As we settle into what has proven to be a full immersion into a remote working culture, businesses have been forced to seriously adjust their long-term strategies. In a way, the heavy influence of our pandemic culture has made many technology decisions for us. What we're left with are questions about how to move forward.

In this latest episode of our Mitel video podcast, Mitel CMO David Silke and Cavell Research Director, Dom Black, explore these new and unforeseen Covid considerations and what it means for businesses everywhere.

Here's a transcription of the video:

Dave Silke: So Dom, thanks again for joining the Mitel CMO Chat Cast. We're very excited. It's taken us, I think, one and a half times to try to get all this up and running. But I really appreciate you joining from Cavell. We've set up this series of conversations, just as chats, around what's happening in the industry, and some of the challenges and opportunities that come along with it. It would be great to hear a little bit about yourself and Cavell, and what you guys are up to.

Dom Black: Sure. Thank you, David. It's great to be involved in this. It's a pleasure to be speaking with you. It's great to catch up as well. The internet issues at home have been the bane of my life for the last few months; these are the things we have to deal with now. I have been a Cavell for eight years now, and I'm running the research team there now. You can think about Cavell in three different parts. We're a consultancy and research firm, which most of the UcaaS market will know us from. We also have a pretty substantial events business now. The cloud comm summit, which is a great forum for service providers and vendors to meet and discuss what's happening in the industry. Then on the other side of Cavell is our professional services team. This sector deploys technology for vendors and suppliers around the world, helping them scale up their professional services team, when they need extra engineers to help fulfill their requirements. We've been tracking the UcaaS market in Europe for 15 years now. We've really watched the market grow from an infancy, to the position it is now. It's been a fascinating time. Every year, something new seems to happen, and this year is not the same. Everything that has happened over the last few months has really pushed the market on. All the marketing talk that has been centered around disaster recovery, and the ability to work from home has really come into fruition. So that's been fascinating.

Dave 5:22: I think from your work with Cavell, you guys have done a fabulous job of keeping a continuous finger on the pulse with the SP (service provider) surveys, and I know you're doing the same thing on the enterprise side now. What are you hearing or seeing, and feel free to speak about it from a service provider or enterprise hat, but what's the pulse or tone?

Dom 5:50: I think the last six months have been pretty tumultuous for the market in general. I think a lot of providers, at the moment, are rethinking their long-term strategy. Obviously, COVID-19 has had an impact on the industry like never before, as people are suddenly being forced to work from home and make that decision. But, it's being made for them: they have to move to the cloud, and these changes have to happen. A lot of the providers out there have moved very quickly to help enable their customers, and bring remote working solutions to them, and give them all the tools or services that they need. The other side of that, the impact is: a lot of this has been given away for free. For one aspect, a lot of providers are coming to us and asking, "How do we actually convert these free users into paying users?" Then the other side, one of the biggest trends we've seen, is the growth of Zoom in the growth of Microsoft Teams. We created an enterprise survey last year, where we did a survey of 1800 businesses, which we're about to kick off again in about a week. That survey looked at how many people recognize the brand of Zoom and Microsoft Teams. Those are the two most commonly recognized services in the market. I think 60% of enterprises have heard of Microsoft Teams, and about 30% have heard of Zoom. When we asked the service providers in March was, "What was the most commonly requested features?" It was Microsoft Teams integrations, and Zoom. Third was whether they had WebEx teams as well. What was fascinating through that was: the enterprise is now a lot more educated on what kind of services they're using. As providers, we have to look at the future. We have to think about once we come out of lockdown, and people can start settling back in enterprise, what the outcome will be. We have to ask ourselves, "What actual services do we need in our organization to move forward?" The service fighters and channels out there have to make sure that they have the right portfolio of products, and they're positioning those products well. Microsoft Teams and Zoom are big competitors, and you've got to make sure that you have the proposition in place. You have to be prepared with the marketing and the messaging to show that your proposition is going to be better than theirs, and fit better for that organization.

Dave 8:19: You've mentioned the freemium piece, the free offers and the challenge of moving to a paid model over a period of time. Just talk through that a little bit. If you're from a provider point of view, or even an enterprise point of view, What would you see happening over the next three to six months? Do you think it'll continue to be free for a while and eventually, be a battle to sign up as many as you can that will actually pay?

Dom 8:46: I think there's going to be an element of freemium in the market. I think people are expecting some services to be free. Even before this, a lot of providers were struggling to sell things like team collaboration. When I say struggling to sell those, I mean struggling to actually charge money for them, and get those services enterprised. A lot of people are trying to give them away for free, to make that service more valuable for them at the current price. I think there's going to be a challenge, because people are used to the service being free. So, you have to create a good value proposition. Make sure that when you're saying, "Well, it's like Microsoft Teams, but better." You have to show the customer why it's better, and why it's the best option integrated into their workflow. You have to show why other companies in their industry have taken that solution, and why it's worked for them. Just saying that it's exactly the same features with a different brand is not going to be good enough. I think for everyone who's selling to the enterprise, you really have to live in the shoes of your customer. It's no longer enough saying, "Oh, it's an upgrade on your old solution." The customer has to really understand what they need. You have to give a real consultative sell, and make sure your fits their exact needs. At the end the day, that will hold more value for you in the long run. I think the key takeaway from all of our research at the enterprises, showed the reason that they chose their supplier, was superior pre-sales support, as well as real time responsive support. That showed us that being a trusted adviser is so important in this day and age, and I think it's going to be so important in the future. There's a lot of competition out there, as well as a lot of competition off the shelf. If you can ensure you're offering something different, that's going to be your success and value in the future.

Dave 10:37: I had a really interesting conversation last night with a VAR from Colorado, one of Mitels Platinum VARs. He spoke about the emerging ecosystem. The virus ecosystem was typically IT integration, and communications integration. Suddenly, the ecosystem that he sees now, is focused around safety at work. It's working with real estate. It's the human integration. We've talked to Mitel about the hybrid worker in the hybrid workplace. From a provider's point of view, looking at the ecosystem in a completely different way, not just from the services that they provide in terms of the IT communication services. What are your thoughts on the holistic, full human IT experience that they have to have conversations about now?

Dom 11:33: I think, to some extent, it comes down to what communications is, and what people are buying. We look 5-10 years ago, when people bought a PBX or a Cloud PBX, they were buying a PBX because it made phone calls. And that was it, and that was great. Now 5-10 years ago, if you bought a Cloud PBX, it was doing the same thing, but in the cloud. I think now that communications covers a whole different myriad of different parts, it's no longer just voice. It's video as well. It's messaging as well. It's integrating those different channels into the workflows, and the different places that people want to communicate, and through different applications. So to some extent, I do agree with that. They're having to look at this beyond just a PBX replacement in a voice box. Again, that comes down to the challenge of: how they're going to change as a VAR. How do you change your business, and look at the different services you will need to bring into that, to make that holistic solution? But yes, I think it's definitely changing the way people are consuming their technology, and why they're buying different technologies as well.

Dave 12:44: I'm interested in your view. Is there a way provide to that enterprise, that had the initial reaction? I think you described it to me the last time as the plaster basically. In other words, can we get people working remotely as quickly as possible? But, then that evolves into a conversation that moves into a recovery. What does the enterprise IT manager, or the enterprise person; that responsible for bringing a workforce back either temporary or full time; have to consider since they may not have thought about, on the fifth of March or even early in January?

Dom 13:31: So, we're just we're building our questions at the moment, and looking at what questions we're going to be asking enterprises in the next survey. We're doing a whole question based around what impact COVID is going to have. We've had some really fascinating conversations over the last few weeks. One customer was coming to us saying someone's ripping out all the handsets from their office, purely because it's a remote work, hot desking situation that they have in their office. They can't have the phones in there, because if more people are using them and pressing buttons, they don't want to have the risk of someone who's infected with COVID, coming and pressing on a phone. The next person that uses the phone, may spread the virus through there. From their aspect, they're looking at removing all of the desk phones from the office. One of the questions we're raising to the enterprises is, What does the future of your workforce look like? Are you going to be full remote? How many people are going to go into the office? And if so, how often will they be going into there? When we looked last year at this, we were still seeing a significant number of enterprises that had remote working. This was only for a core, few people. Maybe some of the sales people weren't in the office full time. Maybe there are some people who didn't need to be in the office, who were working remotely. I think around 20% had over half their workforce work remotely. That's massively changed now. I think for a lot of people going back to the office have realized they don't have to go back. So, they're now looking at ways that they don't have to come into the office. That is going to put a lot of pressure on the IT manager. The will have to decide if they can give out just the tools and services, or if they also have to invest in access to employees at their home locations as well. Will they have to provide quality of service? How will they do that with home broadband lines? Are they going to have to start offering 5G backup devices, so that people can have a backup route broadband fails? On home broadband, you might have three or four weeks of SLA to get it repaired. That's not good enough in business. I say from Matt, who's my colleague, based out in Essex in the UK, "I want to cut through the fiber lines connecting their whole street." He had a business broadband line into his home office in the back garden, and home broadband line into the house. The house broadband would take four weeks before it could be repaired. But, for the business broadband, he was on a 5G dongle within a day. For an IT manager, you have to look at how you are managing those problems. Also on the other side, if someone's at home, and has five or 10 cloud applications running, How are you going to get the quality of service that they need? So, are we going to start to see the rise of home networking, SD1 solutions; which are providing app connectivity and better quality of service? It's no longer just figuring out what an employee needs from a communication perspective. We're also questioning, "How are they connecting securely to our VPN? How's the security going to be managed at home? How's your recording going to be managed at home?" We've already seen from a number of contact centers, that things like PCI compliance able to take credit card details. A lot of people have been struggling with that, because they're questioning, "How do we get people working from home when they're hearing credit card details, not just writing them down on a piece of paper?" There's some serious security concerns coming out of this as well. I think it's a huge opportunity for providers to start offering that remote work package. As you say, it's coming down to personas, and ensuring that remote working persona, isn't a sales person in their car all day. Instead, it might be someone in their home office, which requires good connectivity, security protocols, collaboration, security, and project management solutions as well. So there's a lot to think about.

Dave 17:37: Kevin has spoken a lot about the immediate digital transformation that COVID has created. I mean, it was the tipping point. It was beyond that, because everything tipped at the same time basically. You've got a ticket about the digital ecosystem, and how it is dramatically changing. That must have had a massive impact on the traditional view, or even the service provider. Have you begun to see that manipulators are manifesting in terms of offerings? Or have you seen a different ecosystem emerge?

Dom 18:20: I think people are looking at different services they need to bring into their portfolio now. If you're just selling PBX or a Cloud PBX service, that is just one part of this suite. At the end of the day, you're only going to be able to take that one part of the value chain. A lot of people, have to look at how they're going to become that VAR, or value added customer facing company, even if they're managing your own platform or running your own service. I think a lot of service providers didn't really have that. Instead, they were focused on how to make their UCaaS solution with as many features as possible. Now the question is, "How do we integrate our UCaaS service into as many different solutions as possible?" From an enterprise's perspective, one thing we're quite interested in is, What defines that purchase decision as well? If your whole company runs on Salesforce, and Salesforce is at the heart of every thing you do inside your company, are you going to buy us a solution that isn't integrated with Salesforce? No. Salesforce is really driving for that conversation. It's same if you're on AWS, or if you're on Google Cloud, as well. Those kinds of decisions that enterprises are making are now more important than what cloud voice service they have. I think there has to be a thought process through the service providers of, "What are we going to integrate our services with? How do we reach those customers? If our customers have some really bespoke needs, how are we going to integrate our service into those bespoke needs, to make our company as valuable as possible?"

Dave 20:00: Those first two words in VAR, the "value added", have taken on a completely different meaning. It's not "value added" in terms of IT, it's "value added" in terms of keeping your business alive. That is most important, and then we need to have a recovery plan. You mentioned the buying decision. Are you seeing different buyers? Has that become a different number of people all of a sudden? Or has it changed significantly?

Dom 20:30: I think traditionally the buyer does vary from company to company. But, one thing that we're going to see coming out the back of this, is your communication decision is no longer the IT managers idea of the best solution. It's a board level decision now. For a lot of businesses previously, it might have been centered around cost effectiveness, or simply if it works. It may have been as easy as deciding that it fulfills a gap, and has dial tone with features. But for most businesses, now, disaster recovery is going to be top priority. They need to ensure everyone can suddenly work from home. Business continuity is key in this. It has to be a board level decision, that takes communication strategy into account. I think it's even more pertinent for international companies as well. We've spoken to a lot of providers have said, "We don't really see the need in serving international customers. If they're one of the companies in France and in the UK, they'll buy locally and that's fine." That's no longer the case. Things like collaboration require you to all be on the same platform. We're still not seeing the right integration between all of the different collaboration platforms. So again, that comes down to a board level decision or a senior decision. They have to ask themselves, "What solution are we going to take forward, and why are we going to do that?" I think that's going to then play more into security. There will be a need for a long roadmap. Communication, again, is now part of the core business. You also have to factor in how that works together.

Dave 22:05: It's really interesting, to think back; a couple years ago, people were writing off UC. All of a sudden, it has emerged as one of the most critical components of anybody's business strategy. This is because it's pervasive. I have one final question for you. I apologize. I know we've gone long, but it's been a great conversation. Are you seeing any type of recovery? Are you seeing any momentum, or things beginning to open up in any way, or any signs out there?

Dom 22:42: We're about to kick off our research, and we're going to have a much clearer view on that in about a month and a half or two months time. Most of the providers we've spoken to have seen pretty phenomenal growth over the first couple of months, followed by a slow down of services. I think the things providers need to worry about, is if people will go back to the same way they communicated before. Or, Will people look at what they have on their portfolio now and decide, that actually works better for us to communicate this way. If you're in the office, you have your desk phone. Suddenly, you're working from home, and you realize, you actually don't make any external calls. Why shouldn't you just have a collaboration, which allows you to do internal calling? If you need to speak to someone externally, you have video conferencing, and can set up meetings through that. But, actual calling outs of the business, may not be needed for every single person there. I think on the mobile side as well, people might look at that mobile site and ask, "Well, do we need this on our mobile devices? Do we need to give everyone mobile phones instead? Or, if people are just working from home now, do we actually need to give mobile phones to people, or can we put applications on their mobile phones to solve that problem for us?" So, I think there's there's a lot of issues that could come from this. I think For a lot of SMBs, as well, or companies serving the SMB, they really have to look at their customer base. I think some of the the worrisome stats that are coming from a lot of countries now, are about the recession that's going to be looming over the top of this. Those will be tied back to the question, "What happens to those SMB customers, and are they still going to be looking at investing in cloud solutions?" I think for the PBX market, people making large CapEx investments now, especially in a PBX; which might not have been able to run or enable remote working; might start slowly moving towards the cloud. I think the cloud could become the future here. I know Mitel put a lot of time and effort, and are seeing some real success now on the cloud solution. So, I imagine that something you're seeing too.

Dave 24:44: The input we're receiving now is, "Thanks for your initial help, getting us set up remotely. Now let's talk about quality of service. Let's talk about integration. Let's talk about security." But, it's that integration of applications, and overall collaboration experience. As you say, beyond voice, collaboration is becoming such a fundamental part of every conversation. Dom, as always, it's not only great to talk about the brilliant job Cavell is doing, it's always great to get your personal insight. I really appreciate it, and thanks a million for your time.

Dom 25:23: David, it's always a pleasure. Thank you too.

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