Insider Report November 2022
The Most Important Enterprise Communications News from November 2022
What an incredible month. As if war and a teetering economy were not enough, in November, we had an election, the Elon Show at Twitter, the FTX meltdown, Thanksgiving, at least a week of Black Friday (or more accurately Cyber Monday), Kanye West, and the World Cup. I figure November 2022 was the end of the pandemic. I’ve been feeling the pandemic ended several months ago as (packed) business events returned, but retail fights over Elmo toys closed the deal.
There is no fear of Covid anymore. That’s not to say that Covid is over. China recently reported a new record in daily Covid infections, and its zero-tolerance approach to the virus continues to threaten supply chain disruptions (as does the US-China relationship in general).
The story of the month has to be the crash of FTX (although Elon’s Twitter probably had more coverage). I try to keep this newsletter focused on enterprise communications, but the narrative around FTX requires a correction. FTX is a financial disaster. Millions of people have or will lose an estimated total of 4 billion dollars, and that number continues to increase as contagion spreads into other projects. It’s also embarrassing because so many people thought FTX and its leader SBF were legit.
The failure of FTX has caused widespread fear and concern over crypto assets, and that’s where the narrative needs to be clarified. I keep seeing coverage about how dangerous crypto is and how it needs more regulation. This narrative has been building along with a few other high-profile disasters, such as the collapse of stable coin TerraUSD.
I remain confident regarding selected crypto assets for the simple reason that nothing has changed. Many of these coins have seen spectacular growth in value and utility. Bitcoin, for example, continues to work exactly as it was conceived. Yes, its value is down, but so are most asset classes. Crypto is generally down less than the tech sector, and more stable than several fiat currencies.
Nothing regarding the core benefits (and risks) of crypto assets has changed. There has never been a hack of bitcoin itself, and efforts continue to extend the technology to solve real problems such as improved access to services, faster transactions, and the creation of a global currency. The hacks, crimes, and scams in the headlines are associated with an extended layer of services such as crypto exchanges and stable coins.
Customers gave FTX their crypto assets to hold and trade on their behalf, and FTX stole or lost them. FTX’s failure tells us nothing about the value or quality of said assets. Crypto is a relatively immature technology area, so acquiring, transferring, and holding it is more manual than stocks and bonds. In an odd way, that’s actually part of its attraction, as there is less need for intermediaries. FTX, and others, promised to simplify these processes — as did Lehman Brothers.
The crash of FTX will likely result in increased regulation, and that’s not necessarily bad. It should be noted that regulation didn’t stop far larger financial disasters such as Enron, Lehman, or Bernie because fraud is hard to regulate. While regulation could be good for the sector, I’m concerned because few government officials seem to understand crypto. It’s also concerning that the financial establishment, which is threatened by crypto, does have influence on Capitol Hill.
General Industry News
The Great Resignation RIF: The belt continues to tighten. Amazon, Google, Meta, and Snap all missed big on earnings. Those at least have a partial explanation: advertising revenue. Google’s ad revenue grew just 3% last quarter, down from 43% a year ago. For the first time ever, YouTube ad revenue declined. Of course, it’s worse at Twitter as advertisers flee.
Layoffs are widespread across tech, and the numbers are getting big. As I continue to read about big cuts across enterprise comms, I can’t help but think about the airline mess. While we were all working from home during the early part of the pandemic, the airlines were largely grounded, and they cut their staff. Suddenly, travel is back in vogue, and the airlines can’t hire enough. But pilots, in particular, take years to backfill.
Let’s be clear: The most valuable asset in comms is talent. The good news is that hiring great talent has never been easier; the bad news is that an extraordinary amount of talent has been displaced. It sets back the industry far more than most realize. Know-how can theoretically be replaced, but industry-specific history and experience are priceless. Not to mention the amount of wasted time associated with the modern hiring gauntlet. Can you imagine the amount of hiring and orientating Twitter will be doing over the next year?
Of course, this won’t last. When times are tough (and good), corporations need to invest in modern solutions for collaboration. Consider this month’s case study: Frontier Airlines. Times are tough, so the carrier will move exclusively to digital solutions for customer service … to cut costs. Profits and valuations fluctuate, but the tech only marches forward, and it would be so much better if it weren’t hamstrung by all these layoffs.
The Future of Twitter: I’m not alone in wondering if Twitter will survive. Elon has turned the social network into a spectacle this month. Evidently, being the CEO of two successful companies plus involvement in Boring and Neuralink wasn’t enough to keep him busy (or satisfy his ego).
First, he buys Twitter, then tries to get out of it, then actually buys it, and that’s when November’s Twitter freak show really began. Upon arrival, he fired nearly half the company, followed by a wave of resignations. He floats a $20/month validation symbol, then drops it to $8 without validation.
He’s like the Tasmanian Devil cartoon with a sink. It’s not clear how long Twitter can operate with such a rapid loss of employees or comply with its legal obligations. He has already lost many marquee advertisers. If Twitter does fail, Elon will be the biggest loser. The biggest twit is the biggest shareholder, and Twitter is likely also contributing to TSLA’s declining valuation.
Musk is attempting to fix Twitter with better tech (and “diehard” developers that need to submit code snippets), but Twitter isn’t a technical problem. Validation checkmarks, reinstated accounts, loss of advertisers, and freedom of speech won’t be fixed by better code. His ego wrote a check that his acumen can’t cash. Twitter’s future looks rocky, and Musk’s admission status into the Business Hall of Fame has dropped from Certain to Dubious.
Leadership Changes: Avaya announced Kieran McGrath will retire as its CFO, and Becky Roof was named as its interim (and expensive) CFO. Shefali Shah transitioned from Chief Administrative Officer to work on strategic initiatives. Zendesk named Tom Eggemeier interim CEO. Eggemeier was a partner at Permira and was previously president of Genesys. 8x8 announced that Samuel Wilson transitioned from CFO to interim CEO after the board terminated Dave Sipes. Vonage announced it appointed Tracey Leahy as its Chief People Officer.
Calabrio named Jim Davies, previously of Gartner, to its exec team as CXO. The company says his new role combines storytelling with strategy. Paul Jarman, CEO of CXone, has departed NICE. Barry Cooper is now president of its CX Division. Televerde announced it has selected former comms exec Chris McGugan as its CEO, replacing Morag Lucey after her retirement. McGugan held various leadership roles at Oracle and Avaya. The CEO of Five9 is now Mike Burkland, and Rowan Trollope has departed the company. Salesforce announced the surprise departure of co-CEO Bret Taylor. Taylor got to Salesforce when it acquired Quip in 2016. He was considered the primary architect of the $27.7B acquisition of Slack and was named co-CEO a year ago. Deja vu again, as Keith Block walked away from the co-CEO role (with co-CEO Marc Benioff) after only 18 months. Benioff is again the sole CEO.
Meetings and Messaging
WhatsApp Directory and Commerce: A new feature called Communities intends to support large circles more effectively. It is designed to house multiple related groups within bigger organizations — conceptually more like Slack or Discord. Also, admins can share updates with an entire community through an announcements channel. Additional new features from Meta include in-chat polls, video calls with up to 32 participants, and an increased maximum group size in WhatsApp of 1,024 users (compared to 512 previously).
Mark Zuckerberg told employees that WhatsApp and Messenger would drive the company’s next wave of sales growth. Zuck is under shareholder pressure regarding his investments in the Metaverse. Brazil is giving us a glimpse of what’s to come, where WhatsApp launched a new commercial directory and test payments tool. The directory will allow users to find companies with WhatsApp business messaging accounts. Until now, WhatsApp only required its users to add a phone number to their contacts (or click a link) to initiate a business chat.
Wickr 2: Wickr Me, the free version of the encrypted messaging app, is shutting down. Wickr was acquired by Amazon last year. The free version will stop accepting new users this year, and the service will end at the end of 2023. Wickr Me is often used by journalists, whistleblowers, and anyone looking to keep their messages away from prying eyes. Alternative messaging apps that support E2EE include Telegram and Signal.
Also, Amazon is making AWS Wickr (the enterprise version) generally available. The service was first announced in July and has been in preview till now. It includes secure text, voice, and video, along with file and screen sharing. It can help enterprises meet e-discovery and FOIA compliance. AWS said that it has integrated the messaging service’s administration framework inside the AWS Management Console.
IMARC Group believes the global messaging security market is expected to reach a value of $11.2B in 2022, up from $5.1B last year. Mordor Intelligence expects the market to reach $14.7B, up from $4B.
Zoomtopia: Last July, Zoom hosted an analyst event that was light on announcements and roadmap. I am pleased to report that Zoom was holding back. The company made several announcements during its three-hour keynote at Zoomtopia, the biggest being email, calendar, and Zoom Spots.
Introducing email and calendar (clients and services) was a bold move. Microsoft essentially holds a monopoly on enterprise email and calendar. Microsoft subscriptions include email, Office and Teams — and as long as customers have Teams, they don’t really need (want is different) Zoom (or other UCaaS apps). So far, the industry has tried to convince customers to forgo using Microsoft’s (or Google’s) included UCaaS apps, but it isn’t enough. Another approach is to displace Microsoft, and that leaves a gap for email and calendar. It’s so crazy that it just might work. Unfortunately, Zoom’s initial release isn’t compelling. The question now is how fast and far Zoom goes. More on Zoom Email in this NoJitter post.
Zoom Spots is clever. The industry has conquered remote meetings but hasn’t nailed the less-formal aspects of in-office interactions. Zoom Spots aims to recreate serendipitous conversations at the water cooler (and in elevators, lunchrooms, vending areas, copier rooms, and other locations). These impromptu conversations are important socially and culturally. That’s the goal of Spots, but the product is hard to define and will likely take a few iterations to get right. Nobody has really cracked the virtual water cooler yet, yet serendipitous conversations are a key attraction to physical offices. More on Zoom Spots in this NoJitter Video.
The event was smaller than the last Zoomtopia I attended (2018?). Possibly because it was a hybrid event this time. The usual suspects were exhibiting, including: Crestron, DTEN, Five9, Genesys, Jabra, HP/Poly, Logitech, and Neat.
Poly and HP: The first hint the two companies are now one is a new Poly Studio for Zoom Rooms. It is a Poly Studio solution bundle with an HP Mini PC and a Poly TC10. The Poly TC10 controller is a new Zoom Rooms controller and scheduling display. This was low-hanging fruit for the combined company. I expect they are working on bigger and deeper levels of integrating their technologies.
Made in China: The FCC has expanded its bans on Chinese telecom equipment and security cameras (Huawei, ZTE, Hytera, Hikvision, and Dahua) in government and infrastructure. This means that prices are going up, and there’s a new opportunity for Western manufacturers. Meanwhile, Apple is telling its suppliers to assemble Apple products elsewhere in Asia, particularly India and Vietnam, and is also seeking to reduce dependence on Taiwanese assemblers. Expect to see more localization of critical infrastructure as East-West relationships become more delicate. I do miss attending the Huawei Global Analyst Summit.
Microsoft and EU: According to Reuters, Microsoft is likely facing an EU antitrust investigation as a result of Slack’s 2020 complaint to the European Commission that Microsoft unfairly integrates Teams into its Office product licensing. Slack has since been acquired by Salesforce.
Does Microsoft Teams stifle competition? Absolutely, but legality is another matter. The US has historically associated monopolistic behavior with higher prices for consumers. Today’s tech monopolists give away services, so the harm is different. However, the DOJ blocked (and a court upheld) Random Penguin’s acquisition of Simon & Schuster using the argument that low prices for consumers should not be the single test. Microsoft Teams is disrupting multiple sectors, including meetings, messaging, and telephony.
The majority of medium and large organizations have enterprise licensing for Microsoft’s suite, which includes Office and email, with Microsoft Teams included in every 365 subscription. This means competitors must both sell their own solutions AND displace the use of Teams for messaging, meetings, and telephony. I expect Teams for telephony will accelerate in 2023 as Teams Mobile gets released in more markets.
Teams is suffocating the UCaaS market. Many providers are attempting to survive through Direct Routing, but Microsoft maintains control over the user experience. According to Business of Apps, the number of monthly active users for Microsoft Teams surpassed 270M, an 86.21% increase from last year. Enterprise communications hasn’t seen a dominant provider like this since Ma Bell.
Separately, EU and US regulators are investigating Microsoft’s acquisition of Activision. Microsoft was previously fined 2.2B euros for cases involving so-called tying and other practices.
Pexip Meet: Pexip announced that its Room Connector feature now enables Google Meet guests to join meetings with their existing video conference systems, even if the meeting host’s organization has not enabled Pexip interoperability. This includes support for content sharing and dual screens.
While interoperability has been very good for Pexip, native interop is suddenly limiting that market. Pexip has expanded its focus to include embedded video tools, especially for secure meetings. Pexip also has developed a strong ecosystem of partners.
Neat Center: This is a companion device to Neat's portfolio of video devices. Neat Center works in tandem with Neat’s front-of-the-room video devices to automatically frame people in tiles. Neat Center attempts to restore the balance between remote and in-room participants. Several vendors are trying to improve the in-room experience post pandemic, but video tech will always do more for remote participants.
Zoom Meetings Risks Manager: Funded by Zoom, Theta’s new MRM solution is available for free in the Zoom Marketplace. MRM from Theta Lake offers a patented solution for Zoom meeting safety. It monitors and tracks security settings as well as troubleshooting and remediation recommendations for discovered risks.
The Final Frontier: Frontier Airlines announced that it intends to eliminate dial-in customer service. The budget carrier will only support customer service via text, WhatsApp, and social media.
Using digital channels for customer service is not new, and many customers prefer it over voice. Hiding phone numbers isn’t new either — good luck trying to find a number for Amazon. However, that’s not the same as eliminating voice (which I doubt Frontier is doing). Digital channels offer a number of benefits, but complex issues quickly hit the digital point of diminishing returns.
Frontier either intends to eliminate voice (which complicates resolutions to difficult situations) or eliminate inbound calling (which isn’t innovative or interesting). Initiating service via digital channels has a number of advantages, including potential deflection, effective routing, triage, and authentication.
Over the past few years, the contact center vendors have encouraged their customers to differentiate via great customer service. However, that advice does not resonate with all contact centers. Many deem their operation as a cost center, and reducing costs never goes out of style.
As the economy turned, suddenly price/cost is back on top. The airlines have more demand than they can serve. Increasing the price reduces demand. Another option is to decrease service (and costs). It is not as if Frontier is the only airline making it harder to call an agent. They should be commended for clearly setting expectations up front.
It’s very likely that many of Frontier’s customers and prospects never call anyway. Their goal is to get somewhere (cheaply), not to talk to an agent. Frontier is essentially attempting to reduce high-maintenance customers. It’s similar to a retailer adding the word “warehouse” or “discount” to its name.
Little is known about the underlying tech at Frontier. I know they are using Cognigy, as is Lufthansa, and that’s encouraging. Doing what they are attempting to do is non trivial if they are successful.
AWS re:Invent: AWS made four Amazon Connect announcements at its annual cloud conference. The first two are GA: forecasting, capacity planning, and scheduling and Contact Lens (analytics, insights, and optimization) for Amazon Connect were extended to Chat. Two features are now available in preview: Contact Lens is getting evaluation forms (scorecards) for agent performance, and Connect’s agent workspace is getting step-by-step guides (no-code, drag-and-drop UI) for better resolutions.
These announcements are fine (Sheila seemed pleased), but that’s not the story, as AWS adds new features to Connect every month. The real story is the larger value proposition of Amazon Connect. The voice-only tool set has blossomed into a very powerful (and scalable) omnichannel customer engagement platform.
AWS has a lot of powerful tools (Connect got about 90 seconds in a two-hour keynote), and while it has always been particularly attractive to organizations that use other AWS cloud services, the CX solution itself is made stronger and more innovative by what might appear as unrelated AWS services.
Two areas that stand out are AWS EUC and the Chime SDK (CPaaS). EUC, or end-user computing, offers several tools for virtual desktops. This allows a centrally managed, secure desktop that’s well-suited for (remote) agents. Amazon Workspaces works with minimal desktop hardware such as low-spec PCs, thin clients, and Chromebooks. These thin, virtual desktops support voice and video. EUC’s Workspaces app also delivers Windows-based contact center applications to a Chromebook. The Chime SDK integrates with Lex and brings to Connect an integrated ML-powered IVR (it’s also available for use with third-party contact center implementations).
Connect, Chime SDK, EUC, Lex, and more are all innovation centers, so together they make for a highly innovative and integrated CX platform. Connect is both an application and what Gartner terms a DevOps CC solution. Regardless of the label, it’s a highly extensible (and scalable) contact center. Last year at re:Invent, Delta Airlines was presented as a major win. This year, at the Connect reception, Delta was joined by another top-tier airline likely to be announced soon.
Observe Zoom AI: Zoom and Observe.AI announced a new integration that allows Zoom Contact Center customers to leverage Observe.AI’s conversation intelligence capabilities. The solution extracts insights that can boost agent performance.
Twilio Flex Updates from SignalCon: Twilio Engage, now GA, sits on top of Twilio’s customer data platform (Segment). While the CDP is about collecting data, Twilio Engage is about activating it. Twilio Engage combines its customer data platform (CDP) and native omnichannel services so that marketers can build data-first, personalized experiences. Jeff Lawson made a compelling point that Twilio is typically on the cutting edge because its customers are building stuff that they can’t (yet) buy. CCaaS and CPaaS intersect around marketing data (and the silos to it). Will Twilio’s shift toward marketing services be trend-setting or an outlier?
Twilio also announced the Public Beta launch of an integration between Twilio Voice and Google Dialogflow CX. This new Flex service enables personalized virtual agents that can resolve common problems.
Contact Center Legacy Implosion: There’s a dull panic spreading among contact centers powered by single-tenant systems. The end of this era, still a long way off, got a lot closer as Avaya and Genesys heightened customer concern about the longevity of their solutions.
Those that can will move to CCaaS, and I expect NICE, Five9, and Amazon will benefit nicely. For the large number of organizations that won’t or can’t go to CCaaS, single-tenant CC will persist. Cisco reports a spike in interest, though its single-tenant solutions weren’t mentioned during its recent CC day for analysts. Curiously, Avaya is the only major single-tenant CC vendor that’s committed (though currently constrained) to ongoing investment.
Avaya Late on Filing (again): Avaya failed to file its annual 10-K, which was due on Nov. 29 (September 2022 year-end). The new deadline, an automatic 30-day extension, is Dec. 29. The company’s last 10-Q was filed on May 10 for the quarter that ended March 31, 2022. Avaya is working closely with AlixPartners, which specializes in financial restructuring. The interim CFO, Becky Roof, is from AlixPartners.
Until the 10-K is filed, it’s impossible to assess the likelihood of Chapter 11. If the 10-K is not filed this year, there will be contractual consequences. I did get a brief update from Masarek, who seems committed to rebuilding trust with stakeholders (that includes over 3.5M CC seats under active management). Avaya announced more than $250M in cost reductions in his first 30 days.
Avaya has simplified its GTM with three sales motions: Classic prem anchored by Elite; Cloud, which features Avaya Cloud Office by RingCentral and the Avaya Experience Platform; and Hybrid Solutions, which combines elements of the first two.
Avaya has active searches underway for CFO, CMO, and CRO. It is unlikely any position will be filled until it files its 10-K.
Magic Quadrant 2022: Gartner (finally) released its 2022 Magic Quadrant. The Leaders this year are Microsoft, RingCentral, Zoom, Cisco, and 8×8. I haven’t actually read the report yet, so I will keep my comments to a minimum; however, a detailed review will be forthcoming.
Though I don’t necessarily agree with Gartner’s conclusions (give me four analysts, and I will give you six opinions), I do respect their process and approach. Regardless of whether one agrees, the report is very influential with customers.
I will comment on the strategic planning assumption on page one: “Through 2025, 25% of office workers in the U.S. and Europe will not be provided wireline telephony, up from 5% in 2020 before the COVID-19 pandemic began.“ Unfortunately, the word “wireline” is not defined, nor does it appear elsewhere in the report. I suspect they are conflating wireline services with PSTN services or UCaaS telephony seats. If so, I disagree because UCaaS and cellular are merging. UCaaS Mobiiity 3.0, or the third generation of UCaaS mobility puts native UCaaS services on a cellular phone. Cisco, Microsoft, and RingCentral will lead the transition.
I don’t think many organizations appreciate the benefits of UCaaS Mobility 3.0 yet, but that will change once Verizon launches Teams Mobile in the US (soon). UCaaS Mobility 3.0 will cause significant growth in cellular (look Ma, two SIMs!) and UCaaS (wireline?) seats. One service instead of two provides plenty of ROI.
Although there’s usually a ton of great content in the entire report, it’s the graphic that gets most of the attention. There’s a tendency to compare the report to the prior year, which is fine, but focus more on the relative changes rather than absolute positions. My overdue report on the CCaaS MQ will be published this year.
NEC Cloud Cash: NEC partners can now get paid upfront for UCaaS and CCaaS sales. VARs get resale and gross margin (phone systems). They also get agent and recurring commissions (circuits). But it’s hard to come up with reasonable financial models when both models apply to alternative products (phone systems and UCaaS). A common remedy is for partners to pay commissions upfront and make it up over time, but that’s a financial burden — a burden that NEC Financial Services doesn’t mind (they did the math). This is a clever solution, and it should appeal to VASRs beyond current NEC partners. More in this post on NoJitter.
Webex Go in UK: I contend that UCaaS Mobility 3.0 will be very disruptive in 2023. The major UCaaS providers poised to benefit are Teams, Webex, and Enreach (Europe), and [email protected] by RingCentral. The major wireless providers ready to benefit are AT&T and Verizon in the US, Vodafone, Telia, and Rogers.
The issue is that customer awareness of the feature is still low. Availability is still limited, but expect regular announcements of expanded availability. I used Webex Go in the UK in October (with a US number), and it’s now GA for locals.
UCaaS for IT: Both GoTo and Enreach made announcements this month to make their IUCaaS offers more attractive to IT decision-makers. GoTo announced enhancements that include a new dial plan editor with call volume analytics. Enreach UK added IT Security and Remote IT Support to its portfolio. IT Remote Support enables remote access to individual computers. Intermedia also targets IT decision-makers.
BYO Google Voice: Google is rolling out SIP Link so that admins can connect BYO SIP trunks to Google Voice. This allows Google Voice to use PSTN services from local carriers via secure SBC (AudioCodes, Cisco, Oracle, and Ribbon) connections. SIP Connect will accelerate the global reach of Google Voice. Google also shared a roadmap for Google Voice (surprising). Although Google Voice is 12 years old, it’s mostly been geared toward consumers. Google appears ready to push its UCaaS suite (Voice, Meet, and Chat) into more businesses.
ALE Purple: Alcatel-Lucent Enterprises launched Purple on Demand, a new subscription-based business communications service, for enterprises. The solution is powered by the Alcatel-Lucent OmniPCX Enterprise Purple communication server and can be deployed on-premises or in a private cloud. It is available in the UK, France, Germany, Spain, Portugal, Netherlands, Italy, Ireland, Poland, Greece, Belgium, Denmark, Finland, Norway, Sweden, Switzerland, Slovakia, Slovenia, Romania, and Latvia, with more countries planned.
Twilio SignalConf: It’s no secret that Twilio’s stock has really tanked. I think it’s a perfect storm of four forces: 1) It’s a bit of a pandemic stock. It didn’t get the spike that Zoom and Peloton saw, but Twilio benefited as its customers moved from in-person to digital. 2) All stocks are down. 3) The economic rules have changed, and unprofitable companies are especially being punished. 4) The company is attempting to pivot/expand its business into customer data management.
The last point was the key theme of Twilio SIGNALConf this month. Post its acquisition of Segment, Twilio is a new company. The old Twilio, the CPaaS provider, is now half the company. The other half is Segment. Twilio has reorganized its strategy into four buckets: Flex (for CC), Engage (for marketing), Verify (for identity authentication), and Frontline (for sales).
What I find fascinating about Twilio is that its messaging is largely the same as CCaaS providers, though its solutions are not. For example, SignalConf was all about customer engagement, digital CX, NPS, silo-busting, CSAT, personalizing via customer signals, Google CCAI, virtual agents, and speed to value. It’s a CCaaS, CRM, CPaaS provider in one, but also none of those. The Twilio exiting the pandemic looks nothing like the Twilio of 2019. The golden thread is that it continues to offer tools for controlling applications and data.
The recurring theme of SignalConf was CAC < LTM (customer acquisition cost should be less than the lifetime value of the customer). While the equation isn’t particularly radical, it’s not something we hear from CPaaS providers or comms providers in general. Twilio believes it has the tools to unlock customer data to decrease CAC and increase LTM. In other words, it’s an example of how Twilio is shifting from comms to marketing. In other words, Twilio’s moving up the stack.
Mavenir CPaaS: Mavenir announced a CPaaS offering that combines API services with turnkey applications to allow CSPs to better deliver CX services. Mavenir CPaaS allows CSPs to leverage their network assets with new services, capitalize on trends like conversational commerce, and accelerate innovation and differentiation.
It seems that most providers are becoming CPaaS providers, and it doesn’t appear to be a particularly lucrative area. There is merit to offering some CPaaS capabilities for incremental and differentiated revenue. However, CPaaS continues to expand, and it’s going to take a lot to compete with the big players.
Most of Mavenir’s history is in mobility, but it appears to be pivoting toward the enterprise with CCaaS, CPaaS, and UCaaS with Crexendo. It is missing in action as the UCaaS sector moves closer to cellular providers with a new generation of mobility.
Talkdesk Designers: Two new additions to the low-code/no-code Talkdesk Builder suite are Automation Designer and Workspace Designer. The former is for building conversation flows, and the latter is for customizing the UI for different roles.
Deepgram: Likely as a result of its inclusion in the Innovation Showcase at Enterprise Connect 2018 for its voice-recognition solutions, Deepgram raised $47M in new funding, led by Madrona Venture Group with participation from Citi Ventures and Alkeon. An extension of Deepgram’s Series B that kicked off in February 2021, led by Tiger Global, it brings the startup’s total raised to $86M. Funds are intended to develop emotion detection, intent recognition, summarization, topic detection, translation, and redaction. Deepgram customers include Spotify and NASA.
The Innovation Showcase at EC23 is focused on collaboration re-imagined.
Owl Labs: Perhaps as a consolation prize for not being acquired, Owl Labs announced a $25M Series C and a strategic partnership with HP, bringing our company’s total funding to over $47 million. The funding round was led by HP Tech Ventures, the venture capital arm of HP Inc.
The Meeting Owl was a surprise success. It’s an AI-powered, 360-degree camera, microphone, and speaker that automatically zooms in on whoever’s speaking. Logitech and Neat have recently launched similar products for Microsoft Teams and Zoom. Presumably, HP and Poly will leverage the owl technology. As I wrote last month, I am not a fan of these center-of-room solutions, as I think they are too flagrant. I prefer invisible tech, and cameras in particular are getting smaller and more subtle.
NICE and AtlasRTX: NICE quietly acquired AtlasRTX. The AI-powered, multi-channel RTX platform for marketing, sales, and service teams is seven years old. The acquisition brings additional digital workforce tools to NICE’s conversational AI portfolio. No terms were disclosed.
Lumen and Colt: Lumen announced that it entered into an exclusive arrangement with Colt Technology Services for the proposed sale of Lumen’s EMEA business to Colt for $1.8B. The purchase price represents ~11x multiple on the EMEA business’s estimated 2021 adjusted EBITDA. Lumen is monetizing its non-strategic assets as its platform vision relies less on physical infrastructure. Lumen will retain access to these networks via a strategic partnership with Colt. The deal is expected to close in Q4 2023.
Evernote/Bending Spoons: I’ve been a loyal but unhappy customer of Evernote for some time. The company cracked the code on notetaking by inventing seamless device synchronization. But then Evernote passed its sell-by date and has stumbled for years. Like many others, I use a “legacy” version of Evernote, as the latest version feels like a downgrade.
Evernote was the trendsetter but hasn’t kept up. Since Evernote, we’ve seen free/useful note taking apps from Microsoft (OneNote), Google (Keep), and Apple (Notes). A new generation of apps offers more sophisticated capabilities, such as Obsidian, Notion, and Clickup. Personally, I’ve been considering Zoho Notes as a potential replacement for Evernote.
Although Evernote is not a communications comms application, I included it here because I always thought it should be. Note-taking and meetings go together. Evernote reports recurring revenue around $100M from millions of paying customers — many of which need UCaaS. I never understood why a UCaaS provider didn’t grab Evernote for its features and customer base. Microsoft built OneNote into its SfB Surface Hub experience. See: Evernote was acquired by the wrong company.
Zendesk Acquired: Zendesk announced the completion of its acquisition by an investor group led by Hellman & Friedman and Permira in an all-cash transaction that values the company at approximately $10.2B. Hellman & Friedman and Permira are the primary shareholders of Genesys. Zendesk launched a CCaaS service last year. The acquisition was previously announced in June. Under the terms of the merger agreement, Zendesk shareholders will receive $77.50 per share in cash.
This Month’s Goodreads
- Why we’re leaving the cloud We’ve seen all the cloud has to offer. Renting computers is (mostly) a bad deal for medium-sized companies like ours with stable growth.
- Cloud or on-prem? Companies flip-flop on workload decisions Nearly 9 in 10 of +1,700 IT leaders surveyed say their companies have brought cloud workloads back to their data center.
- How to slash carbon emissions while growing the economy +30 countries have already achieved “absolute decoupling” (reducing carbon emissions while continuing to grow economically). Teleworking is part of the solution.
- FTC brings action against CEO of alcohol delivery company over data breach The agency’s rare decision to single out the CEO signals a new approach to data security abuses.
- Amazon Clinic launches as a message-based virtual care service The message-based online healthcare service offers treatments for over 20 “common health conditions” such as allergies, dandruff, hair loss, birth control, erectile dysfunction, and acne.
- Was This $100 Billion Deal the Worst Merger Ever? The creative exit with Discovery minimized the loss to about $47B for AT&T shareholders.
- It would take a ‘catastrophic recession’ for tech spend to slow Technology spending is being used to offset inflationary pressures, including capital costs. The worst-case prediction is that spending would grow by 3% year-over-year.
- Meta Employees, Security Guards Fired for Hijacking User Accounts Meta has fired or disciplined more than two dozen employees and contractors over the last year whom it accused of improperly taking over user accounts, in some cases allegedly for bribes.
- Is 5G worth it? Consumer hype is over, and carriers worried 5G never made any sense. What we needed were lower costs and broader coverage. We got higher costs and reduced coverage.
- Someone has to say it: Voice assistants are not doing it for big tech Some estimated that the market for so-called “conversational commerce” would be worth $35 billion by 2020.
- AWS may be pulling ahead of Microsoft and Google in telecom AWS is taking an early lead against rivals Google Cloud and Microsoft in the hyperscaler race to capture market share among telecom network operators.
- A Peek Inside the FBI’s Unprecedented January 6 Geofence Dragnet Google provided investigators with location data for more than 5,000 devices as part of the federal investigation into the attack on the US Capitol.
- Idle Crypto Is the Devil’s Workshop FTX’s collapse had very little to do with either the characteristics of cryptocurrency in general or the specific features of the coins that FTX minted and distributed.
- ‘The Bezos Blueprint’ Review: Is Brevity the Soul of Success? Short sentences, written so an eighth-grader could understand. Turns out the secret to Amazon’s success isn’t logistical; it’s lexical.
- Leaked message from Slack CEO Stewart Butterfield describes shock over Bret Taylor's sudden departure from Salesforce “No way to spin this as a good thing, so I'm not going to try that."
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