SHARE



ABOUT THE AUTHOR


Dave Michels
Dave Michels is a Principal Analyst at TalkingPointz. His unique perspective on unified communications comes from a career involving telecommunications...
Read Full Bio >>
SHARE



Dave Michels | January 21, 2016 |

 
   

Free UCaaS?

Free UCaaS? I have plenty of reasons to think providers may one day offer UC as a freemium service.

I have plenty of reasons to think providers may one day offer UC as a freemium service.

To the best of my knowledge, you can't get UCaaS for free -- yet. While UCaaS providers could create the underlying service using free technologies such as Asterisk, WebRTC, and Internet Relay Chat, none to date has built a freemium UCaaS offer aimed at businesses.

Blasphemous concept? Consider the following trends:

  1. Business-oriented freemium services, including audio (freeconference.com) and video (zoom.us) conferencing, are on the rise.
  2. The cost of telephony continues to drop. Google Voice offers free U.S. PSTN calling, and Skype runs about $0.023/minute.
  3. Providers could easily monetize free UCaaS via paid upgrades (freemium), advertising, or both.

The four general approaches to delivering a free product or service are:

  1. Cross-subsidy (Black Friday deals)
  2. Third-party pays (Facebook)
  3. Gift economy (Wikipedia)
  4. Freemium

The fourth -- and newest -- model is largely made possible by attractive cloud economics (see my related post, Freemium or Your Money Back).

Giving away a viable service as a business practice is counterintuitive, but the cost of selling products is not trivial. Freemium can be a cost-effective way of building a customer base. Any go-to-market strategy involves various costs associated with sales and service, marketing, and demand generation. Only about 30% of the price that a customer pays for a premises-based UC solution goes to the manufacturer.

Instead of that traditional approach, providers can host free services, and then upsell their subscribers into paying customers. IBM, MIcrosoft, Cisco, and many others now offer freemium, business-oriented services.

One of the harder parts to making freemium work is determining where to draw the boundary between free and paid services. However, UCaaS is a naturally stratified service. If providers offered the base level for free, they may find enough opportunity to create a sustainable service.

With many of the hard costs (PSTN access and long distance) and actual usage declining, the concept of freemium UCaaS may be more feasible than ever. I can foresee a free, entry-level service that offers limited features with restricted minutes. Upgraded options could include endpoints, advanced features, conferencing services, and advanced applications such as contact center. The business customer would have a comprehensive service, but only pay for features as truly needed.

portable
Here's an example of how Zoom has incorporated a freemium service in its pricing model.

Providers also could supplement the freemium model with third-party advertising. They could even offer an ad-free option as one of the upgraded features. In addition to normal in-app advertising, an advantage UCaaS providers have is they can display ads on a desktop phone as well as append them to voice messages.

Highly targeted advertising can be very lucrative, and UCaaS providers are in a unique position to discover a lot about customers. The UCaaS provider could identify keywords from spoken conversations. For example, travel agents and hoteliers might want to target business customers discussing a "trip" or upcoming "travel."

The UCaaS provider knows who and where you are, as well as who and where business relationships are located. It can obtain further profile information by analyzing voicemail and instant messages, plus an app (especially on a mobile device) could access email, GPS, contacts, and calendar details. While some may consider this to be a violation of privacy, it's a common practice with consumer services such as with Gmail and Facebook. I suspect many business owners will accept this deal if the technology is fully automated.

Many UC and UCaaS providers are looking to provide more contextual awareness as a feature. Maybe the real business model is to provide contextual awareness as an advertising hook. A UCaaS provider is in a great position to analyze customers for interests and opportunities.

I see plenty of indicators that free UCaaS could be viable... and inevitable.

Join me at Enterprise Connect 2016, March 7 to 10 in Orlando, Fla., where I'll be moderating the sessions "Contextual Communications: Coming of Age at Last?" and "The API Ecosystem: Getting What You Need" and overseeing the Innovation Showcase on mobility. Register now using the code NJPOST to receive $200 off the current conference price.

Dave Michels is a contributing editor and analyst at TalkingPointz.

Follow Dave Michels on Twitter and Google+!
@DaveMichels
Dave Michels on Google+





COMMENTS



Enterprise Connect Orlando 2018
March 12-15 | Orlando, FL

Connect with the Entire Enterprise Communications & Collaboration Ecosystem


Stay Up-to-Date: Hear industry visionaries in Keynotes and General Sessions delivering the latest insight on UC, mobility, collaboration and cloud

Grow Your Network: Connect with the largest gathering of enterprise IT and business leaders and influencers

Learn From Industry Leaders: Attend a full range of Conference Sessions, Free Programs and Special Events

Evaluate All Your Options: Engage with 190+ of the leading equipment, software and service providers

Have Fun! Mingle with sponsors, exhibitors, attendees, guest speakers and industry players during evening receptions

Register now with code NOJITTEREB to save $200 Off Advance Rates or get a FREE Expo Pass!

December 13, 2017

The two major vendors in the Unified Communications space, Cisco and Microsoft, are both strongly promoting their cloud UC deployments. If cloud UC is on your enterprises roadmap, but you dont want

November 29, 2017

As video conferencing use rises in the enterprise, businesses are looking for ways to bring this technology out of traditional conference room and make it more broadly accessible. That's made the h

November 1, 2017

Your customers (internal and external) demand that you offer them the ability to connect by any means. With the adoption of cloud communications tools you now have access to an expanded portfolio o

November 30, 2017
With a ruling on the FCC's proposed order to dismantle the Open Internet Order expected this month, communications technology attorney Martha Buyer walks us through what's at stake.
October 23, 2017
Wondering which Office 365 collaboration tool to use when? Get quick pointers from CBT Nuggets instructor Simona Millham.
September 22, 2017
In this podcast, we explore the future of work with Robert Brown, AVP of the Cognizant Center for the Future of Work, who helps us answer the question, "What do we do when machines do everything?"
September 8, 2017
Greg Collins, a technology analyst and strategist with Exact Ventures, delivers a status report on 5G implementation plans and tells enterprises why they shouldn't wait to move ahead on potential use ....
August 25, 2017
Find out what business considerations are driving the SIP trunking market today, and learn a bit about how satisfied enterprises are with their providers. We talk with John Malone, president of The Ea....
August 16, 2017
World Vision U.S. is finding lots of goodness in RingCentral's cloud communications service, but as Randy Boyd, infrastructure architect at the global humanitarian nonprofit, tells us, he and his team....
August 11, 2017
Alicia Gee, director of unified communications at Sutter Physician Services, oversees the technical team supporting a 1,000-agent contact center running on Genesys PureConnect. She catches us up on th....
August 4, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, has lately been working on integrating enterprise communications into Internet of Things ecosystems. He shares examples and off....
July 27, 2017
Industry watcher Elka Popova, a Frost & Sullivan program director, shares her perspective on this acquisition, discussing Mitel's market positioning, why the move makes sense, and more.
July 14, 2017
Lantre Barr, founder and CEO of Blacc Spot Media, urges any enterprise that's been on the fence about integrating real-time communications into business workflows to jump off and get started. Tune and....
June 28, 2017
Communications expert Tsahi Levent-Levi, author of the popular BlogGeek.me blog, keeps a running tally and comprehensive overview of communications platform-as-a-service offerings in his "Choosing a W....
June 9, 2017
If you think telecom expense management applies to nothing more than business phone lines, think again. Hyoun Park, founder and principal investigator with technology advisory Amalgam Insights, tells ....
June 2, 2017
Enterprises strategizing on mobility today, including for internal collaboration, don't have the luxury of learning as they go. Tony Rizzo, enterprise mobility specialist with Blue Hill Research, expl....
May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.