Growth In Hosted UCaaS and IP Telephony Not Limited To Big Providers

Frost & Sullivan has recently updated their North American Hosted IP Telephony and UCaaS Market, Forecast to 2023.  The news continues to be positive. The report shows that we can expect to continue on the current growth trajectory through 2023. In 2016, the market experienced healthy growth of 32.1 percent in terms of installed users and 30.6 percent in terms of revenue (without access).

Continued Growth Forecast

“Growing customer demand for more flexible technology consumption models to support digital transformation projects represents a key growth driver. Premises-based communications solutions reaching end of life and increasing availability of compelling UCaaS offerings are also encouraging the move to cloud communications.”

Not Limited To Big Providers

The other good news is that this growth is not limited to only a few big providers.

“Currently, the market is relatively untapped and can support a large number of providers with a diverse background and skill set. As the market matures, highly diversified telecommunications companies and software-as-a-service (SaaS) providers are likely to dominate the market,” said Frost & Sullivan Digital Transformation Vice President Elka Popova.

The report states that such issues as security, control, and more flexible customization will be important drivers as companies continue to move away from premise-based systems. Bigger providers must deliver a more “cookie-cutter” solution in order to maintain scale. This is the antithesis of what customers are looking for.

We believe that a local provider (backed by an outstanding white label partner like SkySwitch)  is best positioned to deliver the customized solutions that many companies are looking for.

North American Hosted IP Telephony and UCaaS Market, Forecast to 2023 InfoGraphic

SkySwitch Featured In Telecom Reseller Podcast

Jayson Jones, Executive Vice-President of Business Development at SkySwitch was recently featured in a podcast with Douglas Green, Editor & Publisher of Telecom Reseller. In the podcast, Jayson discusses the recent expansion of the SkySwitch network, the Active-Active architecture that is used to deliver high-availability and the impact of the new Las Vegas geo-node on load balancing and network capacity.  They also follow-up on an earlier podcast that featured a discussion about the integration between SkySwitch and the Amazon Echo/Alexa products.

Jayson also explains the SkySwitch business model and how white label UCaaS providers realize significant benefits when they place their customers and VoIP traffic with SkySwitch.

You can listen to or download the podcast from this link.


SkySwitch Announces Network Expansion


Turn-up of Las Vegas Geo-Node Increases Network Capacity By More Than Twenty-Five Percent

SkySwitch, provider of the ultimate white label platform for hosted telecom resellers, announced a new West Coast point-of-presence today with the availability of their new Las Vegas geo-node. This is the fourth geo-node in the SkySwitch network, adding to the current locations in New York, Dallas, and Minnesota. This node increases network capacity by more than twenty-five percent and provides added flexibility in managing network load.

“While other white label providers are struggling with capacity and reliability issues, this expansion shows that SkySwitch is able to continue meeting the demands of its fast growing base of users,” said Eric Hernaez, Founder and President of SkySwitch.

SkySwitch provides service from geographically diverse locations in order to maximize system resiliency. The new geo-node was introduced without interruption to ongoing operations because the system was designed to expand on the fly. New geo-nodes can be joined to the network, and new server resources can be added to any geo-node, in a way that’s transparent to end users.

In addition to easing network growth, this system architecture has allowed SkySwitch to maintain industry-leading uptime. Unlike other high-availability redundancy schemes, that rely on a primary and failover system, the SkySwitch system is Always Available. That means that SkySwitch provides identical service across multiple nodes in real-time. With seamless and transparent failover between nodes, service disruptions are avoided because customer connections can be automatically transferred to any nodes available in the event of trouble.

SkySwitch chose to deploy the new geo-node at The Lone Mountain Data Center, operated by viawest. The data center, a best-in-class, carrier-neutral facility that received Tier 3 certification by the Uptime Institute, allows SkySwitch to deliver the reliability and stability demanded by its resellers.

“SkySwitch is well positioned to continue the triple-digit growth we have seen in the past twelve months,” concluded Hernaez. “The geographic diversity and ease with which we can increase capacity help to ensure our customers that they do not have to worry about the type of growth related problems that have ensnared other providers in this industry.”

About SkySwitch
SkySwitch ( is a US-based, next-generation communications platform provider. SkySwitch delivers a comprehensive white label communication service and back office support to our resellers. This enables our resellers – communication, telecom, IT service providers – to offer a branded, cloud-based, Hosted PBX Service and unified communications and collaboration services (UCCaaS) to their subscribers without the requirement to invest in or manage the platform from which the service is offered. The SkySwitch platform includes not only the infrastructure to deliver feature rich voice, video, text and fax communications, but also all operational and business support systems necessary for a reseller to experience rapid growth and profitability. This includes billing, carrier services, DID porting services, and regulatory compliance.


The Death Rattle Of On-Premise Telecom

For the past three days, every analyst, pundit, and blogger has been putting their own spin on Cisco’s acquisition of BroadSoft.

It’s about Consolidation

Some are saying that the biggest impact will be fewer available customers due to consolidation.  Others say there will be new opportunity, because many companies (particularly enterprises) have gone to BroadSoft because they did not want to use Cisco or Microsoft.

It’s about Cisco Spark  

Art Schoeller, vice president and principal analyst at Forrester Research has another take. He believes this is all about getting traction for Cisco Spark. “It’s as if the train had already left the station [for Cisco]. Nine times out of ten, BroadSoft was what I call the ‘weapons merchant,’ the white-label solution for many Tier 1 carriers … it’s cloud, multi-tenant, and BroadSoft has already worked through the economic model of working with a partner ecosystem that’s driving subscription solutions, not premise[s] solutions. So, Cisco is trying to get traction in the market for its multi-tenant solution, i.e. Spark and the future of Spark … the channel says, ‘I’ve already got one, BroadSoft.’”

It’s about Buying Access To Telcos

Rob Salvagno, head of Cisco’s M&A and venture investment team, wrote that Cisco chose BroadSoft not only for its portfolio of cloud collaboration platforms and business applications – assets Cisco already holds – but for BroadSoft’s partnerships with more than 450 telecom carriers in 80 countries, including 25 of the top 30 globally, and some 19 million BroadSoft business subscribers. This is simply Cisco’s way of getting a stronger foothold in selling products to big telecos.

It’s about Buying Talent

Lorna Garey at Channel Partners writes, “Scooping up BroadSoft also demonstrates that there’s a shortage of IT talent — and Cisco is recognizing it.”

It’s about the End of the On-Prem World

For those of us in the trenches selling UCaaS, I’ll go with this statement from Drew Lydeck, co-founder and president of Avant Communications, “This is the biggest validation that we’ve seen that the on-prem world is officially over. Cisco’s acquisition of BroadSoft is also a validation that everything is moving to a software-defined, subscription-based economy.”  This is particularly true when you consider that BroadSoft can be used to displace the premise-based Cisco Call Manager.

You can see from our last blog post that the UCassS market is still growing. There are still plenty of customers, both SMB and Enterprise, whose next phone system will be cloud-based.  They will want to buy the service from a provider that can give them the customized service and support that only a local reseller can give them.

Lots of Room for Revenue in UCaaS

According to Synergy Research Group, the UCaaS market continues to grow in the US at an astounding 29% a year.  Retail UCaaS services account for well over 80% of the total market. The UCaaS market is now generating revenues exceeding $400 million per quarter and approaching $2 billion annually.

While the big guys like Ring Central, 8×8, Mitel, Broadsoft, and Vonage continue to duke it out at the top, there is plenty of market share available for those resellers who deliver a more personalized service to businesses in their local area. This is particularly true as smaller businesses, who have little or no dedicated IT personnel, migrate to UCaaS and Hosted PBX. This is becoming an under-served market as market leaders move to serving larger businesses and enterprises.

“UCaaS continues to provide a richer and more cost effective collaborative communication system for businesses globally,” said Jeremy Duke, Synergy Research Group’s founder and Chief Analyst. “We are also seeing an up-market acceleration of UCaaS adoption, moving from serving mostly smaller sized organizations now to gaining traction in businesses of over 100 seats and over 1,000 seats. Given that the displacement of premise PBXs remains low today, there is ample ground for UCaaS to find strong growth in displacing these legacy systems over a long stretch of time.”

Mitel Plays Catch-up With The Acquisition of Toshiba Corporation’s Unified Communications Business

Way back in March we first heard about the demise of the Toshiba Telecommunications Systems Division and wrote a blog post about it. A Memorandum of Understanding between Mitel and Toshiba stating that Mitel would acquire certain assets, inventory and support obligations from Toshiba Corporation’s Unified Communications business was signed two months later. After another twoTmonth wait, the deal is finally done.  Toshiba resellers now get to hitch their wagon to yet another dinosaur of telecom. These old-guard companies are trying hang on to any business they can.

You cannot rely on any partner 100%

I’m sure that many Toshiba resellers have been using the “wait and see” approach to this news and merger.  That has been four months of uncertainty and doubt.  This is exactly why you need a back-up provider when offering white label service.  Whether you are reselling service from a large established partner, or you are reselling service from one of the newer UCaaS providers, you never know when disaster will strike. Your partner may disappear, either permanently or for an extended outage.  You must have a back-up provider with a migration plan in place. Otherwise, someone else’s disaster may quickly become your demise.

Bigger is not always better

We have seen the many of the largest players in premise and hosted telecom undergo major changes.  Some of them have declared bankruptcy and disappear completely. Mergers and acquisitions have swallowed others. When searching for a White Label Partner (either as a primary or secondary provider) don’t be afraid of smaller providers. They often have substantial advantages over some of the more familiar UCaaS providers. Newer providers were founded, designed, and implemented to provide these kinds of hosted services. They are not dealing with legacy business models, customers, or infrastructure. 

When it’s time to find a new white label partner for your hosted telecom or UCaaS business, we would love to show you the SkySwitch Platform.  Schedule a Demo Today!

The Zero Refresh Cycle – The Unique Differentiator of Hosted PBX For Which There Is No Defense

It’s no secret that premise-based telephone systems and PBXs are going away. Even so, old habits die hard and it can still be a challenge to get some corporate types and business owners to give up on their old phone systems and make the leap to a hosted solution. Up selling the zero refresh cycle of a hosted PBX may be key to closing the deal.

There are many reasons why they stick with aging systems. They don’t want to risk any interruption in their business operations that may come with new technology deployment. They have capital budget, so they would rather use it to make incremental changes, expansions, and upgrades to the existing system. It could just be a case of “better the devil you know then the one you don’t”

Convince these laggards that the time to change is now.

In the 1984 movie “The Karate Kid” Mr. Miagi is seen performing a martial art move called “The Crane Technique.” Daniel asks, “Does it Work?” Miagi replies, “If Do Right, No Can Defense.”

The Crane Technique For Selling Hosted PBX

When presented properly, I believe that the Zero Refresh Cycle argument may be “The Crane Technique” of closing a deal for a hosted PBX. One thing any company cannot allow to happen is to be left behind technologically. In the past most phone systems were kept in service at least 10 years. How do you move someone who is planning to purchase premise based to a hosted solution. Remind them what did not existing 10 years ago when they purchased their current PBX: Smart Phones, Google Maps, Chat Bots, Cloud Storage, WebRTC, and more are all technologies that a PBX/Communications System should integrate with in order to smooth communications and provide outstanding customer service. We can’t even imagine the technology that our PBX/Communications system may have to integrate with in the next 10 years.

To be left behind technologically is to risk being put out of business.

Perhaps this is the most compelling reason for moving to a hosted solution. The hosted provider must make sure that the platform always has the most up-to-date and integrated feature set. That way, letting left behind technologically becomes a non-issue for the businesses that utilize the service. As a result, your clients can stay focused on their core business. They never need to worry about what technology their competitors are using that can put them out of business.

PS: There is no good word in the English language that means “For Which There Is No Defense”

Makeup your mind Avaya – Hardware or Software

Back in January, Avaya filed for Chapter 11 bankruptcy.  When asked why, their Corporate Treasure, John Sullivan explained that after examining their debt “we decided it was a critical next step in our transformation from a hardware company to a software and services company and the best path forward for our customers, partners and employees.”

Guys…Phones are hardware!

They shed some significant assets in March with the sale of their networking business to Extreme Networks but basically, it has been all quite in the newsroom regarding their aforementioned transformation.  That is until May 31, when they announced their foray into a NEW market.  And what is that exciting new venture…SIP Phones!  YAY!  Psst…Guys…Phones are hardware, not “software and services.”

Avaya Vantage Device

Avaya + BroadSoft?

What is even more odd is that the press release says that these phones are being offered in collaboration with and tested for interoperability with BroadSoft.  And BroadSoft has had a campaign in place for a number of months offering Avaya customers a smooth migration from premise-based solutions to a cloud solution.  Is this just BroadSoft taking advantage of Avaya’s lack of foresight? Is Avaya just trying to hold on to any piece of the business they can? Perhaps this a prelude to these two companies eventually becoming one.

Whatever the real plan or outcome is, Avaya was late to the game realizing that premise-based systems are going away.  Many other hardware companies are in the same boat, creating a huge opportunity for agents and white label resellers of hosted services.   All of these companies customers are (or soon will be) available as premise systems age into obsolescence.  Companies need a communications system and hosted is the way of the future.

BroadSoft Eats Its Own: The Death of the Channel?

BroadSoft just announce the commercial release of their Platform-as-a-Service (PaaS) product. They are now one more in a long line of hardware vendors that have turned on their channel by going into the very service business that their products enable. In short, BroadSoft is now in competition with the very customers that have purchased BroadSoft products in the past.

This Has Happened Before

This is not the first time this has happened. Nearly a decade ago, Digium acquired SwitchVox in a similar move. For those not familiar with that transaction, Digium is “the benevolent caretaker” of the Asterisk project. Asterisk delivers an Open Source IP-PBX. Digium provides Asterisk Training and Certification, as well as all the “surround stuff” (PSTN Interface Cards, IP-Phones, Gateways, etc.) that someone who wants to deploy Asterisk would need. They have built a large and loyal channel of people who sell, deploy, and service IP-PBX’s built from the Asterisk project. SwitchVox is a commercially deployed IP-PBX built from Asterisk. It significantly extends Asterisk by adding integrations such as UC Functions, a Graphic User Interface, and screen pops and integration with a number of popular CRM products. So with the acquisition of SwitchVox, Digium became the owner of a product that was directly competitive with the channel partners they supported.

Sangoma (a competitor of Digium) made a similar move a little over two years ago, when they purchased PBXact (a competitor of SwitchVox). So just like Digium, they became competitive with the resellers that are part of their channel.

Who Does It Help, Who Does It Hurt

It hard to know if and who the implementation of this strategy benefits and hurts. Ten years later, Digium and SwitchVox are still going strong. Sangoma’s stock price has more than doubled since their acquisition of PBXact . But who really knows how many of their partners were driven out of business by these moves.

So now BroadSoft embarks down the path of Eating Is Own Channel. Peter Radizenski at Rad-Info recently quoted an BSFT client, “BSFT will force every customer to be on their cloud platform at some point.” He also added a comment to a recent LinkedIn thread on the subject, “it would be better for all if BSFT wasn’t competing with its own customers and selling direct to users at $15 per seat. That smells of desperation.”

Fighting the Trend

If you are a White Label Provider of a service, you need to make sure you provide something more than simply basic service.  You must be ready to deal with the day when someone else, or even your once trusted partner, decides to try and take your business by simply undercutting you on price. To combat this, you should develop specialized knowledge of how your customer does business within their vertical.  You can also enhance the basic service with specialized API integration or provide additional services from other partners.  Simply developing a solid and trusted business relationship with your customer can protect your revenue stream.  With these tactics, you can help to ensure your success, even in the face of ongoing downward price pressure.

UCCaaS Goes Vertical

In a new report from the Frost & Sullivan Digital Transformation Team, they stated that leveraging workflow integration will present opportunities and challenges for players providing Unified Communications and Collaboration (UCC) services. For white label resellers of Hosted PBX and Unified Communications as a Service, this means you can create more opportunity by leveraging your understanding of your clients’ businesses, rather than focusing on just delivering a horizontal solution that focuses only on technology and service delivery.

This happens at two layers: technical and non-technical

In the non-technical area, you can tailor your solution based on how your client likes to do business and their comfort level with technology.  Do they want (or require) on-site training, interactive video training, or will having access to recorded training sessions be a better fit for they work?  What billing cycle and terms work best for them?  Understanding their level of technical sophistication and recommending the correct phones can go a long way to building trust and user acceptance of the solution.  Do they currently do business on their mobile phones, or will offering this option just complicate and confuse users?

Over in the technical area, you can develop a deep understanding of how they do business and integrate your offering into their workflows.  This is where the Frost & Sullivan 2017 Global UCC Industry Outlook report mentioned above says there is opportunity.  To achieve this level of integration, any white label service you resell will have to have be standards-based with an open API that allows easy access to the inner workings of the platform.

The SkySwitch Open API has already been used to create complete call center solutions for companies such as My Pillow.  Others have used the API to create an interface to Amazon Alexa to create a UCC Digital Assistant.

By using these tools to create a solution that is tailored to your customers’ needs, you can create an environment of uninterrupted productivity, agile business operations and outstanding performance efficiency.  When you deliver all this, you become the solution that your client cannot live without.

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