I like the hope and promise of this article on UCaaS: that there will be consolidation in UCaaS and CX will lead the pack. It is the same message coming out of Skyswitch Vectors this week in Nashville.
On Consolidation: Are there too many providers: absolutely. Will there be consolidation? A little bit but most providers are losing money for 18+ months on every subscriber, so how do you sell that? And who will buy it?
I thought that the Broadworks players would have mainly merged together but that has not even come close to happening. Momentum has picked off a couple but most are still standing.
Dialpad just hit $200M in annual revenue. They are a little ahead of Weave which is at $142M with a loss of $40M. Dialpad is about to add 12 AI tools in 12 months. I’d say they are spending a ton of dollars on development, so they probably aren’t profitable either.
Most providers in the US offer Hosted PBX/UC from a white label solution and have less than 5000 seats. These won’t be consolidated either.
The dream that PBX will disappear is unrealistic. For many SMB that is a cost effective solution as it is sold to them. In other words, they are just looking to replace a dial-tone and phone system – and the sales reps they talk to do not dissuade them from that replacement transaction.
UCaaS providers are growing but a lot slower: under 20% YoY. They are facing price compression, profit decline and an increase in the cost of customer acquisition and retention!
Several Broadsoft shops have moved on to other solutions including reselling another vendor solution.
Metaswitch shops are now looking for a new platform, since Microsoft is finally doing away with Max UC. The Microsoft vision for every SP is a big pipe to Azure to get your vSBC, your NFV version of Metaswitch, DaaS and your end point, MS Teams.
Why have a couple of UCaaS providers cut commissions to channel partners? Why are they shifting resources to direct? Control. Hoping to control the pipeline. Hoping to control the cost of sales. Although not many know what the real cost of a sale is.
As we move from UC to UC+CC, add in AI and other bullshit, it will be specialists selling the solution. Those specialists will either be partners or direct reps, but wait until RNG trains up a sales team and half of them leave. They will stop training them – and the cycle of dysfunction will continue.
Selling PBX replacement is something most salespeople and partners can do. Solution Selling CX is harder and many salespeople and partners lack the necessary sales talent and soft skills to do it.
Also, large deployments have years of integration and development work ingrained into the functionality of the platform. What person is going to godfather the project to migrate that duct taped system to the cloud? Not many people. Who wants the headache?
On another note: Read Jeb Blount’s Sales EQ book and you will see the problem that all sales departments are facing. A changing Buyer persona; a disrupted sales process; a different Buyer Journey; transparent pricing and info; and other factors that cripple selling.
As the CF article stated, several UCaaS providers are shedding people. That will have an effect on sales as well.
Sales are taking longer, especially bigger sales, according to partners and vendors on financial calls.
Everyone is betting on AI, but I don’t know what the bet is. Can AI really help my salespeople close deals? Unlikely. You can’t leverage AI for soft skills; maybe product knowledge, but not EQ. AI can’t build trust. AI can help with time management possibly – and that can help sales people, but it isn’t the end all be all.
Add all the AI you want. You still have to feed it info (like product knowledge, buyer persona, and more — info that not every company has.)
Can AI dig through CRM to profile best and worst customers? I have no idea but if it could that would be helpful.
I only hear about AI being a chatbot or a writer. We are in some interesting times.