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.

 

ISPs light up multi-tenant office buildings (MTU) with fiber or wireless usually for a single tenant. The next customer in that same building is gravy. The one after that is even sweeter. Most ISPs do not have a strategic sales plan for their sales reps, especially to tackle lit buildings.

Cogent didn’t  have a plan in its early days to target other customers in an MTU after it installed fiber. Now the sales reps hammer tenants of every building Cogent has fiber in.

I wrote a book on a detailed strategy for selling into Lit Buildings. It was written in 2007. A new magazine format version of the book is available now on LULU. It also comes in an eBook format. Buy either format from Lulu.com, email me the receipt and I will send you the link to the audio book for free.