Right now there are a number of factors surrounding voice. The Metaswitch acquisition by Alianza, the second time that Metaswitch has been sold. The bankruptcies of Mitel and Avaya. The disappearance of NEC from UC. The neglect of Broadworks as Webex Calling is pushed. BEAD money. Broadband dominance.
For softswitches providers have a few choices: Crexendo/Netsapiens; 2600Hz; homebrew with Freeswitch (Sangoma); 3CX; Ribbon; Alianza; Intermedia; and I don’t think they can buy Metaswitch or Broadworks. They would have to buy a CSP using it or third party it. If you don’t want your softswitch vendor to also be a competitor you are limited.
If you still sell copper like many of the 700+ mom-and-pop RLECs do, you really have a problem. No one makes a switch for that.
Metaswitch will move to the cloud and won’t enable GR303 anymore. Alianza has a huge payroll and at least $100M in debt from buying Metaswitch. They are betting big, but I assume after Navigate25 there will be layoffs as the ship starts to right-size.
With the BEAD and broadband push, ISPs and their PE owners don’t want complex voice offerings. They want simple voice. That is available from every CPaaS provider, any softswitch, even the SBC vendors. Being able to offer SIP trunks is easy. Choosing a vendor is tough because there are so many choices. And not much good data on the vendors. Many of the vendors – like Sinch and Infobip – are like Lumen, a collection of mergers. Sinch owns ANPI and still runs that BroadWorks!
UCaaS has single digit CAGR for many reasons: confusion; lack of a market fit; lack of verticalization; noise; poor service delivery; lousy user adoption; and stale sales people. We went from pushing UC&C to UC+CC to UC+CC+AI. The buyers have not caught up yet.
Also, much of the product development is for Enterprise, a market largely owned by Microsoft. That is 0.1% of the market. 99.9% of the market consists of small business. They usually buy Voice. Very small business uses a workforce platform like the HVAC, flooring, repair techs who often visit my house. Text, call, quote, invoice, pay – all through one app that works on a hardened tablet or cell phone. What do they need 8×8 for?
Well, for Direct Routing is what they need 8×8 for. With almost 400M desktops using MS Teams, we are full circle back to selling minutes. Dial-tone and SMS enablement through a variety of means, but a price compressing offering nonetheless.
8×8 used to be a patent house. Now it is celebrating being a SIP provider. You take the revenue the ay it comes, but this isn’t a long term play.
This is what is happening: offerings are created for Enterprise and vertical offerings are being created for small business. It will create big problems for UCaaS providers.
Also, the Buyers are changing. How many Mobile UC offerings are there? Maybe 2. VZW OneTalk for one. Everyone has an app but that doesn’t mean it is mobile UC.
AI is great but it requires data. Small businesses don’t have data so the AI has no food to work with. And small business isn’t going to pay $20K for a data scientist to extract that data.
And the hype around AI makes Buyers worry. They don’t want to make a bad decision. They don’t want vaporware. They don’t want to be the early adopter/guinea pig. and again only bigger businesses re the target of all this AI PR.
We also have big companies laying off like crazy. Those $1M TCV deals will never reap $1M.
There are so many factors at work that running a UCaaS provider or a softswitch/white-label is a huge challenge today.
It’s like they are doing product dev work without customer input. If you are Henry Ford or Steve Jobs, sure, but the rest of the crowd should probably get some feedback.