Out with the Old, In with the ???
At UC Summit, the channel is still grappling with business models for cloud-based Unified Communications.
Here it is, just over 30 days after Enterprise Connect, and where am I? At a conference--the UC Summit in San Diego. Yes, the winter in Chicago has been, well, what's the word I'm looking for? Oh, horrific. And the city of San Diego is gorgeous. And warm. And sunny.
But really, to go from one conference to another? Obviously, I've got a problem...if anyone out there knows of a 12-step program that'll help, please drop me a note.
That said, I want to send heartfelt congrats to Jim Burton and his UC Strategies associates. The UC Summit is intriguing and instructive for lots of reasons, not the least of which is its focus on a segment of the industry that is all-too-often overlooked and under-emphasized: The channel, the conduit by which the vast majority of products and services reach the market. And the simple truth is that if you don't know what's happening to the channel, you don't know what's happening to the industry.
So, what's happening to the channel? In a word: Turmoil. And that's because the same set of issues that is making buyers crazy is having a similar effect on the channel. Only in a different way.
The Cloud has often been called a disrupter. And that's because it not only challenges the assumptions underlying what buyers do, it also blows up the channel's traditional business model: If buyers migrate from buying hardware products to buying software services--and in my mind that's a big "if"--it creates a good news/bad news situation for the channel.
The good news is that software-as-a-service will create a kind of annuity for the channel; payments will continue for a long, long time.
The bad news is that the channel's upfront revenue will decline--in many cases substantially. And when you have rent, equipment and people to pay for, having less revenue flowing in isn't a good thing.
So, believe me when I say that the channel isn't the most enthusiastic supporter of the Cloud. The question has been how much say they'll have over the matter. Two years ago, the last time I attended the UC Summit, I thought that they weren't going to have a choice. Today, I'm less convinced that it's a done deal. Compared to what I heard in 2012, at least some of the manufacturers are softening their Cloud-or-nothing rhetoric.
ShoreTel's CMO, Mark Roberts, for example, even as he remained bullish about the Cloud, acknowledged that the prime growth target was "hybrid" Cloud. Roberts recognized that, for many enterprises, moving their communications and collaboration systems totally off-prem wouldn't fly. Others, like newcomer Swyx, which is offering a Cloud-based softswitch service, is focused more on the consumer and SMB markets than the enterprise.
So, takeaway #1 from the UC Summit is that the communications and collaboration world is splintering. The phrase "One size doesn't fit all" has been heard for quite some time, but it's only now receiving the legitimacy it deserves. The Cloud is right for some situations, some businesses and some business requirements, but not others.
This of course only makes life more treacherous for the channel. They've got to make business decisions; they've got to place their bets. Is the Cloud going to be mainstream, or is it going to be a sideshow? Are they going after enterprise customers? SMBs? Consumers?
Takeaway #2 from the UC Summit is that the channel is looking at a mirror image of the challenges the customers are facing. There's no question that this is a period of transition. But a transition to what? It's clear that some elements found in traditional communications architectures and systems are going to be less important in the future. Same holds for some of the traditional vendors.
What's not yet clear is what--and who--will replace them.