Thoughts on IT Expo West

Last week I was in Austin for IT Expo West. My general impressions were that the event was busy: well-attended by exhibitors and attendees. There were lots of speaker/panelist sessions. What continues to be striking about IT Expo and the internet telephony industry in general is that the thought and market leaders are not billion-dollar corporations. Instead the leaders are inspired individuals and creative small companies.

As I walked around the exhibit hall and the breakout sessions I kept coming back to two main thoughts: this industry is converging around a handful of opportunities and each opportunity remains largely up for grabs.

• Consumers are not the main focus of most exhibitors at IT Expo but leading players like Skype and magicJack had a presence. The main questions in this space remain unanswered: What will home phone service become over the next five years? How completely will mobile phones take it over? Will it morph, through video, into a feature of TVs?
• Cloud-based unified communications service for small to medium-sized businesses seems to be the primary opportunity focus of exhibitors and attendees. As a general strategy this seems to make sense: SMBs are numerous, fragmented, and always looking for a competitive edge. But, again, some of the main questions remain unanswered: Who is going to cut through the clutter and develop a credible SMB solution-provider brand? Who is going to make it easiest for SMBs to gain real value from a new communications solution? Is anyone going to innovate a killer app/feature that will capture the imagination of SMBs?
• Enterprise and government markets are a focus of a number of exhibitors and attendees but, at least to this observer, with a couple exceptions there wasn’t much innovation or energy around this opportunity. Perhaps the infrastructure and scale expectations of enterprises and governments – and their typically-long sales cycles – scare off innovators looking to prove marketability in months instead of years.

I think that the door is now wide open for someone to do what Vonage and magicJack did for consumer VoIP – make it simple, accessible, and omnipresent – for SMB cloud-based unified communications. My guess (hope) is that the company that does it will, like Vonage and magicJack, be a new player rather than a well-known brand. They will approach businesses in their language – meaning the messaging will be about growing your business, retaining your customers, and making your team more productive rather than about the technology itself. They will offer a solution that is fully assembled and ready-to-use rather than something that requires upfront customization and plug-ins. And they will offer a mobile user experience that is as powerful, if not more, than what is available in the office. And if they can add a “secret sauce”, something their solution does which is different and cool, then they could break out from a dense pack of aspiring service providers.

I have an idea of who just might do it . . .

Matt Bramson, InPhonex Chief Marketing Officer Keynote Speaker at ChannelSolutions 2011 in New York on 1/25/2011

I am looking forward to being the keynote speaker at ChannelSolutions in New York next week. This all-day conference should be extremely worthwhile. Unlike a lot of other conferences this one promises to be refreshingly tactical. It is billed as an ”event [which] will bring experienced providers and sales partners together, sharing their insights on what works, what does not work, and why.” During the course of the day we will hear from more than a dozen providers of innovative business services. There is still time to register at http://channelsolutionstoday.eventbrite.com/

For my keynote I plan to establish a tactical tone at the outset. I believe strongly that 2011 and 2012 are going to be momentous for the business telecommunications marketplace. The next 24 months will be pivotal in determining the landscape for years to come – especially for cloud-based service providers and service distributors. Why do I say that?

I entered the telecom industry as a serial entrepreneur on the heels of the Telecom Act of 1996. I decided telecom was the wave to catch so I jumped on board what looked to be a promising ride: Craig McCaw’s Nextlink. The last 15 years have taught me how to read the currents, winds, and tides. Some are widely recognized like the transition to packetized voice, increased broadband penetration, the growth of wireless and smartphones, and the advent of the cloud-based service model. What makes the next 24 months so promising is that other forces are beginning to have a major impact. Here are three that need to be understood and mastered:

1. Customers are changing. They are increasingly comfortable with the idea that they must provide certain key elements of business solutions like adequate, high-quality bandwidth, a reasonably-well-engineered LAN, and an ability to quickly master user interfaces. Expectations like LAN assessments, on-site installation and training, and provider-performed moves, adds, and changes are diminishing – fast. The same people that have learned how to setup a PC or two, a wireless LAN and printers, and a NAS at home are gaining the confidence to do the same thing at work.
   
   
2. Services and service providers are changing. The fastest-growing business telecom service providers don’t have their own network or dozens of data centers or armies of field technicians or even large sales forces. What they have are services that solve important business problems and the ability to sell and deliver those services. Services are changing too. The cloud-based model provides efficient means to deliver specialized solutions. The old model presented major obstacles to creating a solution for a single type of business – the emerging model makes it possible and even preferable. And the large business telecom provider orthodoxy of never crossing the demarc has never been as crippling for them as it will be over the next 24 months.
   
   
3. Sales is changing (and needs to more and faster). Since about 1990 – the advent of the AT&T/MCI split-screen ads – telecom sales has been about making and proving one claim: a comparable service at a lower price. Telecom “salespeople” simply needed to find out what a business was buying and how much they were paying. Then they offered an equivalent service at a lower price and, a decent percentage of the time, they got a new customer. Most still practice the same approach. The large business telecom providers seem more or less convinced that this “sales” approach doesn’t urgently need to change. They just need to keep putting products and pricing in the hands of their “salespeople” that allow them to keep on keeping on. But the game has changed – and will continue to – right under their noses. It’s like the story of the boy who rode his bike across the border everyday – the guards would search him and find nothing – because he was smuggling bicycles. Telecom salespeople couldn’t/wouldn’t sell solutions so now they don’t – they sell bandwidth and other basic, commodity services that enable others to sell solutions on top. They’re selling the essentially the same stuff as they were 15 years ago only it’s not the solution anymore – and many seem just as blind to it as those border guards were.

What I think all this adds up to is a unprecedented opportunity for cloud-based business services providers to use the next 24 months to realize huge growth. Here are the keys: offer services that the large providers can’t or won’t, leverage the willingness of customers to be part of the solution, and – most important – sell through understanding and solving business problems (or partner with companies with salespeople that do). Two years from now several currently-unknown companies will be well on their way to $100 million in annual revenues from sales of cloud-based business services. I wouldn’t be surprised if one or more of them is in the room with me in New York next week.