on Wed. at 2:30.  RSVP HERE.

Hope to see you there! Let’s meet for coffee.

With so many UC/Hosted VoIP Providers operating in North America, who is ready for 2019?

The Big 3 pure play UCaaS providers – 8×8, Vonage and RingCentral – all ended 2018 with acquisitions. They will spend the first half of 2019 trying to put all the pieces together.

These 3 aren’t even UCaaS providers any more. Along with Nextiva, they have switched to being software platform providers – with too many extra functions being added – including CRM!

We will see how this works in the long run, but of the 4, only Vonage has a CPaaS platform ready to power the SMB space. Even Intelepeer has jumped into this space. Will Vonage knock off twilio as the CPaaS king? Or will 100 providers divvy up the CPaaS space like they do UCaaS?

Jive has gone into hibernation since LogMeIn bought them. We will see if they wake back up by 2Q19.

Verizon re-organized twice in the last year . I haven’t heard a peep out of the OneTalk product in a long while.

Mitel is trying. Avaya is hoping. West is still in sales flux.

Momentum says they are ready to grab deals.

Star2Star has been relatively quiet since the merger last year.

Fuze must have fired their PR firm.

Masergy says because of their network and SLAs they are ready to go. Even on OTT?!

OnSIP is ready for 2019 and has some good things coming out soon. See HERE.

Broadvoice is coming out of 2018 with a new product offering that partners are taking a liking to.

Regional players will still win business at a better average seat price than the majors.

There are so many players: TPX, Panterra, Fusion (Birch+Megapath), AireSpring a bunch more that will be showcasing at ITEXPO in 2 weeks. The cable guys — although rumor in 4Q was that Spectrum was dumping their BSFT! No confirmation.

With so much change (think Cisco/Broadsoft, Polycom/Plantronics/4Sale, Digium/Sangoma) providers had to re-think their product offerings. It is a good time (Q1) to remind partners of your best product offering.

Also, reiterate internally and externally in a clear and concise manner the Value Proposition!

Training will be big. On features, on Verticals, on Business Impact and on how to sell. Who will take this bull by the horns?

Will SPIFFs be back as the driving force in 2019? Maybe. I think that can be a factor in winning some business with a partner. I think having a PMO department and explaining what the post-ink process will look like is where the tire meets the road.

ASIDE:

And please understand HIPAA Compliance if you say you are compliant. It is HIPAA, not HIPPA. Also, network – the pipe 0 is irrelevant. HIPAA is about the PHI – the DATA. You know the data that we leave unencrypted lying around!