Last month, Cavell Group hosted the 4th edition of the European VoIP Summit. ISPs, ITSPs and other channel organisations across Europe congregated to discuss the trends and dynamics at play that are determining the future of the industry, and how service providers will become a key enabler of the technologies that we will come to rely on.
Hosted comms services are still in a period of solid growth and according to Cavell Group at the Summit, it’s seen an increase of 24% in the last 12 months in the UK, driven by changing network infrastructure. Research And Markets has also cited a significant growth in its recent report “European Hosted IP Telephony and UCaaS Market, Forecast to 2023”, claiming “the European hosted Internet Protocol (IP) telephony and unified communications as a service (UCaaS) market continues on a strong growth trajectory that is creating value for businesses and growth opportunities for service providers.”
From the outside, it almost looks like service providers don’t have a problem right now. A quick look at any of the channel media will highlight that actually, most are busily making hay while the sun is still shining. How many of those magazine adverts for hosted services don’t focus on the price? Fewer and fewer fixed line business calls are being made and voice provision is increasingly being positioned as an area ripe to reduce overheads rather than one to differentiate and add business value. What happens next, when the rush associated with the transition from ISDN/CPE is over and we’ve raced to the bottom?
This is what happens when you look at communication services from a telecoms, as opposed to internet, way. Telecoms providers under the hood are basically wet-string (local loops), fat pipes (trunks and interconnect), and the business model (software!) that stitches all of these together to create an end user experience. As an industry everyone knows that they have their own strengths and investment areas – there are only a handful of large scale local loop providers in the UK, but every service provider has their own end user service enabled by these. Installed wet-string can only go so fast, pipes can always be made fat enough, and both are entirely invisible (when they are working), meaning user experience (software) and price are the only ways to differentiate. Providers can make the bandwidth and speed possible, that’s their core business, but often rely on others to innovate and generate value add services.
This is why most service providers are focusing on price right now. Am I saying that service providers should concentrate on software? No. Service providers should concentrate on user experience, but this is now driven by software and they need a smart solution to this. Third party software developers will be the fastest innovators in the space and spearhead new communications applications, tools and services. There is so much innovation happening now that service providers will find it hard to effectively compete in the space. Rather, it’s easier for service providers to open up their platform for those third parties to develop integration and user apps and layer them onto the core infrastructure to deliver the most attractive possible service to their end users. They’re a route to market for the third parties, and embracing that is what is going to drive real innovation in the comms space and deliver real profit to service providers’ shareholders.
Take contextual communications, for example. Go back five or so years and “contextual communication” was at best, “integrations”. It was CTI, CTD and screen popping: telephony triggered “events” that bridged the telephony and IT worlds in a clunky way. But as the web became the universal UI, it has allowed contextual communications to enable immersive, joined up experiences on screen, all flowing in one place, rather than events triggering back and forth. It’s all about entire media streams, not just metadata.
Service providers are at the fore of enabling contextual communication among businesses, where employees, customers and other parties interacting with the organisation can do so seamlessly within a particular context. By working with third party app and service developers, they can be the ones facilitating contextual comms, and having a significant impact on the way businesses operate and communicate.
Author: Rob Pickering, CEO at IPCortex
Rob Pickering will be speaking more about contextual communication and how it can help transform customer engagement at UC Expo on May 18th at 11.40am.
