It has been a week full of UCaaS. I did a workshop on building a UCaaS practice for MSPs. I also sat on a monthly call about UCaaS sales.

The call centered around Avaya, 8×8 and RingCentral. Vonage did not get props, but Evolve IP did. Mid-market and above is the UCaaS target.

All the UC players are targeting mid-market. Bigger ARPU, larger contract value. Enterprise is still on Avaya and moving to either Cisco or Microsoft. Period. If Five9’s or InContact do a deal with MS for CCaaS on top of Skype4B, game over.

I venture to guess that the study was right and that small business (up to 25 seats) still wants POTS. SIP Trunking over a cable modem is an awful experience. CPaaS is a step above SIP trunks and SD-WAN can help out that call quality (in the short run). If not, that is what the cell phone is for, right?

At the MSP event, not many of them want to deal with voice. Too many moving parts. Not enough control. Providers are not stable/stellar. The money isn’t worth it. Let me repeat that: the commission isn’t worth the time and effort. That is Apathy. Not certain the industry can get over that.

There are only 18,500 firms with 500+ employees. That is where all the focus is now. On that 18,500. And the margins to win those deals keeps shrinking. As time goes on, winning these deals will mean lower seat pricing and less margin. No idea how that works out.

I see companies buying Ring and others for cheap voice. Just consulted on a 2800 location deployment. All for flat rate voice, click to call, call logs and voicemail. If there was a way to roll up cable bills into one entity easily, it would have been cable voice instead. To me, this is basically a CPaaS deal – except CPaaS bills on usage.

If all the focus is at 500+ employees. What happens to the 2 million businesses with between 10 and 100 employees. To win that business, the sale has to be frictionless. And the service delivery HAS got to improve.

“A report by IHS Markit found that 75% of the service provider respondents said that enhancing customer experience was their top digital transformation project, followed by automation (44%) and cloudification (38%),” from Fierce.

There is Apathy from the partners to sell UCaaS. There is Apathy from the customers on the features.

There is an education issue – both pre-sale and post-sale. Before the sale, the users can’t tell the difference; can’t easily suss out the benefits or outcomes. Post sale, there isn’t enough user training to increase adoption and thus stickiness and customer satisfaction.

Not saying I have an answer. I think the providers are going to have to take a long look in the mirror and decide if they want to be a tech company, a service business or technology business partner to the customer. Then create a culture around that choice. Own it and point the whole of the company’s efforts in that direction.

Years ago 8×8 was a technology company. A new CEO forced them to pivot to a sales company (service provider). That focus worked for a while. ‘

RingCentral knows it is just a marketing company. They were winning the UX game but I hear that others have caught up or gone past.

Who knows where it will go next but the winner will be the most focused. Not the loudest but the most focused.

Culture can win here. Culture can beat Apathy.

Megapath got pacmanned by Fusion.

https://newswire.telecomramblings.com/2018/05/fusion-announces-closing-birch-acquisition/

Fusion is the result of a reverse IPO for Birch with each entity spinning off parts. Single POTS line customers of Birch were sold separately. Fusion spun off its carrier business. It took on $444M in Birch debt. It now sits with about $680M in debt for FSNN with approx. $500M in revenue.

In a fire sale, Fusion grabbed MegaPath for just $71.5M. This is after MegaPath spent the last few years selling off parts.

“These days MegaPath serves a mix of UCaaS, cloud connectivity/computing, security, and SD-WAN to the SMB marketplace. A few years ago as a larger company, MegaPath sold off its wholesale division to Global Capacity for $160M (now part of GTT) and its managed services business to GTT directly for $144.8M,” as Ramblings reports.

“The purchase of MegaPath will cost Fusion some $71.5M, of which $10.0M may be in the company’s common stock with the rest in cash coming from its current credit facility. For that price they will add $70M in annual revenue and $15M in adjusted EBITDA after cost synergies. Some 8,000 SMB customers will be added to the company’s rolls along with 45 quota-bearing salesfolk,” again from Ramblings.

Now Fusion has 2 Broadsoft switches and a homebrew UC platform.

MegaPath was sliding into the space of a me-too CLEC. Offering UC, SDWAN and security — which is what all the former CLECs are offering. At CP Expo in Vegas, the main theme was the triple service offering of UC, SD-WAN and Security. It got tiresome.

Seth Godin today, “Just about everything we buy comes with a story included. And yet, most creators, sellers and marketers don’t invest enough, don’t take enough care, and don’t persist enough in making sure the story is worth what you paid for it.”

Another interesting piece of news: USTelecom (the mouthpiece for the ILECs) has petitioned the FCC for Forbearance on UNEs.

USTelecom pushes to End Unbundling (UNE access under the Telecom Act of 1996)

USTelecom Says Telecom Unbundling Regulations are Outmoded; Competitors Say They Need Those UNEs.

The UNEs are used to offer POTS, T1, PRI, any flavor of DSL and Ethernet over Copper. (This could be a gut punch to GTT that bought Global Capacity). This will affect so many consumers and businesses.

The small problem is that most CLECs have either pivoted or gone out of business (or been acquired).

The USTelecom petition is HERE.

The comment period was just published by the FCC HERE.

Comments or Oppositions Due: June 7, 2018

Reply Comments Due: June 22, 2018

Might be a good time to comment and join INCOMPAS to lobby for your UNE.

In an email with an service provider client, he said that the SD-WAN news constantly contradicted itself. Of course it does! SD-WAN has quickly become like UC – a garbage can term for a white box CPE and all the functionality we can jam into it (or around it).

There are 3 versions if you will of SD-WAN.

1. CPE like SimpleWAN or Cradlepoint. In these cases, the SD-WAN is basically just CCNA in a box doing circuit bonding and simple failover. This is stuff any CCNA could have done with a Cisco 2600.

2. The other extreme is the SD-WAN network that Aryaka, Masergy and Big Leaf push. In my opinion, you are trading in your MPLS for their version of it.

3. The Velocloud version involves the network itself being SDN. It introduces an orchestration layer between the hardware and the network that allows for management, transparency, reporting, zero touch provisioning and more. It also includes the same functions as the CPE guys.

Explaining that story still needs to be done. And it seems that Velo is following in the footsteps of BSFT by not explaining “the Intel inside” story. BSFT never explained why Broadsoft and not PBX or why Broadsoft and not open source. That boat left the dock for UC. It is ready to leave the dock with SD-WAN.

As I wrote in the last post, the Story is vital. Stop using buzz words and start discussing business outcomes and benefits.