Doing some planning for 2025 and thinking about what is likely to happen next year.

Let’s talk Cloud Comms first. There is a disconnect between “Enterprise” and 99% of the market. 99% of businesses are small businesses in the US. There are only 30K businesses that are Enterprise. What Enterprise wants – and has the manpower to manifest – is vastly different from what the majority of businesses want, need and can deliver on.

80% of dollar revenue growth will be in small business, which means many providers will need to re-tool their messaging for that space. UC+CC plus omni-channel plus CX plus engagement and integration are just terms that the providers use – that buyers aren’t shopping for in the SMB space, even if we re-define that space as 300 employees and lower.

There is constant talk about AI and an Agent for everyone. There has to be cloud stored data from the business for that widget to work! Many businesses do not even have a CRM! There POS is Paypal! Do you see the disconnect?

Small businesses need to move to Stripe or a platform for the business that handles billing, CRM and other simple functions. Then the phone system can integrate with that to provide REAL outcomes. Partners will do well to start helping small business with a move to the cloud in all things: the digital transformation we have been talking about.

The payoff for small business will be one pane of glass and EX! The employee having a better experience will help small business with its retention problem.

 

Telcos of all stripes have a SWITCH problem. Alianza buying Metaswitch didn’t mean that Metaswitch isn’t going away. It meant that Alianza would find a way to make the migration from Metaswitch to Alianza’s PaaS easier. Metaswitch is still going away.

The 700 or so telcos that use Metaswicth for copper are in trouble and no cloud platform will solve that!

With the cost of Broadworks ever increasing, margin erosion will be discussed often in 2025. The cost to run softswitches will continue to increase and margins will shrink.

Softswitch replacement will be a trend in 2026, but telcos will need to consider what softswitch or PaaS that they will be migrating to since the migration takes months if not years!

BIG MERGERS! Verizon buying Frontier. Windstream getting back together with Uniti. We will see a lot of ISP M&A as broadband works better in scale. There is $60+B in government money that will go to fiber in the ground followed by at least $20B in private equity. M&A will occur just because.

I think Starlink will try to get some of the BEAD money that the NTIA cut them out of. Amazon’s satellites will compete for those dollars as well. WISPs may be able to leverage this for some more wins.

SIDE NOTE: will all the low orbit satellites and drones no wonder everyone is seeing objects in the sky!

Now that Ingram is public again, I don’t think a VAD will go private in the next couple of years. Platinum Equity didn’t make a big enough buck buying and IPO-ing Ingram. I do think TD and Ingram could make a push with their own TSBs in 2025 as there is a growing concern about the PE-backed TSBs.

At least one PE backed agency was shopped in 2024. One PE-backed TSB was also shopped. Then its debt got pushed back from 2025 to 2026 at 13.2% interest. How long do you think these PE backed brokerages can retain talent AND pay back interest?

Rumor is that PE will take a bigger role at TSBs and try to roll back benefits like Evergreen that partners count on. When you only have commissions and MDF, partners are going to get screwed.

Other ways that TSBs could make money: events; education (if they charge for it); and charging for their software.

There are enough regional brokerages (even though they are also PE backed) that any push by the big guys can result in a bonus for regionals. This will put vendors in a bind, because a large chunk of their revenues come in via the TSBs, so what happens when that machine breaks! I just don’t see how the PE companies exit the TSBs without a haircut. There is something like $650M in PE investment in TSBs!

Channel Partner M&A was strong in 2024. MSP were bought at a rate of about 3 per week. Bridgepointe and Bluewave acquired quite a few agencies this year. I can see MSP M&A continuing because there were over 60K of them, but there aren’t many trusted advisor agencies left to acquire.

CHANNEL MANAGERS! This will be a tough year for CMs. Recruiting new partners was hard in 2024 because working through the TSBs is challenging and takes creativity, time and effort. No one likes that. So current partners will be the way to go. Keeping them selling for you will be the primary concern. Helping them with Lead Gen could go a long way towards sales and partner retention.

Conversations will be vital in 2025. How do partners want to connect? What do they want to hear about? Ask them!

Outcome stories will get the most mileage!

I think that events will have a good year but this will be peak. After 2025, attendance at shows will decline for a variety of reasons: competition/too many shows; ROI on the shows ($350 per night hotels make a show unappealing!); retiring partners mixed with M&A; and the take-aways. There needs to be a big take-away that can be converted into sales for shows to be labeled successful.

Vendors want more and more traffic, which just isn’t possible with the number of shows. [Vendors don’t help themselves either at shows because the booths and messaging sucks!] It would help if vendors had a concrete goal for a show and things like a Target Customer and a Partner Profile, but they don’t and that gets in the way of recruiting.

That’s my thoughts as 2024 comes to a close.

Look for a new ebook from me on channel management in 2025!

 

 

 

In 2020, when Microsoft acquired Metaswitch for more than $270M in stock and cash, I wrote (and wrote) that it was a mobility and cloud play. Now that Microsoft has 400M desktops on Office365 and approaching 100M phone licenses, they are divesting from Metaswitch after they pissed off the customer base. By ending Max UC without much fanfare or with a replacement (can’t use Teams as a residential or SOHO softphone!), Metaswitch operators were worried about what they were going to do.

Alianza had acquired Counterpath, which owned a popular softphone client named Bria. It gave Alianza a reason to talk to the Metaswitch operators. Now they have another reason to talk to them: Alianza will own Metaswitch by Q2-2025.

For Alianza it is the hope that they can move a significant number of operators over to their cloud switch.

For Metaswitch operators it is the hope that Metaswitch lasts longer, which it won’t.

The PR sub-headline says it all:  Acquisition creates clear path for communications service providers to enter the cloud-native and AI services economy. That doesn’t mean keep running a Metaswitch!

This is the Cisco playbook on Broadsoft. Eventually the operator will pay a fortune to keep Metaswitch alive in fees. Move to Webex Calling or pay a fortune. Move to Alianza or pay a fortune.

It is short and sweet because it is cut and dry. Alianza wants the Metaswitch operators to put down the switch and migrate to their cloud platform.

ADVICE TO THE OPERATOR:

Decide today. What will your path be?

It takes at least 6 months to decide on a new switch. It takes over a year to migrate customers over. The phone company likely still has TDM or GR303 customers that need to migrate. The HPBX customers will need to move.

All of this takes a PLAN, personnel, time and money.

Decide now what you will do.

Need help? Hire RAD-INFO INC. Call 813-963-5884. We helped over 60 service provider choose softswitches that worked for their business environment over the years. No one understands the ISP/CLEC industry better.

There are a bunch of alternatives to turn to, but you need to do it soon, since time is running out and the process takes at least a year and most likely a lot longer!

Other viewpoints on the Alianza-Metaswitch buy at Fierce; another at Fierce;

 

CVX Expo in Scottsdale at Talking Stick Resort & Casino is in its third year. Registration was up from year 2.

On the SD-WAN panel, while some panelists didn’t pay attention to instructions about telling sales stories, Ryan from Sandler Partners did and tackled the topic well. When panelists treat the session like a chance to do commercials, I’d like to tell you how much it turns everyone off. It does you no good to push your commercial at us, when we are sitting there to hear stories about selling SD-WAN and instead get everything but that.

Best lesson from that session: more than 98% of businesses are SMALL business. Understand how any of the myriad “SDWAN” solutions benefit your target customer.

On the CyberSec panel, big props to Hilary at CORO.net who told a great sales success story about a private school buying cybersec. It was as close to a roadmap for partners to follow to get a cybersec deal sold as you can get in under 10 minutes!

Want to thank Dany from COLOTRAQ for moderating the AI panel for me.  (Currently, I have little desire to be talking about artificial intelligence.)

On the floor, I want to rate booths next year. So many companies do themselves a disservice by having nonsense on their booth and banner. Tell us what you do in 10 words or less! Don’t make me guess, because I don’t care enough to guess. The whole idea is to Garner Interest. Make people want to stop. Not make them guess what you do.

Top Golf, poker, VR games, racing cars — there was plenty to do each night after the expo closed.

I want to thank the attendees that showed up for any of the 4 sessions I was involved in, including the Channel Manager training this morning that was lively and satisfying. I hope you took home a nugget or two to put to work for you!

It was a good show for RAD-INFO Inc as we got a few good leads out of the show!

It was great seeing friends at this show. That is one of the best parts of the show. And enjoying sharing the Kentucky Owl with you! See you next year!

One thing I get asked a lot by channel managers is How to Sell through a TSB (brokerage formerly known as Master Agency). Basically, how do I get the Attention of Partners.

As a partner, I get too many emails from too many vendors – and most of it nonsense meaning it is all about the vendor.  None of it about my business or my customers.

Here’s a few ways to improve your results:

1. Explain concisely who your Customer is and in what way they benefit from your services.
2. Do not send me a list of services!
3. Tell me a Story.
4. Summarize a use case.
5. Tell me what your company does exceedingly well and for whom.

The largest issue that vendors have is that they cannot answer any of these questions.

They do NOT know who their customer is. They say: Everybody which is marketing-speak for We Don’t Know.

If you have happy customers, what are they saying? Why did they buy? Who was the Buyer?

If you have satisfied Partners, why did they sell your services?

I understand that you paid money to the TSB who gave you a list of emails and that spamming that list sounds like a productive day at the office. I can tell you that is the worst idea you ever had.

This is 2024. Time to try something else.

A majority of the partners are busy. Every sale, every renewal is for a less dollar value. We are running faster and faster to maintain our business. So to take time out to have a chat about your business is a waste of our time. If you want to chat about your business, start a podcast. What ever happened to the Elevator Pitch? Quite literally telling me:

Most of the channel managers in our industry are on their 6th or 7th vendor. They do not have 15 years of experience. They have experienced their first two years of channel sales 7.5 times. That means that they aren’t growing, learning. I understand that Quota is a heavy burden, but the rolodex is burned out. It’s time to flip the script because doing the same thing you did pre-pandemic is not going to work anymore.

I have spent many hours explaining channel strategy and marketing to vendors.

The two best concepts are Aligned and Enrolled.

At CVX Expo in Scottsdale on Mov. 14th, I will be holding a session on Channel Management.

Or you can hire me to help your strategy or marketing or to train your Channel Managers.

Or buy the book!

November 2021:  “RingCentral will pay Mitel $650 million to acquire intellectual property rights and patents covering network and call management, security, and infrastructure. Demonstrating its commitment and excitement about the partnership, Mitel’s existing investor group led by affiliates of Searchlight will invest $200 million in equity in RingCentral as part of the transaction.”

Now did RNG get $900M worth of ARR from that deal? No. How many of Mitel’s 35M users went to RNG? No idea.

Now Mitel has a deal like Avaya has with Zoom.

Here’s the funny thing, NEC launched their version of this in 2021. It is called NEC Bridge and works by connecting NEC PBX customers to cloud functions and mobility. It seems funny that everyone is making a big deal out of Avaya and Mitel doing what NEC did 3 years ago. Well, a lot of pundits and analysts had their foundational work with one or both of those companies, so everything Avaya or Mitel do is amaz-balls! Except it isn’t.  If it was would Avaya have gone bankrupt 3x?

The bottom line is that complex on-premise PBX systems are not going to cloud any time soon. AI, mobility and other functions in cloud communications are wanted by companies and a Bridge product provides that.