Dave Michels
Dave Michels is a Principal Analyst at TalkingPointz. His unique perspective on unified communications comes from a career involving telecommunications...
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Dave Michels | December 16, 2013 |


Analyzing Trends in Hosted UC

Analyzing Trends in Hosted UC Cloud is much more than putting a product into a data center with per-seat per-month invoicing. The long game will go to providers that actively drive service adoption and utilization.

Cloud is much more than putting a product into a data center with per-seat per-month invoicing. The long game will go to providers that actively drive service adoption and utilization.

Google recently changed how it treats photos in Gmail. The announcement said "you'll never have to press that pesky 'display images below' link again." While we may wonder how many people click that link, Google doesn't wonder. It knows precisely.

This post is not about Gmail. It's about how cloud services are redefining product management. Among leading cloud services, most are often nothing more than a hosted product. But there's more to the modern cloud than the service element. The real cloud transformation is the new direct relationship its vendors establish with end users.

Think back to how traditional newspaper editors relied on judgment and experience to determine which stories to run. Today's online publishers know exactly what their users are reading, and what they want to read (via search). The assumption is that the tighter relationship between the vendor and its customers provides better services, with more active and loyal customers.

UC vendors do not typically have relationships with end users. The vendors create the solutions and then it is up to the channel partners to manage customer relationships including sales, implementation and support. This indirect model is common across many other industries, including automobiles and electronics. However, hosted services are rapidly making such indirect relationships obsolete.

The direct relationship is not necessarily at the expense of the channel, which can still play a critical role in the go-to-market strategy and support. The difference is that the vendors now have direct visibility into customer usage. Savvy providers use this information to improve services, with the goal of driving increased adoption and consumption. Cloud services that do not increase consumption and adoption wither.

Consider what Google can ascertain about its Gmail customers. It can determine behaviors like inbox management styles, frequency, time-of-use patterns, and desktop vs. mobile client usage. It can determine which features never get used, which get used the most, and what topics are queried the most for help. Google knows the consumption profile of its power users. That's considerably more information than traditional product vendors get, and it is an advantage when it comes to increasing the value of the service.

We know firms like Google, Facebook, Netflix, Salesforce, and Apple rely heavily on analytics to drive their product roadmaps, but can the approach apply to hosted UC services? The answer is, of course, but the sector is not as mature. Today, UCaaS providers are experiencing rapid growth without such analytics. Hosted UC has practically become table stakes for CLECs, and additional providers continue to emerge. However, the sector will mature and runs the risk of saturation and commoditization.

Usage analytics can provide a defense against commoditization. Savvy cloud providers are leveraging what they know about their customers to drive utilization. In a recent keynote presentation, Ken Rudin Director of Analytics at Facebook, revealed that every product team at Facebook now includes analysts alongside engineers, product managers, and designers. Facebook tracks usage, and Rudin said analysts are responsible for driving desired behaviors--not just reporting behaviors or making suggestions.

Several UCaaS firms are making analytics a priority today. 8x8 uses Hadoop to gather metrics on every call, to actively monitor network performance and trends. It also gathers information on feature usage to identify unused or confusing areas. This is similar to how e-commerce sites improve services by studying abandoned shopping carts.

Analytics also reveal interesting usage patterns for the end users. Thinking Phone Networks offers access to its analytics capabilities as a core customer feature. David Powers at Thinking Phone said that, "Once customers complete their onboarding and training, they rapidly engage in the analytics features to track behaviors and usage." Thinking Phone offers several usage reports that customers can, and do, customize.

Thinking Phone recently completed an educational campaign with regard to the benefits and use cases of its ThinkingMobile application. The campaign did increase client sales, but was deemed a success primarily because of the resultant increase in actual usage of the client.

Another example is ShoreTel Sky, which displays a Live Answer score in its user portal. This indicates the percentage of incoming calls that get answered versus those that go straight to voice mail. Just making such a measurement visible tends to improve it. ShoreTel Sky recently exhibited at Dreamforce because Sky's analytics reveals the popularity of Salesforce among its Sky customers. ShoreTel prioritizes Salesforce APIs and integrations.

Another example of the direct customer relationship is the help button on ShoreTel Sky phones, which offers one-touch to support--an approach reinforced during the Dreamforce keynote when CEO Marc Benioff said "I think every product should have a Mayday button," a reference to the online video help button that Amazon provided on its recent Kindle release.

The shift to cloud is much more than taking a product and putting it into a data center with per-seat per-month invoicing. The long game will go to the cloud providers that actively drive service adoption and utilization. The providers that are not driving adoption will see customer defections to those that do as the sector matures.

Dave Michels is a Contributing Editor and Analyst at TalkingPointz

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