It’s that time again, time for my longest post of the year – my annual report post.
You can see previous annual reports by modifying the year in the URL.
Let’s start with…
The Year in 24 Events
I will divide the events into three categories, the first being analyst events. Here, a vendor helps industry analysts better understand its vision and goals. It sounds easy, and it is when there’s a clear strategy that is driving activities throughout the organization. That’s usually not the case.
The analyst events I attended in 2019 were: Avaya Engage, ALE Connections, Cisco Collaboration, RingCentral (two events in 2019), Five9, Google Next, Fuze Flex, Glance, Huawei, Mitel, Poly, and Vonage.
The next event category is broader industry events. I attended three in 2019: Enterprise Connect, UCExpo, and Gitex. EC is easily the busiest week of the year. It’s actually kind of silly — so many meetings that it becomes a blur. It’s also a busy news week. For the past two years, I’ve turned EC into research notes.
UCExpo is relatively intimate — or at least it would be if it weren’t so noisy. It’s two days just outside of London. 2019 had great access to Cisco, RingCentral, and several companies I rarely see in the US. Gitex is a circus of an event. It is over-the-top in every regard. Avaya has invited me for the past several years, so most of my time is spent in their enormous two-story stand.
The last category is a catch-all for events or associations at customers, partners, or developers. I attended the Cloud Communications Alliance (West), Avaya Engage Asia, Avaya Dealer Council in Spain, Slack Spec, and IMCCA. I will also list here Genesys CX19, Twilio Signal, and Zoomtopia, which had light analyst tracks but were really aimed at a wider audience.
That’s 24 events in a year — a record I don’t intend to break. The good news is this year I made United 1K. Yes, it’s nice to have elite status, but I have to say the whole loyalty thing is a sham. United is actually making their program more honest in 2020 with status clearly tied to the amount spent. It’s a clear admission that it’s not how much you fly, but how much you spend.
Loyalty is not what the dictionary means. I’m not loyal to UA like a dog is to its owner. I’m caught in an evil game that’s impossible to win. There are brands that I am loyal to, and they don’t even reward me with a free drink.
I have mixed feelings regarding event venues. Like most people, I enjoy wonderful and exotic locations. I loved my first trip to Monaco for ALE (felt poor). Singapore and Dubai (for Avaya) are fantastic international cities. 2019 was also my first time back to Napa (Five9) since I was in college. Certainly, the international trips tend to be more memorable.
However, when you travel as much as I do, one appreciates simple trips (direct and short flights, major airports, and simple ground logistics). Glance and RingCentral hosted meetings at airport hotels, and I appreciated that. Genesys hosted their event (and next year’s too) in Denver!
I do believe that I attend more events than anyone in enterprise comms. Of course, the bigger firms attend more events, but they are people not a person. Zeus possibly attends as many or more events, but we cover different vendors and sectors. I probably see Blair more than any other analyst, and Irwin gets around too.
I don’t normally write about the events I did not attend — that would be a near-infinite list. However, I will mention a few that I really regret missing. I missed the Unify/Atos event for the first time in years. I love what they are doing with Google and Circuit. I try to hit Ribbon Perspectives every other year, but had to miss it this year. That’s probably ok as they will be a new company again after completing their current acquisition and naming a new CEO. I wanted to attend KazooCon because they always have such great content. October, as usual, had lots of conflicts. I had to miss the NTT coming-out party in London and the second Facebook Flow.
I continue to focus on Twitter. I tried Instagram, but lost interest (along with my silence on WhatsApp and Facebook, that makes me somewhat Facebookless). However, I do find Workplace intriguing. I increased my activity on LinkedIn this year. I don’t post much original content there, but do share content in a Twitter-like way. The engagement (on the same content) is very different between Twitter and LinkedIn.
I do enjoy the engagement the most on Twitter. I am ending 2019 with about 48,500 tweets (Twitter no longer shows the exact number). That means about 4,352 tweets in 2019, which is slightly lower than last year, but still 12+ a day. I do find it’s becoming harder to increase my followers. IMO Twitter was better when it was more open. Twitter has limited or revoked most APIs, and the ecosystem is dying. Twitter also has a ton of SPAM, more so than email (because open innovation results in good SPAM filters on email). I am ending 2019 with about 40,700 followers.
I posted 18 videos in 2019. That’s something I was just starting in 2018. The videos take (me) a lot more effort than it appears. I do kind of script them out, and then (for some reason) I attempt to do them in a single cut. Note, there’s a big difference between single cut and single take.
Just to make things even harder, I also try to do them at the event before I leave. After all, news is a dish best served fresh. That creates this ridiculous race with the clock (before a flight) as I organize my thoughts, get my questions answered, and find a place to record with a decent background, decent lighting, and not too much noise.
My video setup evolved this year. First, no more Bluetooth audio. As you might notice, I use a headset for my microphone. I learned the hard way that Bluetooth is highly susceptible to interference in crowded places (like show floors). I learned this from Poly, which was nice enough to donate a DECT model. It has worked really well, except in Dubai (I don’t think the US DECT frequencies are compatible in the UAE).
The other big change in video production was the move to traveling with a Chromebook instead of a PC. Overall, it’s been a good move, but it completely disrupted my video workflow. Unfortunately, it records videos in an odd (MKV) format that adds the extra step of format conversion. Also, the MKV player on the Chromebook has no concept of fast forward, so who has time for quality checks? What’s really odd is that my Gmail User ID records in MP3 on the same hardware.
As a content creator, I find it fascinating how each medium (posts, tweets, videos) reaches different people. I plan to continue making videos because of their reach and because the associated effort makes me a better analyst.
The Big Year-End Thoughts
Ok, enough of this drivel, let’s get to what’s important in enterprise communications.
This week, the year and decade end (some contest this). I guess as decades go, things were pretty good. I wasn’t impacted by war, famine, disease, or depression. Of course, I tend to focus on the negative, so let’s get to that.
My work-life really isn’t much different today than it was 10 years ago, making a decade of #FutureofWork mostly BS. There weren’t any breakout products in the past decade. I’m not one to Snapchat. I guess both Stripe and Square impacted payments, but not much else. Neither Oculus nor Magic Leap impacted the majority at large (not to mention Google Dream). I have no tolerance for Pinterest, Instagram, or TikTok. In terms of products, the breakout new category is home speakers which annoy me (I have one in my closet for weather checks). As much as I love watches, I don’t find any of the new smartwatches interesting — even the Apple Watch seems like a joke with a delayed laugh. I consider the smartwatches a flawed category, with Google as the poster child.
Probably, the most useful thing from the past decade is 4G/LTE, and everyone is in a rush to kill it.
There were some sensational fails. We had products that caught fire, such as the hoverboard and the Note 7. We had several ambitious phone failures (Microsoft Kin, Amazon’s Fire phone, Facebook Phone, Essential Phone, and Samsung Fold). There were mind-boggling business failures such as VW’s Dieselgate, Theranos, WeWork, and MoviePass.
I don’t think I’m the only one mourning the death of net neutrality, nor the only one shocked by the surveillance efforts revealed by Snowden. When The Guardian published NSA collecting phone records of millions of Verizon customers daily in 2013, we didn’t know it was the first of many bombshells coming from Snowden. It was a more innocent time. Most communications (voice, email, fax, SMS, etc.) were/are unencrypted. The use of encryption suggested the user had something to hide. So much has changed, yet there’s still a lot of ignorance about security.
In terms of enterprise comms, the most interesting development over the past decade is team messaging. Slack single-handedly (accidentally) created an entirely new category of collaboration. The company is now under tremendous pressure to remain a leader in the sector it created. There are some 30 companies trying to make a better Slack.
I will also give a hat tip to Workplace by Facebook, as it’s the first company that may deliver on fully connected enterprises.
Enough of This Decade Stuff, Let’s Get to Now
As we end 2019, what’s important? We all know that tech generally moves much faster than enterprise comms. But that gap is narrowing, in part because enterprise comms is becoming broader. It expanded from telephony to include messaging and video and didn’t stop. It’s shocking how many companies (many we have never heard of) describe themselves as “collaboration companies.”
Basically, our smartphones are always connected, open devices. Anyone can create or install an app that does communications. They don’t need big dev teams, they don’t have to build and distribute physical products, and they rarely have to seek CIO approval. Enterprise communications is becoming a long-tail industry — and the tail continues to grow.
Can You See Me Now?
“Can you hear me now?” was a catchphrase, courtesy of Verizon, for the previous decade. I suggest we consider “Can you see me now?” for this recently passed decade. There is no other topic within enterprise communications that has had more change, more development, and more news than video. Let’s look at some highlights:
- All four keynotes (Amazon, Cisco, Google, and Microsoft) at Enterprise Connect revolved around video.
- Highfive first, and then 8×8 are leading the race to zero.
- Zoom had an IPO that, in one day, made it more valuable than 8×8, Avaya, Mitel, and RingCentral COMBINED.
- New offers from Fuze, 8×8, and Vonage.
- Last month Microsoft announced mutual room system interoperability agreements with Cisco and Zoom.
- All year we heard AI-related announcements in video meetings: transcripts, captions, auto-framing, and noise mitigation, assistant, and more.
The Star Trekish universe of video arrived without fanfare. We are even ahead because our mobile devices (unlike Kirk’s Communicator) support video. Video is popping up in all kinds of apps and workflows: FaceTime, Messenger, Messages, and more. Telemedicine, finance, manufacturing, education — they are all heavily embracing video. Even the audio-centric podcast app that Evan and I use to record TalkingHeadz has video.
My most recent research note is on the video interop announcements by Microsoft, Cisco, and Zoom.
The Contact Center
The contact center space is very active, but still boring. There’s a tremendous amount of activity and innovation occurring, but change is slow. I just published my list of Top 10 Acquisitions for 2019, and six of them are in the contact center space.
The opportunity is huge, and the pieces are falling into place for major disruption:
- Organizations need to update how they engage with their customers.
- AI will enable new kinds of features and economics.
- Cloud-delivered services will enable new kinds of features and economics.
- The need for more context is driving new integrations.
- We are changing the way we build these highly customized solutions.
There is a huge gap between what the providers are preaching (engagement) and what customers are buying (cheap service). Most of the “innovation” in 2019 remains around omnichannel and AI. The industry is still optimized for dumb analog, 800 services even though most calls are from intelligent, multi-modal devices.
The future of the contact center is indeed bright. It will become far more contextual, intelligent, and proactive. The vendors and providers are actively building this. Until then, please hold.
Security and Privacy
The rise of security is both decade- and year-related. On the personal side, just about everything we do is ratting us out. Obviously our smartphones, but also our carriers, cars (and the DMV), televisions, credit cards, and even our doorbells are harvesting our data without our explicit knowledge or consent. We are at the intersection of software-delivered services, connected software, and personalization. Is there a correlation between listening and shopping habits? Ask GM.
On the enterprise front, the story is about protecting secrets and limiting liability. Protecting secrets is no easy task. Data is everywhere as are the hackers. Every month in 2019 there was news of another major security breach reminding us that no one is immune and that there’s value in the data. Even if the data doesn’t appear valuable, it can be sold back to its owner (ransomware attacks) because it’s usually valuable to the owner.
It was way back in January that Marriott announced that hackers stole passport and credit card information of up to 383M guests. In 2019 we also saw an all-time increase in ransomware attacks. Then there were the indictments regarding Russian interference (via social media) in the 2016 election. It was just last July that Capital One exposed 100M credit card applications, 140K social security numbers, and 80K bank account records. Facebook has probably done more to increase awareness of privacy than any other company.
We’ve been talking about digital transformation for years, and this is the unexpected consequence. When everything is digital, it’s hard to contain it. This realization creates doubt in what were trusted organizations. For example, I’m currently in the process of refinancing a mortgage, and they require a ton of information. My choice is to comply or not to refinance, but realistically, not only will they be hacked, but also their partners. I didn’t think this way before.
This feeling of helplessness is fueling an imminent rebellion. We have four things coming together: increased awareness, the precedent from GDPR that penalizes companies for poor security, the upcoming California Consumer Privacy Act, and political distrust. While only some American companies are paranoid about the US government, many are concerned about China. China has built its own Internet. Expect that trend to continue there, here, and everywhere in between.
It is clear that security plans are getting promoted from the bottom left drawer. Customers will be demanding more information and more control regarding security and privacy. Enterprise communications are right in the thick of it. That’s why I made security the theme for this year’s Innovation Showcase at Enterprise Connect 2020. Cisco just attacked Zoom on security — expect more claims as security becomes a key point of product/vendor differentiation.
It all adds up to zero, as in zero day, zero trust, and zero knowledge. I think this is going to be problematic for several companies that use customer data to create value. This includes many AI solutions and many cloud-delivered services such as MS Teams and Dropbox.
An Office Is a Terrible Place to Work
You can file remote work under the decade or year. Remote work seemed obvious to me when it started, but I underestimated resistance to change. It took a while to realize that the question “How do I know you are working if I can’t see you?” was inherently flawed. The retort is “How do you know if someone is working if you can see them?”
There were several high-profile rejections of teleworking that fueled the resistance fire. I loved that IBM was a presenter at the Fuze Flex event extolling the value of telework. Yahoo would have been there too if Marissa hadn’t destroyed it.
I think remote work is now mainstream. There’s no longer a negative stigma associated with it. A dog barking during a conference call is still disruptive but not embarrassing — we get it now. Remote work isn’t about pretending to be at the office. Remote work has benefits and disadvantages that we accept. The real irony is that we are now finding that remote workers are far more productive and loyal than traditional prisoners of offices. For some, it’s like learning tobacco is good for you.
Remote work is going to become even more important. The trend is for more distributed teams. Digital transformation continues to make remote work more feasible. Climate change is also a factor. More jobs that require a facility are becoming distributed (like call center agents). Enterprise comms vendors are adapting. For example, Workplace has a Safety Check that enables employees to check in after a major storm or regional disaster.
Will Teams Rule the World?
It didn’t get the attention I expected, but that’s probably because most rejected it. I’m talking about Gartner’s “strategic planning assumption” in its 2019 UCaaS Magic Quadrant: “By 2023, 40% of new enterprise telephone purchases will be based on a cloud office suite – either Microsoft Office 365 or Google G Suite.” It was nice of Gartner to include G Suite, but I think it’s safe to assume they are really talking about Office 365 (and Microsoft Teams).
It’s a fascinating and bold prediction, but I don’t agree with it. Perhaps that’s because I don’t fully understand it. What is a new purchase? These things were easier before recurring services. Are they saying that 40% of all new UCaaS prospects will choose MS Teams (or G Suite) for telephony or that MS Teams (and G Suite) will hold 40% of UCaaS market share in four years?
I don’t think it matters. Remember, we are 10 years into cloud and 20 years into VoIP, yet there’s still a ton of digital PBXs out there. I do believe that Microsoft is emerging as a dominant player, but it’s not due to features or innovation. Gartner presumably feels the bundle will win, and there’s strong evidence to support that conclusion. However, the power of O365 bundling may not apply here because UCaaS is an optional add-on.
Microsoft is having enough trouble getting its own SfB Server customers to accept Teams. And SfB has been (for all intents and purposes) abandoned. Meanwhile, many UCaaS offers are way ahead of Teams (in features, value, security, partnerships, integrations, and other categories). I will also point out that Gartner was very confident on SfB too — all the way up until Microsoft surprisingly pivoted away from it.
The issue really is commoditization. If all services (UCaaS, messaging, and meetings) are viewed the same, then the customer will choose the path of least resistance — which could indeed be a bundle. I know there are tremendous differences among products, but many customers do not.
There’s a massive number of transitions occurring in enterprise comms. Transitions occur very slowly. Consider that analog to digital (phones) took more than a decade to transition. Transitions are still slow, but now there are more of them. Let’s review some of the major transitions occurring in enterprise communications:
- Digital to IP
- Audio to visual
- Premises to Cloud
- Real-time to async (messaging)
- Video-first communications
- Desk to mobile
- Full-service to self-service
- Channel to direct back to channel
- Office to home
- Growth to profits
- Insecure to secure
- Static to contextual (AI)
- Proprietary/licensed to open
- 4G to 5G
That’s a lot of moving parts, and it’s getting worse. Cloud platforms and smartphones enable faster innovation. Another change to consider is vendor size. In the past, enterprise comms vendors were specialized and esoteric and outside of mainstream tech. Today, enterprise comms are influenced by the biggest and baddest technology vendors on the planet, such as FAANG (substitute Cisco for Netflix).
Will It Blend?
I think it’s pretty clear that the various enterprise comms silos are converging (Vonage saw this before me). UCaaS, CPaaS, CCaaS, and VaaS, as well as CRM and team chat/messaging are increasingly overlapping. It’s become common to see UCaaS providers expand into video and team chat. Expect more to launch CCaaS (and expect more CCaaS providers to launch UCaaS).
What’s New for TalkingPointz?
Whatever it is that I do is changing. Two years ago I completely stopped doing competitive intelligence. I primarily focus on understanding how each vendor I cover is different — what makes them unique. I saw a big increase in interest from Wall Street in 2019. By far, my most popular research note was on Avaya-RingCentral. When I wrote that report, I didn’t fully appreciate that both companies are public. I intend to revise that one as the dust settles, probably in the spring (there were a lot of unknowns, particularly around implementation).
I’ve also seen a lot more interest in M&A in 2019. The industry is becoming so broad that the scales are tipping toward buy in the build vs buy debate. The vendors are also responding to this trend by making their solutions more customizable (8×8/Wavecell, Vonage/Over.ai/Nexmo, Five9/Whendu, etc.).
Evan and I continue to have a blast with the TalkingHeadz podcast. Please subscribe if you haven’t already (you can subscribe on most podcast apps).
The TalkingPointz subscriptions have been steadily growing, and I intend to promote it more in 2020. I am also looking at updating the website. Today, the newsletters are not on the website at all. I intend to bring these things together — effectively TalkingPointz is getting a new paywall. That and my newsletter are a necessary adaptation as blogs are changing.
With all that, I bid you adieu, and of course… Happy 2020!