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The Summer of our Discontent - The Perfect Storm

This summer has seen the continuation of the rapidly evolving new business environment, and the inevitable ongoing struggle with moving the distribution and carrier channel in the new market direction, which is having profound effects on customers, vendors, and even consultants.

It has been an interesting summer to analyze how enterprise, government and SMB customers are deciding who to buy next generation communications products and solutions from.

Some of the Trends and Shifts from the Summer of 2016

This summer has seen an accelerated pace of industry consolidations and acquisitions (too numerous to mention for this space). We have provided a few examples below of industry consolidation/rationalization and the evolving role of channels and carriers for next generation communications technology products. Check out my LinkedIN profile or FOX 2.0 Blog to get more regular updates on industry happenings as they occur throughout the month.

Changes at Avaya Canada

Avaya recently announced their new Channel Chief, Ange Valentini. During a recent Computer Dealer News interview with Ange, he said he plans to align channel partners with key new product initiatives such as Zang and Breeze. One of the comments we found interesting was…“I see how more and more currently-successful channel partner, or even a brand-new channel partner with some investment money, would hedge their bets and include ‘other’ competitive offerings, rather than bet-the-farm on Avaya’s future. This goes for all product channels, not just Avaya’s.”

Genesys purchase of Interactive Intelligence

As many of you know, there has been numerous articles about the recently announced purchase of Interactive Intelligence by Genesys. For those of you not familiar with these companies, Genesys is one of the global leaders in sophisticated contact center technologies.

Interactive Intelligence is a primarily North American contact center vendor who has developed next-generation integrated multi-media contact center solutions that easily integrate into business applications and processes. They have on-site versions and also their recently released totally-cloud-based version.

Vendor Traits for Future Success

The characteristics for successful vendors will be those with the commitment, market foresight, and cash-flow to survive the short and long-term. We believe these traits are even more essential for success in the long-term, particularly when investing in the changing skills required to sell, design and support changing products and solutions.

Talking to Vendors and Customers Related to Spending Trends

During this summer, we talked to numerous folks from Avaya, Bell, BrantTel, Cisco, Genesys, ININ, NEC, Panasonic, Rogers, TELUS, ThinkTel, etc. We wanted to find out how their customers were doing related to committing to investing in technology upgrades and replacement projects.

Most, if not all of them, said that their customers were holding off with a ‘wait and see what happens in the industry’ before committing new money. They also said that their IT capital and operating budgets were continuing to get squeezed related to short/medium-term cash flow.

We agree with the vendors’ comments above based on our own discussions related to our clients’ acquisition plans. Many of our enterprise and government clients have put projects on hold based on the concerns related to the accelerated pace of consolidation within telecom sector, and the lack of funding for next generation telecom oriented projects.

Perfect Storm

We put this visual together to try to help explain the various factors that are converging, and are interdependent, within the IT and telecom sector. Each one of them is tied to, or affects the others in ways that we have not totally determined the long term affects of.

This is because we really are within the storm (like a funnel cloud), and can’t really see the size, breadth and width of the total picture.

What does this all mean to customers?

There are hundreds of thousands of companies in Canada who have legacy Nortel systems that are coming to end-of-life soon.

There are also thousands who are running on legacy telco Centrex services.

And lastly, there are those clients that need to accelerate their capability to handle business growth, whether small start-ups or through corporate consolidation.

There is also the aging of the telecom workforce, and the declining understanding and expertise of hard core telecom knowledge required to make enterprise-class solutions work reliably. (Check out our Facebook 9-1-1 Tech Advisors page to see examples of the declining performance problems associated with legacy 911 environments if you don’t believe us).

As we continue to analyze the vendors and customer investment decisions, we will provide our commentary and guidance.

It certainly has been an interesting summer, and the fall and winter looks like the storms will continue and even grow in the technology world. Hold on folks!

As always, we welcome your thoughts and feedback. Do not hesitate to contact us if you would like assistance on how to survive through the ICT storms!

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