UCaaS has been pushing the rock up the proverbial hill for 17 years. Last year the market penetration of UCaaS was shy of 20%. Today, it is pushing 50%. It took a pandemic!!! Think about that. Many billions spent to build, launch and market IP Centrex, Hosted PBX, Hosted VoIP and then UCaaS – and the message missed its mark (over and over).
According to the Avant State of UCaaS report, the number reason to move to UCaaS is still that my PBX is tired. It isn’t that UCaaS is awesome (or has 30 ways to route calls and simul ring).
Even with the pandemic, businesses are flocking to technology to remain in business, not because the technology is remarkable. It is a need – a new need.
What did we learn? The story of Unified Communications was always off. Just look at the number of acronyms used over the years to tell you that the story was bad!
At CCA earlier this year, the new term they were going to use was “Enterprise Collab” in place of UCaaS. It turns out that most of the sweet sauce of UCaaS was actually the collaboration piece that failed to get mentioned in demos and pitches. Presence, chat, shared documents and conferencing (especially video) were the functions needed for remote work and BC/DR.
Turns out two companies would win: Zoom and Microsoft (Teams).
Despite Microsoft’s past failures with this product set (Lync, Sharepoint, OCS), it is winning with MS Teams. Why did MS Teams win? A recipe that includes price, features, familiarity, brand and number of certified people to install and support it. Who else has that? Not even Cisco.
Zoom – I can’t explain how they turned up 600K users in March. (It took 8×8 ten years to hit that many.) Granted, most are free, but price was never the point. There is a UCaaS provider right now selling seats for $5 per month. They will not reach 600K seats this year.
All of the UCaaS players have roughly the same feature set, so why did 8×8 and RingCentral beat Vonage, Nextiva and everyone else with sign-ups? (I say sign-ups because so much of this was free trials.) Likely brand recognition and execution (and some channel preference). 8×8 has had its own service delivery problems in the past, but I guess they can turn people up quickly. The less friction in the service delivery process, the better off the company will be. That was Zoom’s claim to fame: ease of use!
I’m not suggesting that Vonage, Nextive, Evolve IP, Intermedia and others didn’t get a bump from the pandemic. I suggest that the numbers will show that RNG and 8×8 had a bigger bump. [And Avaya and Mitel had a loss.]
Now, how much of this stays if we ever turn the corner on this pandemic remains to be seen. How many businesses survive also is up in the air. So long term outlook is still uncertain.
Yesterday, a VP at a CPaaS company asked me how to jump start sales.
That was a question that we asked in 2013 when I was working with Vidtel. There are a number of factors: Is the market ready? Are the partners receptive? Does the story resonate? Timing is also a factor.
Seven years after Vidtel, after raising almost $200M in VC dollars, Blue Jeans sold to Verizon. [Zoom was only 2 years old in 2013.]
The tech environment is better today than it was 7 years ago. Smartphones are more prolific. Laptops have webcams built-in (so do some TVs!). Wireless cameras are $100 and easy to install. Wi-fi is a given in every home and is better than it was 7 years ago in many cases. People are use to Facetime and other video apps (Instagram, Snapchat, TikTok, twitch, YouTube). So much has changed in 7 years. (Timing.)
Getting Attention right now is hard. People are anxious and the environment is unstable. That said, the story is the thing. The story has to resonate with the buyer — and the story has to ignore the tech and highlight the outcome. (I have been saying this for ten years!)
CPaaS — who knows what it is? Who cares? You know what matters? What can it do for me? How easy is it to use? WIIFM!!!
No one cares about the features. They care about what the features can do for them. Keep that in mind.
During EC last year, the demos I attended just flipped around highlighting features. What a dumb way to demo. You demo to what the buyer needs; what other buyers have complimented; not on the newest, shiny widget. Oh, well. That’s why it took 17 years and Microsoft won (75M daily users).