The industry trends channels should address to be successful Matthew Townend – Director Research & Consulting

Who are we? Cavell is a “knowledge” business focused on emerging Comms markets, providing Consulting, Research, Training and Technical Professional Services + + + Supporting businesses to evaluate strategic investments, create sustainable service roadmaps & operating models and executing plans

Projects delivered in over 45 countries

Our research coverage is expanding Started research in 2005 as illume consulting Expanded our research into Benelux Moved into 5 other territories last year Took on more capability to expand into a further four countries going forward Expansion is through customers demand, USA or Asia

Themes in the Communications Market

Times they are a changing… “Customer Requirements changing” “Traditional Markets Revenue Falling” “Supply chains evolving with new suppliers” New Markets accelerating New Disruptive Competition Emerging

Key Customer Drivers Stay abreast of technological changes Starting to value customer experience and not the technology Customer service and Intelligence key Everything as a Service Cloud Based Services prevalent Digital Disruption & IOT key International services Video starting to emerge beyond the meeting room

Supply chains evolving Service Providers & Channel compelled to offer multi-service offerings Cloud Paradigm means Vendors can go directly to Enterprises or Channels in new Cloud world Distribution being value add redefined Channels future differentiation may lay in Service, Vertical Specialization, Integration, Customer intimacy

Market Trends & Opportunities

The UK Hosted VoIP market has grown to a total of 2.7m seats Hosted VoIP market has grown by 281,904 seats (11.63%) Annual growth of 529,962 seats (24.37%), an increase of 4,116 seats compared to the annual growth in 2015.

The UK SIP Trunking market has grown to 2.3m Trunks The SIP Trunking market has grown to a total of 2,347,077 SIP Trunks, adding 233,549 Trunks (11.05% growth) since June 2016. This is considerably more then at the start of the year where the market only grew by 191,018 Trunks.

Trends in Unified Communications Service Providers selling ‘UC’ to end users has not been successful Delivering communications in the context of the end user has been more successful for Service Providers Having a broad set of UC features is only relevant to a small number of users, most consume their communications through one or two key endpoints. UC The companies who have been successful in Cloud Communication have not been selling UC In Cavell’s experience, the Cloud Communications providers who have been successful have understood the context of their customers business and delivered a solution that is in that context. Vendors and some Service Providers sell a solution that targets Executives and those on the move but does not reflect the average company or employee, where UC is less relevant. How are customers businesses changing? How do they want their business communications to support this?

Cloud Communications Market Experiences Simple bundled propositions have prevailed Hosted VoIP traditionally competed with PBXs based on OPEX expenditure, but there is now more competition between offerings Providers have differentiated by: Global/International Focus Vertical Business Process Integration Integration to common business tools (Microsoft, CRM etc.) Focus on specific features/capabilities: Recording, Inbound/Contact Centre, Continuity & Security, Collaboration

Customer Requirements maturing Global Cloud Communications Embedded & Vertical Communications Digital Disruption Team Collaboration Improving Customer Interaction Mobility

Large number of Businesses have foreign Affiliates If you are selling to European Mid Market companies they are likely to have foreign subsidiaries Example UK has around 40k enterprises with 50 + employees Germany and France have most affiliates within the European community Interestingly with current politics Germany has a large number of US Affiliates Relative to its size Italy also has strong US and European Affiliates

“WHICH MAJOR GLOBAL CARRIER IS DRIVING THESE?” Digital Disruption Communication is at the the very heart of all successful business models Not surprising then that as we move into the world of Digital Disruption and new business models where communications is still at the heart of everything UBER (Calling & Messaging), Airbnb (messaging), Schindler (Mobile monitoring notification), WhatsApp (Calls and Messaging) all require communication but do not work with traditional carriers. 100 million voice calls are made every day on WhatsApp 1.2b WhatsApp users “WHICH MAJOR GLOBAL CARRIER IS DRIVING THESE?”

Who is enabling these Global services? A new Breed of (CPaaS) “Communications Platform as a Service Providers” are enabling this market Leading players include Twilio, Nexmo, Genband Kandy, Cisco Spark and others are arriving fast What do they offer A simple API focused platform that offers global reach, and enables developers to simply integrate communications into their apps and solutions

Team Collaboration & Messaging grows Slack - 5 million daily users and 1.5 million paid (Jan 2017) Slack targets larger companies with launch of Grid Microsoft reacted with launch of “Teams” end of Jan Facebook launch Facebook at Work Broadsoft launch Team-One based on its Intellinote acquisition at end of 2016 RingCentral purchased Glip Multiple other competitors including virtualized solutions from companies like: Yammer

Announce Next OS at Nextcon a new focus on customer interactions Requirement to maximize customer interaction has driven growth in a number of areas: Analytics both in Enterprise & Contact Centre Integration between recording and Analytics as SPs look for more insight Focus on inbound services and Queuing Dedicated and Integrated Contact Centre Capability offered by most Hosted Players Multi-Channel interaction in contact center M&A & partner activity been hot in this areas as providers look to augment capability: 8x8 – DXI, Broadsoft – Transera, Metaswitch partner Telax, Announce Next OS at Nextcon a new focus on customer interactions Key Contact Centre Players include Enterprises are now focused on how they interact with customers Result of that is focused investment on contact center Service Providers offering these as dedicated services and integated service into their hosted service Investing in Recording, analytic are moving to the enterprise from the contact centre Micheal – more M/A on this area later

How is my role as a reseller changing? The communications market is going through a period of rapid change How is Digital Disruption going to affect my customers? How can I ensure my solutions match my customers future needs? Is selling just voice going to be enough to differentiate me from the competition?