On Rad's Radar Archives - Page 61 of 376

Tidbits # 2428

IOT

Cisco buys Jasper Tech for $1.4 billion, because Jasper’s IoT cards are inside GM cars, vending machines and car charging stations.

The number of IoT developers is growing exponentially – “According to VisionMobile’s new IoT Megatrends 2016 report, 4.5 million developers are working on IoT applications.”
According to TechRepublic, these developers are buying into revenue, not hype. Well, I would beg to differ as noted by the shift away from Wearables. I think even programmers follow the hype, then when the money isn’t there move on. To me some of this feels like PowerBall lottery: play now, gamble some money (time and sweat) for a chance to be a millionaire.

The Lottery Economy is best explained by NYU Professor Scott Galloway in this very good 16 minute video.

Conferencing

Robert Scoble demos Speakeasy conferencing. It is an 18 minute demo, which is way too long. Well thought out features from a user perspective. Only iOS mobile app, but for folks like my brother who have replaced their laptop with a phablet, it will be great. Craig Walker and UberConf have some competition.

I shared this with my clients: West’s study on How Companies are Using Collaboration Solutions – An Infographic Examining the Status of Unified Communications in the Workplace.

For channel partners, I will mention this again: there IS $$ in conferencing. PGi was acquired by private equity firm, Sirus Capital, for $1 Billion! PGi is a pure play conferencing company.

VoIP Phones

I don’t know if it is the competition from other phone manufacturers – like Yealink, Grandstream, Mitel/Aastra, Sangoma, OBIhai, Panasonic and others – or if it is the fact that many desk phones are being replaced with headsets (winners here are Jabra, Sennheiser and Plantronics), but Polycom revenue is in decline.

Channel Management

Advertisement: My ebook, Secrets for Channel Managers Kindle Edition is available!

Tags: books, channel managers, cisco, conferencing, IOT, mergers, polycom
Related tags: conferencing, channel, developers

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February 5, 2016 , On Rad's Radar

A Big Deal in the Works?

The rumors are swirling about a couple of big deals in the works. I think many folks would like to see Comcast buy T-Mobile.

I don’t think anyone wants to buy Sprint, whose wireline – the old Pin Drop fiber Network – is only bringing in $581 million in revenue these days. That won’t help offset the $33.8 Billion in debt that is hanging over them.

There is often talk about who Level3 is going to buy next. As a channel partner of Level3, I hope they forego acquisitions for another year. They have some positive movement in the TWT integration going on, good people in place – don’t mess with it! They even have some interesting products like Managed SfB. Go Organic!

The cable space has quite a bit of M&A in the works with the TWC-Charter-BrightHouse deal still waiting FCC and other state approvals; Altice is buying SuddenLink and Cablevision; and folks are waiting for ABRY to dump RCN and someone to scoop up WOW!. All about scale and grown no matter what, right?

It seems all the rumors are around Comcast, Zayo, Level3 and T-Mobile. It leaves out the rest of the CLEC market – namely, EarthLink, XO, Integra, Birch. I put Windstream and CenturyLink in the CLEC puddle because while they are mainly RLECs, it isn’t what they are known for.

Birch is already working on moving to Canada with their acquisition of Primus Telecom. Maybe they don’t like the Presidential candidates any more than I do?! Zayo also made a Canadian buy – Allstream.

EarthLink sold off its IT business to Synoptic for $29 million. ELNK gets a small amount of cash but looses about 100 talented employees. I guess EarthLink is staying focused on the Retail space.

While there were rumors about VZ selling off the old MCI assets currently named VZB, the CFO said that was not the case. The Terremark data centers are on the auction block according to reports, but no word yet on any firm sale. But rumor is abound about Verizon buying XO, mainly for its wireless spectrum.

“XO is the largest owner of LMDS spectrum, currently [2007] worth $35.8 million, in the nation. NextLink, the wireless operation of XOHO, recently launched its broadband wireless services in Las Vegas and increased its wireless portfolio to 14 markets at the speed of covering 1 to 2 metro areas/month: Washington DC, Boston, Atlanta, Tampa, Miami, Nashville, Chicago, Kansas City, Dallas/Ft. Worth, Houston, LA, Seattle, Phoenix, Las Vegas – already more than its almost only competitor in LMDS fixed wireless services, FiberTower. The remaining large LMDS spectrum owner, Level 3, through its acquisition of Telecove.” [seekingalpha] IDT also owned a chunk of this spectrum too.

LMDS operates between 28 GHz and 32 GHz and falls in the microwave sector of spectrum. For 5G cell service, the FCC may be approving this band soon. If VZ can pick up XO for $2B, that is far cheaper than buying spectrum. It would have spectrum in 15 metros to trial 5G with.

Spectrum is the new beach front property.

This makes Level3, FiberTower and IDT worth a little more.

XO’s long haul network consists of a good amount of IRU on Level3’s network, which would be a hiccup for someone buying them for their network instead of for the customers and the spectrum.

We should see by March if this is a go or not!

Tags: birch, comcast, earthlink, fiber, mergers, spectrum, sprint, vz, vzw, wireless, xo
Related tags: wireless services, spectrum, level, wireless, buying, network

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February 3, 2016 , On Rad's Radar

How To Win at UCaaS

Wainhouse research says that the UCaaS industry will grow at a rate of 24% year over year. 8×8 is doing that with their revenue. “Total revenue of $53.2 million increased 29% year-over-year; service revenue of $48.9 million increased 29% year-over-year,” despite still losing money.

Seeking Alpha wrote, “RingCentral’s move upmarket is substantially increasing their revenue per seat and allowing them to drive the top line.” Well, same thing at 8×8, which raised its ARPU to $369 from $305 last year. Yet it only took a couple of really big sales (one being Netsuite’s 2400 seats) to move that needle. Like I have said before one big sale is the same as 10 or 20 smaller sales, which is why everyone looks up-market.

Seeking Alpha continues with RC, “The added revenue per seat is generating more cash flow that is being reinvested into their sales and marketing effort which will continue at 40% to 45% of revenue. The return on those marketing dollars spent is not accurately reflected in the share price given the lifetime profit and revenue generated.” That means that RC – and its other UCaaS brethren – are pouring 40-45% of revenue into the cost of acquiring customers! That includes commissions, SPIFFs, free phones, ads, pay-per-click campaigns, websites, etc.

SA also notes, RC “Shares continue to trade at a significant discount to the high-growth SaaS peer group due to overblown competitive fears.” It is hyper-competitive, but the market for UCaaS is set to explode according to every single analyst. We are at less than 15% penetration and the IP Transition has only just begun.

Unfortunately, there are some factors that will get in the way. One is most people are going all mobile, all the time. So they won’t need a UC seat. Also, other folks will just be swapping a PRI for a SIP Trunk. No UCaaS seats there either.

The other big factor is the technology and engineering mindset that most of the ITSPs have. Founded and run by engineers who are enamored with the tech. Like they are going to out-tech the next guy.

Let’s look at some things. One, most users utilize less than 7 features!!! So who are you building all these widgets for? Call Quality is still an issue — THAT is what you should work on.

Two, it becomes too complex. Too many features, not enough user design, so people don’t use it. No one reads the manual. No one asks for directions. So Simply it!! The Genius can simplify stuff; anyone can make it complicated.

Look at the apps that are popular – Kik, WhatsApp, Skype, Snapchat. Why are they popular? Simple to use. Told a story users wanted to believe. Network Effect. Many features, but one main function.

If you think you have the killer function – the next Kik – then your story should be a lot like Slack – 2 million daily users in just 2 years.

Box.net came before Dropbox. Similar stories, functions, etc. Dropbox hacked growth with a network effect of users getting users for them with a simple referral plan and s stupid simple interface (like Google’s home page versus Yahoo’s home page).

Three, RC and 8×8 are the big names because they Market! They spend on Branding and PR and marketing. And the rest of you really do not. It isn’t even about out-spending them; it IS about smart spending.

Lastly, stop being a tech company. Your customers want you to provide technology, take it out of their hands. To do that well, you have to be in Show Business (see last post). I have said it before, when 8×8 changed out the C-Suite they transitioned from a tech company to a Sales & Marketing machine — and that is when they took off with 20%+ growth every year.

So if you are hobbled for growth, stop playing with the tech and start marketing to get sales, before some other company takes over your market.

Tags: 8×8, branding, marketing, sales, technology, UC, UX
Related tags: revenue million, network effect, million increased, sales marketing, seeking alpha, revenue

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February 3, 2016 , On Rad's Radar

Momentum Trolls Windstream (Going Up-Market)

I received this email yesterday from Momentum with the letter attached (with far too much private info not blacked out.)

“As many of you already know, Windstream is eradicating their SMB Business (Customers billing under $1500) and sending them letters like the one I have attached. Go get your customers and find them a happy home (preferably Momentum) before someone else does. Let me know how I can assist.”

Windstream has decided to go up-market. Everyone has. RC, 8×8, Comcast.

There are 27.5 million small businesses in the US according to 2012 data from the SBA and over 22 million are self employed with no additional payroll or employees (these are called non-employers). The SBA defines a small business as an enterprise having fewer than 500 employees. There are only 18,500 firms with 500 employees or more in the US. [infographic]

So the 22 million will be using cell phones or services like Grasshopper, RC, FreedomVoice or other Google Voice type auto-attendant in the cloud service. That leaves 5.5 million that can be targeted in the SMB category. [By the way, IDC says that there are 8 million business with under 100 employees to target.]

SBA data shows almost 1 million businesses with between 5-9 employees. However, a 5 employee business at $30 per seat is $150 per month. You need a lot of them to scale and move the revenue needle.

Or you need to be like an MSP, roll a bunch of services together to increase ARPU to $1000 per org. 8×8 ARPU is $369 now (up from $309 a year ago) as they went up-market, but those numbers get skewed with 2 large deals (one being 2400 seats). It only takes one 100 seat sale to match 20 smaller deals, right?

Something to ponder: Can you afford the cost of selling to them and supporting them?

There are more than 75,000 business with 50-74 employees and another 37K with 75-99 employees. Over 100K business in the sweet spot. And that is not mid-market. That is the top of the heap of small business pyramid. Not many CLECs or ITSPs have more than 40K customers. There is room there.

When businesses talk about going up-market, I wonder if they realize that the competition in the Enterprise market is blood red – to chase firms who are risk adverse in procurement. By that I mean that they will only purchase from brand names because no one is going to risk it by buying from an unknown brand. No one gets fired buying from IBM, Dell, AT&T.

Tags: marketing, sellecom, selling, smb, strategy, windstream
Related tags: million businesses, business, employees, million, market, going

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February 2, 2016 , On Rad's Radar

Monday Morning Thoughts on Sales and Strategy

This testimonial for ANPI by an RLEC is worth listening to just to understand the thinking behind moving to cloud comms. Try at least the first 90 seconds.

Seth Godin’s blog today describes not a pyramid, but a Frustum. Seth uses the music business as the example, but it is the telecom industry today. There are no winners. There are lots and lots and lots of providers doing the exact same thing.

And in channel building, it isn’t about getting 450 partners, because truthfully it will be 45 that make you all the money. The other 405 are overhead.

Developing a strategic plan means not only describing the product, the outcome, the target market, but what success looks like. Often we just have a nebulous revenue number in mind or hundreds of millions.

Everything is a race to raise millions, be a unicorn, cash out big. It is the new lottery system. It isn’t reality.

At the end of the day, what is the business strategy? What is the Why? What is the exit strategy – or are you building a business built to last?

I notice that every channel exec and every telecom exec says that the reason that things are off – or they are not growing as much – is because sales people can’t sell. While I understand that telecom selling has not kept up with the times, I also think that the providers, the execs, the marketers have done a crappy job of telling the story.

Throwing words like Hosted PBX, Cloud, IOT, SDN at the marketplace is nonsense. It’s inside baseball jargon that doesn’t mean anything to the buyers. No one is searching for hosted pbx on Google. The fact that we have gone through so many terms – Hosted VoIP, Hosted PBX, UC, Hosted UC, UCaaS – just goes to show that we don’t know what the f we are selling. A new acronym is not going to move the needle. A new story will. Plain language will. Talking about Solutions, Business Outcomes, take-aways, not features and products. (More here)

Selling needs to change. But so does all the friction in buying and selling telecom. No one makes it easy.

And speaking of friction, AT&T is pushing its IPFLEX, scaring customers with the noise that all the copper is being retired, basically forcing people to transition to IPFLEX from TDM PRIs. However, you can’t run faxes on it – still! IPFLEX is just a SIP Trunk — like oh so many providers offer in much the same way. There still needs to be a pipe. But either way, it is simply pushing a Product, not delivering a Solution. It is fear, friction, frustration.

I guess I have been beating the same drum over the last three blog posts. A little repetitive, but maybe we need to hear it more than once, in a couple of different ways, before we realize that this blog is in fact a mirror for you.