A lot of telecom planning is driven by Enterprise telecom in the US. The financials are based on landing 6 huge deals per year. Some of that is government and some of that is one of the 30,000 actual enterprises. People forget that the channel originated out of a need for the small business to be serviced efficiently and cost effectively. Hence, the channel was born.
Microsoft, IBM, and Cisco realized independent, well-trained, certified small businesses could sell and service their products to 99% of the market better than an internal team. Microsoft sales wanted to sell to federal government, very large businesses and universities, not Main Street, where 99% of the businesses operate.
The problem is that product development, road mapping and executive decisions are based on Enterprise Telecom thinking, which is why sales take so long. And strategies don’t work out (especially in the two year window allotted).
Most small businesses are not looking to buy Change, which is what Cloud, AI, UC+CC and more is. CHANGE. They don’t have the people or the time to bring in new technology to change how they do business. They just want the new tech to replace the old tech without disrupting business processes – and be a little cheaper. This is the reality of selling today. Status Quo wins much of the time.
We still sell side-cars and handsets because businesses do not like Change. Karen or whoever manages the business or is a significant person at the business doesn’t want to learn how to do everything anew. She wants to keep her processes as they are. That’s why adoption of technology takes so long.
This isn’t a DVD player or a smart phone.
The reason AI is hyping is that Enterprise is playing with it. They can afford to. Small business can’t. They would need an immediate ROI from adopting AI; at least, a concrete business outcome in 90 days.
We hear about POTS replacement constantly. AT&T is turning off their copper network soon. Lumen (CenturyLink) is looking to sell its consumer division (that’s mainly copper). There are approximately 800 ILECs in the US. We only hear about the largest of them (8) – AT&T, VZ, FTR, Lumen, Consolidated, FTR, TDS, WIND. Windstream and Lumen are a mess. Consolidated went private. Frontier went bankrupt, then private and now Verizon is buying them back. AT&T is shutting down copper every where. The other 793 ILECs depend on copper since much of their network has not been replaced with fiber. A percentage of these ILECs have sold to private equity, who will replace copper with fiber where the ROI exists. Another percentage have gotten USDA or other loans/grants to replace the copper with fiber, but for 20-40 million households copper and dial-up are still a thing!
SIDE NOTE: There are 10.6 million residential copper connections in 2023. There are between 20-30 million business copper connections. If you have ever tried to replace a copper connection, it takes time, a lot of time.
BACK to the POST:
They can’t just rip and replace the Metaswitch because the cloud switch probably can’t do GR303. So what will those 600+ ILECs do for a switch? Ribbon most likely. Or homebrew.
Short rant: realized that with the death of copper so goes switched long distance and RESPORGS! Have a client with switched International toll-free numbers and nowhere to port them to as Lumen shuts off the Global Crossing network. You read that right.
In addition, County ordinances have not caught up to non-copper lines for elevators or fire alarms everywhere.
Small businesses are not ready to give up the key system they have running on 3 POTS lines.
This is a disconnect when you look at the stunted growth of UCaaS. Some of this is due to status quo, but a lot of it is due to the fact that most UCaaS systems are built for 1-10,000 and are as generic as store brand potato chips. Vertically integrated platforms can easily demonstrate an ROI and a reason to make a change. Weave does a great job with small offices like eye doctors, veterinary clinics, dentists and other medical offices that are small.
One thing about the market: there are 26M businesses in the US with payroll. 99% of them are under 500 employees. The average employee size is 13 across all 26M. That means the average UCaaS sale will be about 13. The aim is to get really efficient at not only selling 13 seats but provisioning and on-boarding those 13 seats.
Everyone will reply: it is just as easy to sell and provision 100 seats. Sure but the numbers don’t work that way. The average is 13. There are many more businesses with 20 or less employees than there are with more than 20 employees. If you had a sales and marketing strategy to attract and chase businesses of 75-150 employees, that would be remarkable. And go for it! But most of the 2000+ UCaaS sellers in the US, are chasing the small business, sub-20 market. That’s the stats talking. Not every UCaaS provider is RingCentral or Zoom reporting enterprise deals as they happen.
Which brings me back to the Enterprise Telecom is the tail that wags the telecom dog, but it isn’t the way most providers make money. In fact, other 800+ ILECs and 700+ cablecos, most serve very small business. That leads to the disconnect in hardware and road map and everything. You cannot strategize around 30,000 accounts.
As much as Spectrum likes to tout out the title Spectrum Enterprise, I guarantee that enterprise just means more than 20 employees.
One last note:
APIs and AIs work when most of the data is sitting in a cloud service. However, for many small businesses, they don’t have a CRM system in the cloud or much “data”. They have a cash register and QuickBooks on CD. They don’t want to pay Intuit an ever-increasing amount of money every month just to send out 30 invoices. The reality looks a lot different from the Enterprise Telecom pundits. Many small businesses are still getting by on Win 7 and an shared Office 2016 disc. And that reality makes for data that analysts can’t account for when they discuss Enterprise Telecom like it was Main Street telecom.
At least Verizon understand that and has products for different markets: OneTalk for very small business; VCE and now RNG for SMB; and Cisco offerings for the E in SME (Enterprise or large business).