The shift from legacy to cloud communications and UCaaS (Unified Communications as a Service) has been extensively discussed from the customer’s viewpoint – from the challenge of changing mindsets to the more technical migration pain points. But what about the provider’s viewpoint?
In a recent talk with Ahed Alkhatib, Head of Sales and Marketing at Ericsson-LG Enterprise, we delved into their perspective as a provider, exploring the dual transformation of technology and business models, and trying to answer a key question: How can providers embark on a successful UCaaS journey while continuing to offer on-prem solutions?
Technology Transformation
Like all seasoned business communications providers, Ericsson-LG Enterprise has witnessed a significant technology shift from traditional hardware solutions to cloud-based software. The evolution of UCaaS has driven this change, with a notable shift in market share from legacy vendors to newer players like RingCentral and 8×8.
“We identified pretty early on that this shift in the market was happening, and started investing in developing our own UCaaS platform,” Alkhatib notes.
The global market, including both mature and emerging economies, has been embracing the cloud at a growing pace. As a company with over 50 years in the industry, this marked a substantial change for Ericsson-LG Enterprise.
“We’ve successfully navigated previous technology transformations in the market, shifting from analog to digital to IP to Unified Communication, and now Cloud,” Alkhatib says.
“But what makes this last transformation to UCaaS and cloud ever more complex is that it’s not just a technology shift – it is also a business model shift,” He explains.
“We’re proud to have met that challenge head-on and demonstrated an ability to successfully transition both from a technology and business model perspective.”
Business Model Transformation
Transitioning from premise to the cloud isn’t just a technological shift; it necessitates a profound change in the business model.
“The UCaaS model demands a continuous and intimate relationship with the customer, which can be unlike the transactional model of the past,” Alkhatib explains.
“Monthly recurring revenue models have replaced traditional one-off CAPEX sales models, challenging us to redesign our go-to-market strategy, service models, sales engagement, and billing methods.”
While acknowledging the complexity of this transformation, Ericsson-LG Enterprise not only manages to rise to the challenge, but also transcends initial expectations.
“Our UCaaS business is growing consistently at over 30% per year,” Alkhatib shares.
A Note About On-Prem
Despite the dominance of cloud solutions, it’s important to note that on-premises communications solutions have not vanished. Alkhatib highlights the fragmented on-premises market, alongside the recent reduction in its overall decline rate.
“Believe it or not, we’re still seeing on-prem growth in some markets,” he notes.
“This effectively means that providers are now required to offer a mixed portfolio comprising both cloud and legacy solutions, which can be very challenging.”
Ericsson-LG Enterprise: Offering a Choice
One of the keys to Ericsson-LG Enterprise’s continued success in such a complex landscape is recognizing the absence of a one-size-fits-all solution.
“Our strength as a company lies in our ability to offer choices, providing a consultative approach based on the specific needs of each customer, whether it’s CapEx, OpEx, on-premises, or cloud,” Alkhatib says.
This flexibility is in great part thanks to the fact that all of the company’s solutions are developed internally.
“While other legacy vendors chose to partner with cloud providers like RingCentral for their UCaaS offering, we’ve always made sure to develop our technologies and solution in-house,” Alkhatib says.
“This sets us apart from our competitors, as it ensures seamless integrations and a consistent user experience across all on-premises and cloud solutions.”
“We’re extremely excited to be in this position and look forward to seeing what the future holds.”
For more information on Ericsson-LG’s cloud (and on-prem) solutions, visit their website here.
