What are mid-market* and enterprise* businesses looking for in Cloud Comms?
A solution that brings together voice, conferencing and Slack-like communications with a contact center, say enterprise telecom consultants. I guess they do want a platform – one integrated system. You don’t get best of breed that way. You get mediocre across the board, but if it scales, is reliable, and works – okay.
As a UC provider you need to have serious answers to the following questions if selling to mid-market or enterprise – or be cut out of the deal says CDW:
- If the customer has Avaya, what is the Avaya Plan? Forklift upgrade? Migration? Have a plan/procedure ready. (see RC’s answers)
- If they want Zoom for video conferencing and calls, how do you work with that platform? Is there integration?
- If they have Microsoft Teams (E3 license, not yet the E5), what is the plan? Since going to E5 and adding in voice capability adds about $30 per seat.
- If they want to keep Slack?
These are the scenarios in winning enterprise level accounts.
What happens to Avaya? The numbers on the surface at Avaya look good, right? $700M+ revenue per quarter (~$3B in annual revenue), 23% EBIDTA, 3M cloud seats, 100M+ seat base, $1.1B market cap with $3B in long term debt and net losses. There are 3 possibilities.
- They get bought. Since Mitel and RingCentral looked at it and walked away without a deal, I would say that being acquired will happen as a fire sale – not in the next 9 months.
- The RingCentral joint venture would be a big win for RC; however I don’t see what Avaya gets out of giving away the customer list without a sale. RC likes JV’s like they did with AT&T and other ILECs, but that won’t work for Avaya who needs more than incremental revenue — they need a plan.
- Microsoft, Cisco or some giant (Amazon or Salesforce) buys them for $4.5B just to grab the customers. It won’t be a Cloud Contact Center company like Five9, InContact or Genesys, they don’t have the market cap (hence ability to raise the debt needed).
There has been chatter about the fact that Zoom added phones but may suck at the telephony piece. Salesforce didn’t get into the telephony business either. Amazon didn’t. Google and Microsoft have with the assist of bandwidth.com so maybe Zoom just needs a partner like that.
The UC field is still open but it is certainly tilting toward the bigger players in the enterprise space (Cisco & Microsoft have the advantage here). In mid-market it is about replacing premise based systems but keeping legacy functionality while adding next gen features like omni-channel. Legacy PBX companies like Mitel and NEC have to make a decision too. Panasonic did by choosing to joint venture with Star2Star. NEC and Mitel have cloud products but do they have a plan to migrate their customers to them before they get poached by a cloud provider?
*What is mid-market? My definition is 500-1000 employees but everyone has a different definition. SMB is up to 500 employees, representing 90+% of all businesses in the US (some 25 million companies). There are only 32K midmarket businesses with annual revenue less than $1B and more than $50M.
*Enterprise to me is more than 1000 employees, which many agree with and includes companies with more than one billion in annual revenue. There are about 15K of these companies.