Unified Communications and Video in the Cloud: Bye Bye Telco of Yesterday

For about a thousand years telecommunications companies have relied on analog wires connected through the land to dominate and capitalize on humans’ desire to speak to each other. The fact that few rarely have anything worth hearing is not the point.

Since 1940, Telcos have enjoyed massive success.

The cloud is about to either radically change that, or radically change the telco.

When the cable guys came out with IP phone services to your house at 1/5th the cost of your standard land line, the Telcos fought it (of course). Now all of your phone service is IP, whether you know it or not, or whether you still use your Telco for it or not.

The Telco survived because it adapted to a new reality (And because humans are lazy).

Since the dawn of the Cloud Era (you know, way back in 2008ish), I’ve been trying to figure out how the monolith organizations such as Telcos were going to play in this transformative era. At first they did what they always do — “Oh, a shiny new business opportunity, we’ll do it too!” — they put up infrastructure as a service (Telcos are the equivalent of the “channel” historically for infrastructure vendors – and got “stuffed” with gear in the exact same way.  Now they are trying to find a means – any means – to get someone to use that capacity). Then they started offering some kind of services themselves – backup has been a popular one, though since Telcos don’t speak that language, they tend to languish or focus (rightfully) on consumers.

But what is a Telco? A telco is a communications infrastructure provider – who happens to have the most important thing required in this transformation – a direct customer billing relationship.

Now that all Telcos – and all enterprises – have adopted IP-based telephony, the stage has been set for the next wave — which will be complete cloud-based unified communications (including video) services.

Telcos will have to adapt to providing these services in order to retain their value over the next 10 years, or they will be relegated to being bandwidth brokers alone.

Enterprises will want to outsource ALL of their complex UC/Video needs the exact same way they outsourced their complex CRM needs. As a matter of fact, this is exactly the kind of value added next generation service SalesForce should be providing – since the whole point of “unified” now means “integrated” and SalesForce is the integration platform of choice for most businesses.

SalesForce won the CRM war not because it taught the market to want CRM – it won because the market wanted CRM but no one delivered it in the way buyers wanted to consume it – until SalesForce. Make it simple and give it to me as a service. That’s how people want to consume complex infrastructural/core stuff. Unified communications and video are the exact same thing.

So, there is no SalesForce for UC – yet. This is why Telcos have to get their shit together here, lest they miss out on a massive global movement yet again.

The arms dealers will be interesting to watch evolve. It’s still way early, but Microsoft has a play – and they sure have a cloud initiative. IBM has the cloud, but not a play yet. Dell and HParen’t doing anything that I can see. People like Polycom will be interesting to watch. Ciscomade a big bet here long ago – and is doing quite well (although until they or a partner deliver it as a cloud service, they will have the same problems as Siebel did early on with CRM – way too complex and expensive for a normal company to deal with)

The existing arms supplier to the Telcos for IP Telephony version 1.0 is Broadsoft, but Telcos are mumbling that they don’t have the chops to be there for version 2.0. Thus far, while there are a few contenders, the one I’d bet on is Thinking Phone Networks in Cambridge, MA. Little, but they seem to have all the right parts, people (CEO is a continuous home run hitter), and are built for the cloud. They have very large, very global players cruising in and out of the peoples’ republic of Cambridge as of late, and I know of at least one multinational global conglomerate OEM deal about to happen. I don’t know enough about the others (yet) to be able to tell who has a legit chance or not. This is a new space for me, but one I do find fascinating.

My point isn’t to call the winner, my point is to call the next market in this space. Just like the big banks said “no one will ever buy stock online” or the Telcos said “no one will ever use an internet phone system” (How are Nortel and Avaya doing these days?), both have evolved WAY beyond from what could be – to what should be. We don’t want to own and manage PBXs anymore then we want to run our own power plants. It’s a natural cloud-based service.

My data of record is in the cloud on salesforce – connected/integrated seamlessly with my communications – and none of it sits on my site. I rent what I need when I need it.

It’s the reason I now run Apple everywhere in my life. It just works. And that’s how all this stuff is supposed to be.

by Steve Duplessie


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