Chris Kranky

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Enabling the next generation of hosted communications?

Chris KoehnckeChris Koehncke

hosted-unified-communications-300x225IP Centrex, hosted PBX, cloud communications and now Hosted Unified Communications — for years a small group have tried to make the notion of “hosted communications” a growth market. The name kept changing, the service didn’t.  Early on they faced the onus of having to educate the market on what “hosted communications” was, then the challenges of poor LAN infrastructure, the difficulties with SIP signaling in providing functionality beyond a simple voice call and finally the nightmares associated with interop testing of numerous “supposedly” compliant devices. Finally, they hit the headwinds of addressing the “more for less” axiom that is needed for rapid technology adoption. At a typical price of $40 per seat per month – generic hosted UC didn’t look like an obvious good value.

Just as it seems the hosted UC vendors have licked all the problems and ready for smooth sailing — WebRTC shows up.

Many UC suppliers are viewing WebRTC as a “yeah we’ll do a WebRTC client and put it into our arsenal.”  But I think they’re missing the point and more importantly the larger opportunity.

Telephony systems are mostly generic providing everyone the same experience. Phone systems have 10,000 features mainly because 10,000 different customers demanded those features, it’s a big mish mash of stuff. UC suppliers are mostly experts at understanding voice, they’re not experts at understanding specific vertical market demands.

With the ease of WebRTC development, it’s likely that those who do in fact specialize in verticals will find they can incorporate voice into their product mix with little risk or cost.  If the UC players think it’s a crowded market, just wait, life is about to get even more interesting.

A simple example might be Squirrel Systems, which provides restaurant point of sale systems for wait staff ordering and back office management. The system is an Internet connected PC and they support various mobile devices including tablets and smart phones. Adding voice will now be easy. Similarly is Lavu, which is like Squirrel, but is offered on a hosted basis to restaurants. Same opportunity.

Further imagine opentable embedding a WebRTC element into their app and they partner with Squirrel and Lavu for connectivity. Thus I could call from within opentable directly to the restaurant. Where is the PSTN? Well there is no PSTN in this scenario. Service provider? What service provider?

Extrapolate this out to the multitude of vertical specialists and you start to see the challenge for today’s UC suppliers. Who is their competition? The answer – everybody.

Despite this, there are clearly opportunities. Green field niche players can rapidly emerge as service providers, with low costs, you don’t need a big installed base to have a viable business. Existing vertical players will need expertise to include WebRTC into their application meaning perhaps new employees and consulting opportunities. While many calls might never ride on the PSTN, there is still a need for PSTN connectivity

Will there be a need for generic UC solutions? Sure, but incumbents may find it more difficult to grow at the current price points without having unique attributes that are actually meaningful to the end user.