Peter Radizeski is Founder and President of RAD-INFO INC. He is an accomplished blogalyst, speaker, author and consultant. He has helped many service providers with sales training, marketing, channel development and business strategy. He is a trusted source of knowledge about the telecom sector. His honest and direct approach make him a refreshing speaker.

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Do Buyers Want a Telecom Marketplace?

There are a few companies throwing out the idea of a telecom marketplace. They want to sell buyers on UCaaS, Internet, SD-WAN, colocation and more. They got this idea from Amazon.

Unfortunately, Amazon tried this already. And failed. Amazon failed at selling Chime, Comcast Internet and a few other telecom lines. Amazon has done a great job selling smart home solutions from Ring and Blink along with subscriptions. This makes Amazon even more valuable with MRR.

Buyers may procure CRM, file share (Dropbox), and other single use SaaS via e-commerce. Salesforce has certainly demonstrated that you can craft a ecosystem around CRM and add-on sales to make the CRM the centerpiece of a business user’s day. This also is not what these “telecom marketplaces” are doing.

They don’t have a brand. They need a brand to drive buyers – and build trust. They are hoping that partners will send their customers to the site for sales. I only see that happening when the customer is a PITA.

The other hurdle is that most buyers do not know what they need, what is available, what comes with it.

Recently, a buyer had DSL. The DSL came with a wireless access point on loan from the ILEC. When the buyer upgraded to DIA due to reliability issues with the DSL, the WAP went away and no wi-fi! They needed cabling run for VoIP phones. They needed cabling from the telecom closet to the suite. And more. Who handles that through a marketplace?

The master agencies are supposed to help with some back office. As they get bigger, they don’t get better. NO MERGER IN TELECOM in my 21 years has ever made things better.

Most of telecom orgs as they get bigger, get messier – for example, SBC-PacBell-AT&T-BellSouth, Windstream and CenturyLink/Lumen/Level3/TWTC/Quest. Each one is a circus tent with many fiefdoms underneath that prevent stuff from getting done. I see this with AppSmart.

Most partners aren’t running a practice management system or a standard CRM. So how do you get all that customer, order and commission data from one org to another? Maybe the first thing would be to get everyone on one system, but at $3000+ per month, I don’t see too many partners jumping on that partner management software soon.

While the money men try to roll up the partners, I am reminded of JAB Wireless, a WISP roll up that didn’t work too well either circa 2015. Lot of reasons for that – like no common software for CRM or billing.

When Datto or Kaseya report on the state of the MSP, 80% of the MSPs are less than 10 employees and less than $1 million in sales. I would imagine that the profile of the average telecom partner is similar. These businesses are difficult to roll up.

I think when these efforts get exhausted or fail, it will have had a horrible ripple effect on the channel. Some regional master agencies will suffer. Some of the acquired partners will suffer. Some customer will suffer. The reputation of the channel – that we have spent 20 years improving – will be hurt. Because while people say it is about the customer, in the race to the Buyer, these orgs are going to run over partners and customers!

One last point, after the sale, there is a ton of post-ink work to be done, project management, information to collect, paperwork to be signed, orders to be placed, customer site preparation, and on and on. How will all that be handled? What about the pre-ink information gathering?

If e-commerce for UCaaS really worked, one of the 2000 providers in that space would have nailed it by now.

If e-commerce for mobility was so easy AT&T wouldn’t have 5300 branded stores. You see what I am saying?

Ordering is the easy part – choosing, delivering, gathering, deploying are all the messy parts that partners handle – just to get the commission.

EXaaS fwt

Employee Experience as a Service for the Win!

According to 8×8 and a few cloud contact center vendors, the next phase for organizations to manage will be CX or Customer Experience. Some companies are adding CXaaS to their marketing; a few are trying to pivot to “experience as a service”. Vonage tried that with VBC. 8×8 is trying this with XCaaS, a mashup of UCaaS + CCaaS (+CPaaS) to get Experience as a service.

Most of call center functionality is built around making the employee (call center agent or customer service rep) as efficient as possible. In other words, handling as many calls as possible. It makes for an awful employee experience, IMO. Yet this is what WFM is for: “Workforce management (WFM) is an integrated set of processes that a company uses to optimize the productivity of its employees.” [source]

CXaaS is really the mashup of the unified communications platform (voice, video, messaging, presence) and the cloud contact center functions. Instead of buying two packages, this would be about providing the needed functionality to the customer org from the vendor’s platform. Single Call Resolution requires the whole org be on a single communications platform. This means that the UC has to be integrated with CCC – and every employee gets the functionality that they need. This is easier on a meshed platform from a single vendor. It allows for better performance, easier management, one throat to choke and single source to secure.

Not all contact center software sales are to a call center. Departments can have a need for some call center features. When I wrote my book on selling cloud services I explained that selling functions to each employee would add value to the sale. Maybe the three people in account payable could benefit from their own auto attendant or call queue or reporting. Not just the tech support reps need the call center licenses, right?

Small business would like omni-channel messaging for Facebook, SMS and chat mixed with a little bit of AI to handle the FAQs. Maybe an IVR overlay. These are all CCaaS features but can be sold to small business for business process improvement. It can be sold to departments for the same thing. We need more use cases per vertical – how did CCaaS help a jewelry store increase sales? How did omni-channel help a dry cleaner get more repeat business? Specific use cases in order to make these features concrete.

This means that the channel partner has to ask about departments and employee duties just like you have to ask if they need a lobby phone or a receptionist’s office. The partner will need to map functions to technology and tie it back to improvement in business processes of the org. This means we are looking for Employee Experience (EX). We want to leverage the CCaaS technology to improve how many employees – not just the call center agents – perform their jobs.

It is about how customers and employees interact with each other and with the brand. Tom Peters says How you treat your employees matters. Happy Employees make Happy Customers.

The functionality of cloud contact center can be used to monitor employees working from home. It can also be used by managers to check on employee engagement (sentiment). The investment in AI, ML, transcription and more can turn the org into Big Brother, but smart(er) management would just leverage the technology to keep employees engaged and collaborative. The reporting is a way for managers to coach employees up. (This requires perhaps better managers than we have today since no quits the job – they quit the manager.)

In hybrid or work from anywhere scenarios, engaging employees will promote culture and innovation. There are studies that prove it. Employees worry that out of sight is out of mind — promotions, raises, etc. will not happen in a remote work scenario. Can technology solve that?

How can new employees meet and share with other employees in other departments? The most effective channel managers have a rolodex of employees to get stuff done for partners – from billing errors, to expedites, to compensation. How would a new remote employee interface with other employees in the org? Can tech help with this? I have seen a contact center feature that looks like Rapportive in Gmail. Rapportive (before is was acquired by LinkedIn and canned) allowed a user in Gmail to see social media profiles of contacts inside the mail program. What platform today adds this ability to Presence or LDAP or Contacts or as a pop-up? Imagine knowing more about people calling you or messaging you?

There will be software that is targeted primarily at call centers. But many orgs will leverage AI and WFM from the cloud contact center for employee experience outside the call center. Done right instead of Big Brother, we have effective coaching from managers and a better employee experience, which leads to a better customer experience.

Selling AAS

on selling anything-as-a-service…

From an analyst on 8×8: “The pandemic has accelerated the move to replace premise based enterprise communication systems and contact centers solutions with cloud applications. … [our] integrated offering from 8×8 has been branded Experience Communication as a Service (XCaaS)… XCaaS represented 30% of total annual recurring revenue (ARR) for 8×8 in the last period, with the majority of sales from UCaaS + CCaaS bundles. XCaaS is growing at 2x the market rate. XCaaS represented 80% of 8×8’s top deals for FY’21, which ended March 31, 2021, and was nine of the top ten deals in Q4.”

They want to label everything — and do so horribly. The industry constantly pushes product as a solution; not pushing solutions or pain resolution. It is feature over function or outcome. It is why it took a pandemic to get people to migrate to cloud. Because the sales process was awful! The marketing missed the mark! The bundles, packages, licensing were about the vendor — not about the customer.

In a time of CPaaS, UCaaS, CCaaS and VCaaS, and now XCaaS, it needs to stop. Offer a solution to the customer that has a real outcome for them. They were buying Zoom to do Facetime. They bought MS Teams for presence, collaboration and messaging. They weren’t buying VCaaS or UC&C or any other acronym that the lame ass marketing departments came up with. Businesses were on fire and needed solutions. It was about solving pain. It was about Outcome.

Years of pushing products and whatever-as-a-service was all nonsense. It didn’t work.

People don’t by Workday or Salesforce because it is SaaS. They buy it for what it provides. Our industry keeps forgetting that we aren’t selling Tech. We are leverage the tech to deliver business needs.

People really don’t care if the internet is coming on 4G, 5G, fiber, copper, satellite — all they care about is being able to stream Netflix without buffering. They don’t care if it is VoIP or POTs, they just want the phone to work. Get it?

Routing to Microsoft

It seems every provider in the game has announced some version of Microsoft Teams Routing (or dial-tone for Teams). Currently, that is pricing at about $7 per user. The providers doing this are seeking short term revenues on a short runway.

UCaaS pre-pandemic was often sold as dial-tone replacement. In that scenario there wasn’t much value in it and the price compressed. Also, the provider sales teams started to get tunnel vision on dial-tone, neglecting all of the collaboration functionality that won Microsoft and Zoom so many users during the pandemic.

Here we are again with UCaaS providers really just selling dial-tone. Might as well go back to saying VoIP or start using the CPaaS hashtag. There isn’t much value in being the dial-tone. Sure, you offer SMS and chat too, but that isn’t a differentiator.

This reminds me of integration being click-to-call. That isn’t really integrated. That’s a button or widget.

UCaaS providers are now looking at full stack – CPaaS, video conf-aaS, UCaaS and Contact Center – to sell as the Customer Experience suite – see Vonage and 8×8.

If Microsoft really wanted the revenue, they could offer dial-tone and SMS to every user via Azure CPaaS. Bandwidth.com would love that since they are the underlying vendor for that. (Buy $BAND as a hedge I guess.)

When Microsoft puts Metaswitch in the Azure Cloud for Operators, every ILEC will be able to use it. They weren’t going to do SDN and NFV by themselves. They needed a cloud partner to do it. Now all these ILECs will have Azure Cloud, Metaswitch, vSBC, CPaaS and Teams as the user interface for it. Almost every ILEC in North America has a Metaswitch. Now they will be pushing MS Teams and their own dial-tone to that – all running on the Azure cloud. Look for this in 2022.

Where does that leave UC players?

I have written before about Cisco abandoning BroadWorks in favor of Webex, Spark, CJP. They never fixed UC-One to compete with MS. They think Webex will but Webex can’t even compete with Zoom! Webex, PGi and GoTo lost significant ground in the conferencing/meeting space that they were front runners of. They got lazy. They never looked at User Design or User Experience (UX). Still don’t.

This leaves Microsoft as the de facto interface. I don’t see Webex catching up. Comcast and Verizon made a choice to shift away from Cisco. Comcast bought Blueface and Verizon bought Bluejeans while turning to RingCentral and Aircall. Cisco wants the Enterprise. Verizon will still sell Cisco to the Enterprise, yet most of the business isn’t in the Enterprise. In the sub-175 employee space is where all the money is. That’s where UC providers can win.

Providers would need to either innovate a way to overlay on MS Teams – or they need to start selling as a Teams replacement. (They may need a migration tool to do that!)

There are providers who have the features – Intermedia, NEC, PanTerra, Nextiva – to offer a MS Teams replacement with a better package. Intermedia is a Microsoft partner and has Exchange services available to replace the whole package. A few offer a Dropbox-like product to replace Sharepoint/Off365. This would require real sales and marketing. Selling on Value and TCO, instead of the easy order for dial-tone. It would require an executive level decision to forsake short term revenue for owning the customer and providing a full suite.

Every single provider has the equivalent of Bronze, Gold and Silver bundles. Now though there are usually 5 or 6 (or X9 in 8×8’s case). That’s too many choices. And too many choices makes it difficult for the customer to decide. There should be 2 seats – UC and CX. The full unified seat and the customer experience seat that includes UC+CCC. No flavors. This makes sales easier. This simplifies the story.

Right now, most people offering UCaaS have no idea WHY a customer should buy from them instead of… That’s sad, but true. It reminds me of the days of Integrated T1’s. No differences, just price. I know this industry grew up on LD, but why can’t we get away from the price mentality for sales?

When Microsoft finishes its Metaswitch in Azure, Operator, CPaaS, virtual SBC and Teams interface, and the UC players are losing their $7 seats, it will be too late to innovate. It will be too late to pivot. The time is now when you have a 18 month runway.

The time is now because the pandemic forced businesses to move to UCaaS. Take advantage.

BTW, I don’t think providers can sell straight up against the UC market. Zoom and Microsoft have most of the air in the room. Th etop UC providers are platforms moving to ecosystems (think marketplaces like Salesforce has due to SF’s open API and years of courting ISVs to develop around that). That is what RingCentral is thinking. Zoom said 2 weeks ago that it was going to become a platform and launched SDKs.

You have to want to own the customer – and provide them with all the functionality. In the contact center space, that is exactly what the giants do. They partner or buy functionality in order to fulfill customer wishes. They don’t power Microsoft or Zendesk or ServiceNow. It is all their brand out front.

Need help with executing this or thinking about it? Call Peter @ RAD-INFO Inc at (813) 963-5884

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The Channel Will Look Different

In just a couple of years the channel will look very different. This week the partner M&A activity ramped up with 2 agencies cashing out. NXTSYS and M2 did deals with AppSmart and Upstack, respectively. This will continue since many partner businesses have been at it for 15 years or longer. Quite a few have been at it for 25 to 30 years.

The channel isn’t the same as it was. The vendors are different – consolidated (Lumen), bankrupt (Wind, FTR, Fusion), can’t make up their mind what they are (AT&T and VZ). The buyers are changing. The way people buy and what they buy are changing. That’s a lot of shifting underneath some shoes that have been doing this a long time.

AppSmart, Upstack and others offer a way to ease into retirement (sort of). JD Wentworth style if you will.

It was easier to start an agency pre-2005. They commissions were better because the prices were higher. Network and voice pricing has dropped every year since. All the replacement products like SD-WAN, actually turn your good MPLS check into a smaller check, but perhaps the customer is happier. Perhaps. Jury is still out on if a 4G and broadband pipe can replace DIA.

Even UCaaS pricing is collapsing. Zoom phone has had a hand in that.

The next wave of partners will not be full time salespeople. They will be much more like referral partners who want to get paid to refer services that are ancillary to what they are doing on a project. MSPs that have not gotten into UC yet, probably won’t. TEM and CPA firms will help lower bills and help choose the next network vendor, but vendors won’t get much a say in that — and they won’t be able to do the end of month check in. Got anything for me?

The next wave of partners can’t really make a living off selling $1000 deals. It takes too many deals – and it requires just too much work to get the deal installed and billing. A couple of mine recently have taken over 500 emails! So if they can’t make a living selling cable and 5G (*cough*) and UCaaS is fast approaching sub-$15 per seat, what will they do? Other things. Consulting, project management, software dev, API integration, and so on. That will be the “real” job. The selling services as a partner will be a side hustle — like it has been for all those AEs and channel managers all these years!!! (you know who I am talking to!)

As master agencies and VADs merge – Tech Data/Synnex, AppSmart+Co – do you think the service gets better for the partner? There has NEVER been a merger in telecom that worked out as expected. Never. There are hardly any real synergies except for the redundant people you fire. The combined entity has to figure out how to merge unmergeable systems. Everything under these circus tents sounds like Cirque du Soleil but is really keystone cops. That’s no fun for employees, partners or customers. And it is coming to a head at a few places.

Lots of reasons to exit the channel. There is a ton of opportunity but to really take advantage of it, a partner would have to add some skills. For example, CyberSec certifications, Microsoft courses, maybe learning to code, and sales training.

Who will pay for that?

And rent/housing, gas, food, insurance prices are all rising. W2’s look better and better. It will be interesting to see what the channel looks like in a couple of years. It won’t look like it did pre-pandemic.

PS This may not be a factor at all because one master agency claims to have 9000 partners.