In my last post, The Emerging Cloud Order, I covered the new ecosystem emerging around hosted communications. In terms of quantity, it is the service provider that is really taking off. Seems everyone and their brother is a service provider these days – and it is still growing.
Service providers go by different names. We used to call them phone companies or carriers. Then came Internet Telephone Service Provider (ITSP), but that’s too long. It doesn’t take much to be an SP – it isn’t as regulated as say a CLEC. Basically, it is just money and time – and the cost is dropping.
There are lots of different types of SPs offering hosted voice and/or UCaaS. On the huge side are big tier one carriers and cable operators. Many SPs are CLECs and Local exchanges. These firms tend to bundle hosted services with other offerings, particularly bandwidth. You don’t have to be a carrier to bundle bandwidth, some companies are virtual carriers and rebranding wholesale pipes (Mitel), and others are offering managed bandwidth as part of the hosted solution (ShoreTel Sky). The majority though don’t bundle bandwidth and go with an over the top (OTT) approach (8×8, Fonality, Simple Signal).
But that’s a traditional approach. I expect to see many kinds of SPs in the future. For example Oracle already offers a contact center, and now that they are moving into the cloud perhaps they will offer dial tone too. Skype has brought dialtone to Microsoft, and I expect wireless carriers to soon offer enhanced PBX-like features at some point.
Unlike various forms of dial tone and Centrex before – most SPs position themselves as national service providers. The local exchange is flat. I’ve heard estimates of 800 -1000 SPs operating in the US today. With no natural boundaries, that’s a lot of competition. This is forcing the business to change, and the go to market strategy requires more than an “open” sign.
I got together with some buds to discuss this market. I didn’t invite anySPs to participate. I wanted folks with direct experience and no current ties to discuss where they see the market going. Below is our conversation.
- Alex Doyle: Currently the director of SP Marketing at Polycom. Alex has been in this space for 20 years, and works closely with many of the leading Service Providers in the US today.
- Trent Johnson: Currently a co-founder at Hookflash, was one of the pioneers in hosted voice. He was co-founder and President of Shift Networks in the early 2000s blazing the trail for hosted VoIP services.
- Brooks Robinson: Currently co-founder and President of Springbot (ecommerce), and previously co-founder and President and CMO of Cbeyond which started as a CLEC, but moved into hosted services.
- Larry Lisser: Principal at Embrase Business Consulting that actively works with multiple SPs on their go to market strategies and practices.
Hope you enjoy the conversation. More to come. Clearly, the market is going to continue to change dramatically and very likely segregate into multiple markets serving different demographics.
See a prior hangout on WebRTC here.