Wednesday, August 26, 2015

3 RLEC Revenue Comparisons

Windstream reported revenue for 2Q 2015 this month. This is after the REIT spin-off, Communications Sales and Leasing Inc. (CS&L), which now trades on NASDAQ.

The numbers break down like this:

Total revenues were $1.4 billion for 2Q2015
Consumer service revenues were $314 million
ILEC small business revenues were $108 million
Carrier service revenues were $156 million
CLEC Small Business service revenues were $146 million
Enterprise service revenues were $485 million

Gary Kim has a comparison of WIND and Frontier (soon to own more VZ assets) from 2012. "At December 31, 2011, Frontier had 3,103,800 residential customers and 309,900 business customers. For the six-month period ending Dec. 31, 2011, Frontier earned $692 million in business customer revenue, and $544 million in consumer revenue."

"For Windstream, results were even more pronounced. Business revenue in the fourth quarter of 2011 were $888 million, while consumer revenues were $118 million." Compare that to 2015 where consumer revenue is now $314M (which represents 22.4% of revenue)! After buying RLECs, data centers, KDL fiber and a strategy for out of network CLEC business revenue.

Another RLEC that grew up for comparison: "Of $4.4 billion in CenturyLink second quarter 2015 revenue, business revenues represented $2.7 billion while consumer revenues were about $1.5 billion. In other words, the business segment represents 61 percent of company revenue," writes Gary Kim.

"Frontier Communications total revenue of about $1.4 billion as well, with consumer revenue of about Total residential revenue was stable at $615 million for the second quarter of 2015, while total business revenue was $621 million. So a bit more than half of revenue was generated by business customers." [Gary Kim again]

It is interesting how important low-margin consumer revenue is to the RLEC business model matrix.

Monday, August 24, 2015

Are Vonage Acquisitions Adding up?

Vonage is on a buying spree that started with Vocaolcity in 2013 for $130M ($105M in cash). Next it set its sights on the mid-market where it moved from Hosted PBX to UCaas via the Broadsoft platform. It grabbed up TeleSphere first for $114 million in cash and stock. Then it grabbed Simple Signal for $25M. This past week saw Vonage buy iCore for $92M.

In May of this year, Vonage bought gUnify, the middleware for BroadWorks to integrate with Google, Clio, Zendesk, Salesforce, etc. A quiet move that was mixed in with Q2 earnings noise.

"For the first quarter of 2015, Vonage reported revenue of $220 million compared to $221 million in the year ago quarter." Yet "This is the Company's first full quarter of results including Telesphere, a Vonage Company, which was acquired on December 15, 2014." So revenue went down despite the acquisition?

"Vonage Business results include Vonage Business Solutions ("VBS", Vocalocity) and Telesphere, and will include SimpleSignal in the second quarter. Revenue at Vonage Business was $42 million in the first quarter, a year-over-year increase of 49% on a pro-forma basis, as if the Company had owned Telesphere for all periods. Customer churn was 2.2%, an increase from 1.6% in the year ago period. Ending seats were 338,000, up from 196,000 seats at the end of the first quarter of 2014, reflecting strong organic growth and the addition of Telesphere." [press release]

The consumer side had some losses - "Vonage's Consumer business reported revenue of $178 million in the first quarter of 2015 compared to $202 million in the prior year period." Business revenue - inorganic and organic - are barely keeping up with the consumer losses. And "Average revenue per line ("ARPU") was $27.97, down from $28.54 in the year ago period."

142K seats were added -- no idea how many came from acquisition and how many were "organic".

Some day - 2 years maybe - Vonage will be 75% Broadsoft shop selling B2B UCaaS with a minimal amount of consumer business, mainly from its mobile apps and international play.

PingTone was grabbed by Fusion last year. Globalinx got acquired by Birch. Take the big guys out - Sprint, VZ, XO, Comcast & the cablecos - and the Broadsoft customer base in the US is shrinking in number. No idea how that plays out, especially for the 275 smaller customers, who are now dwarfed by Birch, Vonage, Comcast and VZ.

It would be a good question to pose at Connections, BSFT's annual customer executive forum. Likely, remember what happened to the M6 platform? That is likely the same answer. Three other factors: (1) BSFT is pushing its own white-label service; (2) its alignment with the Big Boys; best example being what it did for VZ; and (3) the BSFT tax is high. The maintenance fees or software licensing fees are higher for BSFT than any other platform. What happens when it has to live off just those fees because no one is dropping $1M for a new softswitch?

On examination of the members of the Cloud Comm Alliance, new members are coming from Europe. Old members are changing logos and hanging new signs.

Just something to ponder.

Monday, August 17, 2015

New Hire On-Boarding Process from Amazon

Do you have an employee on-boarding process? Here is the Amazon one from a BI article.

"It is called “New Hire Orientation”, or NHO. At Microsoft (referencing my personal experience), this is called “New Employee Orientation, or NEO. Every company has one, and they call it something. Here’s what happens at ours, precisely:"

  • New employees get a good breakfast (fruits, pastries, cereal, that kind of thing)
  • They immediately get a laptop and backpack
  • They get a “Welcome to Amazon” introduction
  • They fill out benefits paperwork
  • They learn a bit about the company, including our leadership principles
  • They hear a story about how important our customers are, as “Customer Obsession” is widely known to be our first and foremost leadership principle
  • They hear from a guest speaker about their experience at Amazon
  • They get their badge picture taken, and receive their badge
  • At the end, the employee’s Manager is waiting for them to welcome them to Amazon, and the new employees get taken out to lunch

"This happens from 8 AM – 12:15 PM, or 9 AM – 1:15 PM. Anyone else know of any other company that has a somewhat similar process for new employees?" from Business Insider
I hope you also have a client on-boarding process.

Sunday, August 16, 2015

HIPAA and Faxing

So AT&T calls customer to tell them to get off the copper. Migrate to VoIP. As if it were that easy.

SIP trunks typically do not play well with fax. AT&T and Level3 do not recommend their SIP trunks with faxes.

Enter the efax services. However, if a healthcare office is going to go efax, there are HIPAA compliance issues. With some fax services, it is store and forward, so how is the data stored? Is it encrypted?

The HIPAA/HITECH law describes that a service provider that has contact with Protected Health Information (PHI) must provide a BAA (business associate agreement). Efax by J2 doesa good job of explaining the BAA here. The federal government explains it here.

There are companies that specialize in healthcare faxing, like Scrypt.

There is a PhD who explains how to fax within compliance using efax by J2 enterprise.

The problem can be the email. As efax sends the fax via an email attachment, it means that email may have to be compliant too. Even Faxage suggests secure email.

“If you use a cloud-based service, it should be your business associate,” David Holtzman of the U.S. Health and Human Services Department’s Office for Civil Rights, Privacy Division, said in this Yahoo small business article. “If they refuse to sign, don’t use the service.” [source]

Want to see some BAA examples? Here and Here.

The Status Quo

The status quo never changed the world.

The status quo is static. Keep moving. Forward. Always forward.

Amazon Management Policy

Amazon's management style took a hit this week with first a NYT article followed by coverage every where. This article sums up the management playbook.

Managers at Amazon  are expected to focus primarily on the customer and to “work backward” from that point.

Company leaders take ownership of the company’s overall destiny and practice founder Jeff Bezos’s famed long-term focus (vis-a-vis short-term results).

Leaders at Amazon are continuously not just innovating but simplifying.

Managers are expected to hire strong talent and, in turn, to develop those hires into leaders.

Be frugal, as no “extra points” are awarded for “growing headcount, budget size or fixed expense.” (Work them to death.)

Don’t think small. Raise the bar. Stay curious and keep learning.

Follow these rules or you are not a Leader -- and we will fire you as part of our Darwinism talent policy.

I like Jeff Bezos, but if this is his idea of good management -- and his company doesn't really make money --maybe he has it all wrong.

Thursday, August 06, 2015

How Is Your Referral Program Going?

Recently, RC announced that it was going to use Amplifinity to Automate and Grow Referral Program.

I know my clients struggle with an effective referral program. (Who doesn't?)

Here are 6 keys to a referral system:

  1. Trust - they trust Wind or C-Link or At&t to do what they do and pay them.
  2. Assurance that you will take care of everything.
  3. Recognition is a bigger motivator than money.
  4. Payment - not a credit on the bill; something tangible.
  5. Structured, Active Program (not passive)
  6. Deal Registration, even something as simple as this from C-Link.

This big check, presented on a stage, photo in the newsletter. THAT is how you get referral folks excited!

If you need help with your program, call the RAD-INFO INC Hotline at 813-963-5884.

Wednesday, August 05, 2015

News Tidbits to Start August Off

GoDaddy is now a Vonage Business partner, pumping out emails about free phones from Vonage Biz. I am sure that when you buy a domain from them, you will have to go through a screen asking you if you want a free phone adapter.

For ITSPs, Polycom has a marketing promotion going on. ANPI talks about it here.

Wondering about the Skype/Lync relationship with voice and other UC? My pal, Greg Plum, is an expert on the subject and has a webinar on 9/1.

Frontier is supposedly jumping on the FiOS bandwagon - after they buy FL, CA and TX from VZ early 2016.

The Impact of downtime by Windstream. (pdf infographic)

The Next UC Storm is Brewing. An article that was in both of social streams often (twitter and LinkedIN) this morning.

Tuesday, August 04, 2015

Email Marketing for Marketers (webinar)

I often wonder why vendors specifically don't do a better job in the email marketing department. How often do emails get marked as spam? A lot. Too often. Even when people signed up for them!

Seth Godin's book, Permission Marketing, (aff link) is 16 years old! Some valuable lessons in that book. Do you think your email list is your biggest marketing asset? You have their permission to market to them. Don't abuse it! Give Value First. Be Generous. It pays dividends. Learn what works.

Based on Seth's book and my own experiences email marketing for myself and my clients, I am offering a 45 minute webinar on email marketing on Wed., August 19th at Noon ET. It is modestly priced but with the investment of both your time and money (or your money back!)


Wed., August 19th at Noon Eastern time for just $35!

As always, RAD-INFO INC offers a money back guarantee. If the webinar concludes and you are unhappy for any reason, email the office for a full refund.