With which of the three UCaaS provider types will you partner?
That question comes from Carl Katz, Nextiva’s vice president of channel sales for North America. He’ll lead a presentation titled “Differentiating Yourself in a Crowded Communications Market,” March 10, at the Channel Partners Conference & Expo in Las Vegas. It’s part of the technology conference track that Nextiva is sponsoring. We asked Katz about his perspective on the UCaaS market and where he sees his company positioning itself.
We have edited the transcript for clarity.
Channel Partners: What’s the biggest trend or challenge facing the UCaaS/telephony market?
Carl Katz: The biggest trends in UCaaS are market consolidation, choosing the right provider and the race to zero. Partners should have an in-depth understanding of with whom they are doing business and their long-term vision. There are currently three types of UCaaS providers in the market.
The first type of provider is the price player. The price player is only concerned with offering basic UCaaS features and land grabbing market share. These companies typically do not provide solutions; they provide a cheap entry into UCaaS with basic features and little product progression. The providers understand that prices are decreasing by an average of 15% annually; therefore, they must grab as much market as possible as they are concerned that larger UCaaS providers will come in and provide long term solutions to actually help businesses increase their effectiveness in an ever more competitive market. Since they have been selling on price, the price player does not have a vision for the future and never had the margins to invest in advancing technology.
The second type of provider is the integration player. The integration players are typically the larger UCaaS companies who have acquired different technologies to integrate into their platform. They were forward-thinking when the margins were higher and made investments to provide their customers with solutions beyond UCaaS. These companies created “platforms” by piecing together disparate technologies, which they then attempt to integrate into one product portfolio. The issue that most of these companies are facing is that they never complete the integrations of the new products to create the platform, but instead integrate the technologies together piecemeal, or sometimes never at all. Right now, the integration players offer pricing even lower than the low-price players to get them on their “platform” so they can upsell in the future. The low-priced players are being challenged and pushed out of the market by the integration players.
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The third type of provider is the organic platform player, which is where Nextiva sits. As a technology company, Nextiva organically created our own platform five years ago when there was more margin in UCaaS. Products like sales and service CRM, live chat, and surveys are now available on one platform. With providers like Nextiva, businesses have the option to adopt an ever evolving platform that will help them increase productivity and gain a competitive edge. These types of solutions had previously only been available to large companies. With an organic platform player like Nextiva, partners can look for 10-plus year customers instead of lasting out the term, while offering a real business solution.
CP: Could you elaborate on what it means to sell to platforms rather than siloed communication?
CK: Today’s customers are looking for real solutions to assist them in this competitive market, and platforms offer a complete solution without the need for integrations. Selling UCaaS as a standalone product and then attempting to integrate with tools like CRM … is expensive and doesn’t provide the flexibility offered if the service was on one single platform. Businesses will start moving away from siloed and disparate technologies in order to facilitate long term solutions and lower prices.