On Rad's Radar Archives - Page 12 of 376

Jumping on the Cloud Bandwagon

More master agencies are claiming the cloud, so to speak. They are signing up cloud providers faster than the ink can dry on the agreement. (Ben Bronston must be busy.)

They are jumping on the bandwagon for a number of reasons.

One is Consolidation. The new landscape of Ethernet is cable and ILEC. The CLECs are mostly all gone. You have to expand the catalog beyond just network operators and VoIP.

The other reason is price pressure. Pricing across all telecom products – mobile, bandwidth, Ethernet, VoIP – has been declining about 3-10% year over year, creating a problem for the operators and partners. When pricing craters, you have to sell more and more and more to maintain the same commission level. At some point, just selling network isn’t going to work because you can’t close enough deals or even fill a funnel fast enough.

When 1GB pricing is less than what 10MB pipes were just six years ago, think about how much you have to sell and how fast.

Even the current price war in VoIP/UC isn’t helping. Because there isn’t enough Demand for UC – the demand is for POTS replacement and dial-tone – the price per seat has dropped. It hovers just below $20 right now.

I understand that the customer wants the cheapest price – and it is easier to take the order when you find the lowest price – but you have also just lowered your commission.

Providers are starting to cut commission points when they lower the price. Partners and Channel Managers aren’t happy. Well, then sell it at rack rate.

So carriers consolidation means fewer vendors and pricing compression means less overall commission. More vendors are needed. Luckily over 600+ vendors have entered the space in the last three years while more than one-quarter of the partner channel have moved on. Retirement, M&A, and business shift/pivot have resulted in a lot less sales partners at a time when there are so many more vendors to choose from.But to be realistic choosing a UC vendor among the 2000+ available is like picking Red Delicious apples at the grocery store. They all look the same. How many do you want to smell and test for firmness before you pick one?

The cloud computing piece, as we found out two weeks ago, is owned by Amazon. AWS and S3 are hosting about one-third of the web!!!! Rackspace, CenturyLink, Azure, Google Compute, IBM/Soft Layer and the others haven’t really stepped up their marketing game (even in the wake of Amazon’s outage.)

Businesses are moving to SAAS, IAAS and other computing environments. Partners are in a position to offer assistance to businesses in this regard. It is uncharted territory for many, but the business model has shifted to wallet share. If you want to survive (and thrive), it is about getting more wallet share from the customer. That means selling them email, Office365, VoIP, colocation, security and more on top of the network and bandwidth that makes up the typical sale.

We have seen a number of press releases in the last 4 months about SD-WAN – mainly about SD-WAN providers signing up with carriers and with master agencies. SD-WAN the new UCaaS!!! This technology could be the next big thing, but they said the same think about IP Centrex (VoIP) over 15 years ago and about WebRTC.

Our biggest problem: We push Product. That’s right. We are a bunch of Product Pushers. We would make ideal drug dealers because we don’t create demand, we just push a product on someone who wants it.

We don’t sell Solutions. We don’t even offer Solutions. The vendors don’t offer solutions either. They pimp products. It makes all of this really hard to sell.

Tags: amazon, cloud communications, cloud computing, cloud services broker, ethernet, master agency, SDN, sellecom, WAN
Related tags: offer solutions, wallet share, master agencies, price, vendors, pricing

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The Fight to Make a Living in Cloud – Jan 17, 2017

Will Amazon Disrupt the Channel? – Nov 30, 2016

Talking Channel and Opportunity with TelAdvocate – Nov 11, 2016

Channel Outlook in a Mega-Merger World – Nov 07, 2016

National Harbor: In the Bubble – Aug 17, 2016

The Distributor Side of Things – Aug 03, 2016

Selling SD-WAN as a Trusted Adviser – Jul 29, 2016

UCaaS Tidbits #2440 – Jul 05, 2016

What Does Hybrid Cloud Look Like? – May 11, 2016

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March 7, 2017 , On Rad's Radar

Telecom Tidbits #2447

CenturyLink sold its data center business (57 sites) to a consortium of PE firms fronted by Medina Capital Advisors for $2.3B end of last year. Details were sketchy for agents who had clients in those data centers. And we are still waiting. At least now we know that the spin-off will do business as Cyxtera. [Colorado Buyer Inc. d/b/a Cyxtera Technologies].

Level3 CEO and President Jeff Storey is poised to get a huge prize for selling the company off. Isn’t that great? For him, yes. He gets a “$1.2 million bonus after the Broomfield-based telecom’s $24 billion acquisition by CenturyLink Inc. closes. In addition to the $1.2 million bonus payout, Storey is slated to receive an accelerated stock grant worth $3 million after the transaction with Monroe, Louisiana-based CenturyLink.” Agents, meanwhile, get to wonder what happens post merger. How messed up will the networks be? How convoluted will ordering and quoting be?

After both Transbeam and NITEL announced that they are adding SD-WAN, MegaPath launches SD-WAN aimed at the SMB. That is the same place that SimpleWAN plays. SimpleWAN is up for the 2017 Venture Madness business competition in Arizona.

Velocloud raised a series D round for $35M. Many startups will look at this (and the SNAP IPO yesterday at $26B) and think that doing a startup is like buying a lottery ticket. In a sense it is, but building a business — even to sell it quick — still requires hard work, execution of an idea AND a plan, and sales. Velocloud is signing up partner providers faster than a PR firm can add them, but that doesn’t result in meaningful sales for a long while!

You can learn from failure. #startup stories.

In the heat of SD-WAN, I wonder if people realize how shaky Cisco (and other router manufacturers like Juniper and ADTRAN) are? The SD-WAN white box is not a Cisco. It is an OEM that can be a router, a firewall, an access point, a Cradlepoint, darn near anything because we just push the software update to the box and either install the card/WIC or activate the card/WIC. The white box is replacing the traditional gear. Cisco and ADTRAN are in the box business. So are VARs. What happens next? Pay close attention – it will be a lot like the PBX Business, but decline a little faster.

Satellite ISPs OneWeb and Intelsat are merging. Consolidation in every sector of the ISP market – MSO, ILEC and now sateliite.

Verizon wins top honors from Frost & Sullivan for capturing more than a quarter of the North American VoIP and SIP Trunking Services Market.

CenturyLink makes changes to its Alliances and Strategic Partnerships programs.

In the EarthLink-Windstream merger, the ELNK channel chief, Olen Scott. emerges as the new channel head. “Jason Dishon, Windstream’s former channel chief, has left the company to pursue other opportunities.” It is a constant state of musical chairs in telecom.

Tags: ADTRAN, centurylink, channel managers, channel partners, cisco, data center, earthlink, SDN, sip trunking, vz
Related tags: million bonus, channel chief, business, centurylink, million, telecom

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Cologix and Equinix Make Moves – Dec 05, 2016

Talking Channel and Opportunity with TelAdvocate – Nov 11, 2016

Channel Outlook in a Mega-Merger World – Nov 07, 2016

As the Telecom World Spins – Nov 04, 2016

3 Reasons Channel Management Needs a Slap – Oct 31, 2014

Telx Says They Love the Channel – Mar 05, 2014

Good News from CenturyLink Channel – Jul 10, 2012

Savvis Changes Comp Plan – Jan 10, 2012

2 Data Center Deals and some links – Jan 03, 2012

The Panel of 5 – Oct 11, 2011

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March 3, 2017 , On Rad's Radar

Sales is Hard

A few sales reminders from sales training I performed yesterday.

It is all about the Daily Activity. Your routines and habits determine your level of success. Tom Peters says, “Show me your calendar. I’ll show you your priorities.”/p>

Sales Math is real. It takes X number of calls and Y number of emails plus Z number of other types of contacts (trade show, LinkedIn, lists) to fill a partner funnel. It takes Creative follow up to turn that into sales activity for channel managers. It takes J number of quotes to get K number of closed deals. Figure out those numbers and either increase traffic or increase conversion.

Sales is Helping. Period.

Most salespeople know what they have to do to be successful. Most won’t put in that much effort. Sure sales is hard, but that’s what you signed up for.

Sales Reluctance is real. Sales involves lots of rejection and losses. It is a huge bummer. Realize all of that is not them rejecting you. That fear of rejection is why people don’t like to cold call.

Reminder from GapingVoid.

Tags: sales, sellecom, selling
Related tags: sales, number, takes

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Customer Segmentation – Jan 24, 2017

What Can You Learn from Pharma Sales? – Dec 29, 2016

Sales KPIs – Nov 23, 2016

Channel Partner Enablement Tools – Oct 10, 2016

Channel Agnostic or Parity? – Sep 30, 2016

4 Points on Selling Broadview OfficeSuite UC – May 26, 2016

Most Businesses Fear Change – May 19, 2016

What Does Hybrid Cloud Look Like? – May 11, 2016

Replaced by a Robot – May 05, 2016

What Channel Are You Watching? – Apr 25, 2016

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March 2, 2017 , On Rad's Radar

4 Problems with the UC Market

On a LinkedIn blog, Telarus co-founder Patrick Oborn writes about the fact that 72% of businesses have not transitioned to cloud communications. 72%!!!

After 15 years, 2000+ providers can only take a 28% handhold in the market?

The growth rate of Hosted PBX (HPBX/UC/UCaaS) has always been a hopeful bad guess. And it will continue to do so because too many people, companies and dollars have been invested thus far for any analyst to turn on the sector.

There are 4 major problems with the UC Market.

One, PBX sales have declined about 3% per year. Even Avaya going bankrupt isn’t going to speed that up. Not only do people trust boxes; they are cheaper in the long run. Single location businesses, which is most of them, don’t have a PBX problem that UC solves. There is a current Product/Market MisMatch that needs to be examined.

Mobile UC may get more traction. Or a simple PBX like Dialpad or Fone.do. Gary Kim writes that the market may be too small. At ARPU of $400, it takes a bunch of sales to move a needle for a company like CenturyLink, Verizon, AT&T, Comcast or Charter.

Two, I wrote this last week. Any 15 year old product needs a re-fresh or re-think. We are overdue for a Re-Think. Slack was a re-think, but that strays to the edges of what UC is. So does Cloud Contact Center. And these companies want to be everything for 1-1000 employees. This isn’t Pasta or Rice. This is technology.

UC is Change. People hate change. The Channel doesn’t sell Change; we take orders on replacement services. Harsh but mainly true. There are exceptions of course, but the general rule is that agents are transactional. Even Inter-Connects aren’t excited to go sell a cloud service. MSPs will if it is white-label and can be bundled into their package, but that falls into POTS Replacement more than a full-blown UC deployment.

Three, HPBX has 2 camps of buyers: POTS replacement sold as cheap as possible and actual UCaaS. Where do you think most of the market is? Right, cheap VoIP.

Now if I am buying cheap VoIP, am I also going to pay for a backup circuit or SD-WAN or any other service enhancement or assurance? Unlikely — or I wouldn’t be buying cheap cable broadband and the cheapest OTT voice!!!

If the buyer spends more on bandwidth, has a backup circuit, they are likely going to buy UC as BC/DR and that isn’t cheap VoIP.

The fourth Big Problem: There are far too many providers! Telarus represents at least 37 HPBX vendors. Other masters have at least 25. How does anyone differentiate/ stand out/ position in a marketplace where the cloud broker has a choice of 2000+ providers?

This becomes a problem for the providers who enter into a Price War (seats cratering to below $15 each) and a SPIFF War, where providers are literally buying sales.

One of the most successful HPBX providers, 8×8, is up for sale. This move comes after a recent re-branding as a Global UCaaS provider.

Are the owners (the 8×8 founders still own most of the voting stock) looking to exit? Or is it that the machine to keep bringing in 20% growth quarter after quarter is grinding down? I just don’t know who would pay $1.5 Billion for 8×8. VZ payed $1.8 for XO which owned fiber assets. WIND payed $1.1B in an all stock deal for EarthLink, who also had a bunch of fiber. Fiber gets a bigger multiple than VoIP.

The other thought is that what if $300M is about all the B2B annual revenue you can get?

From a recent discussion about Amazon Chime: there are approximately 100 million phone/conferencing lines in North America. If Amazon Chime with Vonage can hit a 5% share of this market, that equates to 5 million subs. At $5/seat/month, that is $300M incremental revenue opportunity for Vonage. That would be a needle mover for most UC Provider, considering 8×8 is at $225M in annual revenue now.

The emphasis has always been on multi-location and mid-market. That’s why “41% of larger enterprises are using cloud UC services.” Now everyone is focused there (upmarket). However, the bulk of the businesses are single location small business (20 million of them). That means a new product bundle is needed to attract this crowd. Many thing that this sector will be mobile only with an auto-attendant in the cloud.

When you look at the large number of messaging apps, at some point, one of them – Slack, Messenger, WeChat, HipChat – will hit the right bundle of functions to steal mass appeal. Not yet, but maybe soon.

Tags: 8×8, agents, amazon, bundle, change, channel partners, earthlink, hosted pbx, UC, voip, windstream
Related tags: backup circuit, annual revenue, amazon chime, single location, buying cheap, market

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The Telecom Long Tails – Jun 07, 2016

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Yes, Fonality, I am Skeptical (of the VoIP Sector) – Feb 24, 2017

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By the Numbers – Feb 10, 2016

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February 27, 2017 , On Rad's Radar

Yes, Fonality, I am Skeptical (of the VoIP Sector)

Apparently, one slightly snarky tweet and a single line item in Tidbits – “A head scratcher: Fonality got bought by Netfortis. Asterisk and Genband.” – was annoying to the provider being acquired.

I spoke to five people in the VoIP space familiar with Fonality and none of them had much insight on why this move happened. Well, one answer: scale. Inorganic growth.

At one time, Fonality had a big dealer network with training on the expo hall floors. The HUD (heads up display) was a product spotlight. Voicemail in the cloud was ahead of its time. (I guess you were ahead of Star2Star with the hybrid/premise model.) Then POOF! Fonality wasn’t at expos anymore and the noise/attention died down.

Last year Fonality made an exclusive master agent agreement with the Alliance. Hard for that to pay dividends with an industry ARPU of $400 in less than a year. Next thing I know, I get the embargo notice about the merger with Telekenex aka Netfortris.

I’m not a fan of embargo news because it always slips out (like this did). The merger news made Facebook just after I agreed to the embargo. After it hits the social networks, it isn’t worth writing much about – unless it is big. I told the PR firm it was only going to be a line item and a tweet. And apparently that was upsetting to Fonality. So they replied via the PR firm.

Marty Williams, head of product marketing for Fonality, wrote via a PR firm: “While Fonality does provide premise PBX solutions for customers who want it, the bulk of our business is cloud telephony and UCaaS. Fonality’s top-rated UCaaS platform and its telephony management network are internally developed. Owning this intellectual property and the opportunity to expand IP development for the future is critical to leading the evolution of state-of-the-art, secure cloud communication and network services that increases productivity for our valued customers.”

Fonality was founded in 2004 and grabbed “$50.4M in 6 Rounds from 6 Investors“. It looks like they were at $45M in revenue in 2015. Fonality has over 200 employees. The deal was probably worth right around $100M because hardware revenue is worth less than recurring service revenue. It also begs the question how did Netfortris finance it?

Yeah, I am a skeptic. If this IP was award winning and awesome, why didn’t you knock it out of the park? You were ahead of the pack a couple of times. Did you get tired? Discouraged? It sounds like money men wanted to cash out. (Nothing wrong with that.)

Again, yeah, I am a skeptic. The VoIP industry is more than 15 years old and is still just a dial-tone replacement. Billions in investment in this industry and it takes non-VoIP companies to do interesting things with it (thanks to the technology of WebRTC).

Even Microsoft has done more in the UC space in a short time with Skype4B than most providers have done with their product bundle in ten years.

There are over two thousand me-too companies offering up pretty much the same Hosted PBX service. RingCentral wrote, “The promise of UCC needs to go beyond multi-modal communications in one place. Rather, it should be about what the cloud can do to transform the way people work. I’ve said before , that it’s about unified experiences, not just unified communications. Our vision of this is coming to fruition by combining best-in-class UCaaS, team messaging and collaboration, video and web conferencing, cloud contact center–all served on an open platform, at global scale.”

There is a distinct difference between selling basic voice service and selling UC. When selling UC, you are selling CHANGE. And selling Change is F***ing HARD. People hate Change.

But for a business to improve in productivity and efficiency, they have to do things differently; they have to Change some habits. They need to leverage the technology that our industry has made available to any business anywhere and any time. That is the Magic the cloud is offering. It isn’t about the cheapest seat price to get the deal. That’s dial-tone.

Look at that chart above. No one is crushing it. How many Cisco partners are there*? How many Microsoft partners? (They are doing better than shown here.) Metaswitch has over 700 customers. Broadsoft has over 400. Why hasn’t the pie been eaten yet?

Despite the Avaya bankruptcy, premise PBX sales have only dropped roughly 3% per year. That isn’t a whole lot of rip and replace with cloud comms!! It’s kind of embarrassing.

In the Tidbits article, I mentioned that the most interesting move I saw was Atlassian buying task management provider, Trello. Now you have Project Management with collab and chat via Hipchat (like Slack). Voice and video calling can be done via WebRTC. Even screen sharing. All that is needed is a Dropbox. That kind of bundle is more interesting to me. Consolidating 2 of the 2000+ just isn’t interesting to me. I understand that scale is important; and consolidation in this space is needed, but that doesn’t make it interesting – to me.

SIDE NOTE:

In 2014 there were 70 Silver and 20 Gold and 2000 partners at the Cisco event that year. No clear total number. Microsoft’s online directory lists over 30K partners.

Tags: change, fonality, hosted pbx, mergers, pr, strategy, UC, voip
Related tags: selling change, fonality, cloud, selling, interesting, partners