Friday, February 4, 2011

Thursday, February 3, 2011

IT Expo 2011

I spent the day today at IT Expo at the Miami Beach (just across town from our headquarters) and here are some observations and thoughts.

Concern About the Channel

More than one person today has asked me my opinion on the future of the channel, meaning the telecom agent channel. The concern is that channel programs appear to (again) be threatened with major carriers, like – most recently – Verizon, dramatically shortening the list of products the channel can sell and others – like AT&T – insisting that agents bundle mobile phones and plans into sales to qualify for commissions, looking to push the channel in ways that may not be beneficial to its health. But the more profound threat – and to me the more interesting one – is whether the decided shift to complex, cloud-delivered solutions is one to which the channel will successfully adapt.

There is no question that the stereotypical telecom agent – who knocks on doors, learns what a company buys today, and returns tomorrow with several quotes for comparable service for less – faces a challenging transformation. Those that will thrive, in my view, are the agents and agencies that understand their customers – and perhaps are vertical or even niche-focused – and that view the glass as at least half full. Yes, it’s true that the old way of doing business is going away but the new way actually offers tremendous opportunity. Instead of selling Internet access for perhaps $20 per user per month you can sell hosted applications that could amount to $100 per user or more. Agents that spend the next year clinging to the old way will fail. Those that embrace the new opportunities can prosper.

Knowing your customers and having a narrow focus could be a real key. Here are a couple interesting examples. Did you know that in the US alone there are 350,000 dentist offices? Focusing on just dentists – by developing a suite of applications that meets their specific needs – could result in a huge business. If you assembled a bundle of hosted applications – PBX, CRM/Practice Management, HIPAA-compliant storage/backup, and a few other apps – you could offer dentists a differentiated choice to the generic offerings of the leading telco providers. And if 10% of all dentist offices became your customer for $500 each per month that would be a $200 million business. It’s just an example – but it does illustrate that there are types of opportunity available today that didn’t exist a few years ago.

Clouds, Clouds Everywhere

Walking the exhibit hall floor it is clear that “cloud” is a term that is nearly-universally embraced – in the industry. Most booths and collateral display the term prominently. The challenge with this – and any industry-darling buzzword – is to make it relevant to customers. “Cloud”, in my view, has a ways to go on that front. The real benefits of cloud-based application delivery depends on customers changing how they operate too. A business that still runs mostly conventional installed software and stores much of their data locally is not going to fully benefit from the potential of the cloud. How many businesses are really ready for a cloud-centric methodology? Who will educate them to the wisdom of this approach? The answer is likely circular: whoever does will be successful at selling them a bunch of cloud-based services.

Now I’m off to Startup Camp – one of my favorite features of IT Expo.