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Assessing Competitive Threats from Google and Skype FEATURE Assessing Competitive Threats From Google EVEN AS THE CHANNEL | www.channelpartnersonline.com and Skype continues to embrace cloud- based communications as an By Kelly Teal alternative to premises-based systems, a question nags at the periphery: What threat do self- serve technologies such as Google Voice and Skype pose to partners’ business models? After all, Skype and Google Voice are free and easy CLOUD COMMUNICATIONS DECEMBER 2011 CLOUD COMMUNICATIONS to use, and embraced by millions of users — albeit mostly consumers, SOHO and international workers. IN THIS ISSUE Comparing Providers p. 15 ■ Case Study p. 29 ■ Table of Contents p. 2 CHANNEL PARTNERS DIGITAL ISSUE DIGITAL CHANNEL PARTNERS 22 << Previous Next>> Google, in particular, is not a serious “Any time player in the business voice space, relegated largely to residential and [Microsoft or FEATURE casual users. With Skype, the story could be different because of Microsoft Google] roll Corp., which acquired Skype in October something 2011. Aberdeen Group predicts Skype will prove a game changer in the out, there’s enterprise, speculating that Skype could fit into several different areas: XBox, wide market Lync, Office365 and Windows Phone 7. This could shift how enterprises use acceptance, video, telecom, mobility, the cloud, social but as a networking and marketing, the firm said in a research note. The XBox gaming specific threat system, in particular, may become a portable telepresence system for to hosted VoIP, enterprises, if Skype’s high-definition video is incorporated, Aberdeen said. they’re not The more plausible use of Skype is within Microsoft Lync, the software giant’s mature enough answer to unified communications. to stand Aberdeen said a number of enterprises use Skype for real-time collaboration, alone.” even when they have Microsoft Live — | www.channelpartnersonline.com part of Lync — as an option. Simply put, –XCast Labs’ adding Skype to the mix would mean Michael Henderson more users. When it comes to Office365, Skype would provide a new peer-to-peer channel; in terms of mobility, it would allow for VoIP and video calling from the Windows 7 operating system. However, uncertainty surrounds Microsoft’s plans for Skype — and CLOUD COMMUNICATIONS DECEMBER 2011 CLOUD COMMUNICATIONS there are doubts about Microsoft’s ability to thrive outside its traditional software confines. (Zune, anyone? Kin? MSN Direct Smart Watch? The Microsoft Wireless Base Station? WebTV?) So, for now, indirect channel observers and participants don’t seem worried about Skype. IN THIS ISSUE Comparing Providers p. 15 ■ Case Study p. 29 ■ Table of Contents p. 2 CHANNEL PARTNERS DIGITAL ISSUE DIGITAL CHANNEL PARTNERS << Previous Next>> 23 And while that’s okay for the moment, one analyst warned partners to keep an eye on Microsoft’s activities. “There are some potentially interesting aspects they should be watching,” said Diane Myers, directing analyst FEATURE of VoIP and IMS at Infonetics Research. “If they’re not, then they have blinders on.” It’s probably fair to say that hosted VoIP companies and their partners aren’t ignoring Skype or Google Voice. But there is skepticism that either Internet-era giant will negatively impact channel sales, especially in the near term. “Any time [Microsoft or Google] roll something out, there’s wide market acceptance, but as a specific threat to hosted VoIP, they’re not mature enough to stand alone,” said Michael Henderson, channel chief of hosted VoIP provider XCast Labs. For Gary Coben, vice president of channel services for Evolve IP, the lack of concern has more to do with Google and Microsoft’s focus. The success of both companies can’t be debated, he said, but their commitment to businesses should be questioned. “While Google might be an exception in terms of their changing core competency, I’ve been around long enough to see Microsoft dip their toe into industries that were not IT-related, only to retreat once they realized the water was cold,” Coben said. “Anybody remember ResponsePoint? If you believe, like I do, that clients will continue to demand some level of personal attention, you have to ask whether either of these companies is prepared to actually talk to real customers about real problems.” Differing Target Markets. On top of | www.channelpartnersonline.com that, Google Voice and Skype contain too “These are many shortcomings to really appeal to the kinds of clients channel partners target. The clearly two risks of self-serve VoIP include the following: ❯ Quality of service can’t be assured different ❯ Security can’t be enforced products within the network ❯ Features may be limited ❯ Scalability is limited CLOUD COMMUNICATIONS DECEMBER 2011 CLOUD COMMUNICATIONS and business ❯ Support is limited segments.” ❯ Customized options essentially are non-existent –Telesphere’s Jeff Savage Admittedly, Google Voice and Skype IN THIS ISSUE Comparing Providers p. 15 ■ Case Study p. 29 ■ Table of Contents p. 2 CHANNEL PARTNERS DIGITAL ISSUE DIGITAL CHANNEL PARTNERS 24 << Previous Next>> work well for home office, international and remote users, and that’s not about to change. But most channel partners have FEATURE their eyes on larger customers, so those small fry aren’t part of their strategy anyway. “Leave the one- and two-line SOHO clients [alone] and concentrate on the three-plus-line SMBs,” said Tad Nikolich, vice president of business sales for VoxOx in Business, a division of Telcentris. At the moment, the only reason to get involved with self-service VoIP such as Google Voice and Skype might be to help clients with employees working from home or around the world. However, if the customer needs to hold discussions that are more than casual — requiring a secure connection, lots of features or high quality — expect clients to need cloud communications services. “There are sensitive things that go on in a company,” said XCast Labs’ Henderson. SMBs that don’t have an IT staff look to partners, not Google or Skype, to help address their security needs, he added. Coben concurred. “The enterprise, and a vast majority of the SMB space, will continue to require the high-touch response offered by the major VoIP providers,” he said. Lest you think these providers are in denial or naive, consider the perspectives of some VoIP analysts. These experts each noted | www.channelpartnersonline.com that Google and Skype are minor threats to hosted providers, and mostly in the SOHO space — where providers have already said they don’t like to focus. Elka Popova, industry manager for Frost & Sullivan’s North American Information and Communication Technologies Practice, summed up matters this way: “Besides functionality, [Google and Skype] lack the appropriate channels and other sales/marketing means (strategies, partnerships, professional services) to penetrate the enterprise space,” she said. CLOUD COMMUNICATIONS DECEMBER 2011 CLOUD COMMUNICATIONS Google is seen as the least threatening product because that company has made no headway among businesses. As it stands, Google Voice features no handset fulfillment, no service level agreements and no actual channel strategy. Nonetheless, that IN THIS ISSUE Comparing Providers p. 15 ■ Case Study p. 29 ■ Table of Contents p. 2 CHANNEL PARTNERS DIGITAL ISSUE DIGITAL CHANNEL PARTNERS << Previous Next>> 25 doesn’t mean Google won’t, at some point, get into these areas. If it does, said Infonetics’ Myers, partners will be critical to Google’s success. “You have to make sure you have LAN qualifications and someone to set up the FEATURE phones,” she said. If Google gets that far then, yes, the Internet giant will put heat on hosted VoIP providers. Google’s entry into the market “would maybe hurt some of these small providers, but they may not even be going after the same targets,” Myers said. Greg Potter, an industry analyst for In-Stat Research, agreed that going the extra mile would behoove partners, should Google Voice make its way into the enterprise. “There’s a bit of a “Leave the technological barrier to implementing Google Voice one- and ... into a business environment, the result being that many people would gladly pay more not to have to two-line deal with the hassle,” he said. Microsoft, on the other hand, has experienced SOHO clients some success in the business market, specifically with its Lync unified communications platform, [alone] and and could add to that success if it integrates concentrate on Skype smartly. Yet, given the lack of clarity about Microsoft’s intentions for Skype, it’s difficult to the three-plus- predict how hosted VoIP providers and their partners might be affected. Indeed, the best move providers line SMBs.” and their partners can make is a preemptive one, | www.channelpartnersonline.com particularly as operators start to include medium and –Telcentris’ Tad Nikolich large businesses — not just small ones — in their strategies, Popova said. First, offering hosted VoIP service implementation, integration and ongoing monitoring and management would put providers and partners a few steps ahead of Google and Skype. Perhaps more importantly, this would also serve to differentiate partners from their rivals, giving customers a value add, Popova said. “Even hosted services require the implementation of CLOUD COMMUNICATIONS DECEMBER 2011 CLOUD COMMUNICATIONS some CPE phones, gateways and SBCs [Session Border Controllers], and Skype or Google have no experience in that space,” she said. Promoting Self-Service. For the foreseeable future, then, Skype and Google Voice appear
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