Another Cloud Podcast
A podcast designed to bring you stories from the smartest minds in IT, operations and business, and learn how they're using Cloud Technology to improve business and the customer experience.
Zoom & Five9!?! The Good, The Bad, the Ugly
with Alex McBratney and Dustin Riedel
Don't have time to listen? Read the full transcription.
Ken, Curt, Alex, Dustin
Hello, and welcome to another cloud podcast podcast designed to bring you stories from the smartest minds in it, operations and business and learn how they're using cloud technology to improve business and customer experience. All right, well, I'm excited today because Dustin and I have the chance to bring on two close friends, industry associates, people we've known for a very long time in the telecom industry. And I'm happy to join by Kurt Allen and can business from Eagle tech. Gentlemen, welcome to the podcast. Glad to have you guys here.
Yeah. Thank you. Great to see both of you. It's always nice seeing Curt on the other side of the country as well as part of our new venture together. But no, thank you. This is This is fun.
Yeah, absolutely. You know, typically only see Kurt when he's posted about his taxation views there with on LinkedIn and the atrocities that are happening. taxation is theft. But I heard we miss you. And I'm so glad to have you on dust. co pilot today. Love it partner, Adler advisors. How you doing? bud? So good,
Super excited. I've known both these gentlemen for 10 plus years. It's super fun to third legends in the industry. And it's fun to be on a podcast and have them as friends and mentors, people to look up to in this space.
Absolutely. So Curt and Ken, I'll let you guys choose which one you can flip a coin but want to learn let the audience learn a little bit more about the two of you where you guys came from? how it all started? And how you guys got to Eagle sec. So why don't you guys toss it up and figure out who's gonna lead off and give us a little background about the two of you.
So Curt, I'll just lead off the talking about myself and yourself. Then we kind of say how we got together and what is Eagle tech advisors. So I've been in this space for 30 plus years in Telecom, competitive Telecom. spent the better part of the last 25 years as one of the founding executives and running sales, emphasis on the channel at telepacific, which became PBX. And I departed there after their acquisition of Sirius, February of last year. So anyway, that's the short version of it. So, Kurt, over to you.
Yeah. So you know, I go back to early 90s, at&t. And then I ran kind of wholesale and the partner channel for interCall, which is now cerrado, and then with a group of partners at a company called x for solutions that a master agency out of Chicago that we sold in 2016, to Sandler partners, California, how I got to know you guys, you know, even closer. Since then, I was the president of strategic channels at Windstream for about three years. And then most recently ran global channels for bonded So, like the lead can kind of kicked around for the last 30 years or so, I stumbled into this thing. And I'll let Ken kind of talk about what we're doing here. You know, are this this agency advisory agency that we started up?
Yeah, and so you know, like Curt, like myself, we came together also with three other gentlemen cardi printezis, a longtime, experienced sales marketing channel executive, Steve Braverman, also who you know owned in part and worked with Curt export communications amongst other investments he's made, you know, after an incense, you know, his efforts as well also been in this space for a long time. And then Michael cromwells, who is at a Dallas and Mike's long time also in the industry, global crossing x x four and most recently partnered with xx Oh, thank you can export in the brain. Anyway, but the five of us basically, we're former sales marketing channel executive, who had recently departed, or in Mike's case, he had moved out into the salting world several years back, and then it kind of proven out the model. And we just felt, Hey, why don't we get together? You know, the real key is, is that we liked, we don't we want to be with people you like to work with. We like to be in a place where we could add value. And we were all the type of people who we rolled up our sleeves. You know, I think, you know, Kurt's phrase I've adapted is the were the anti consultant consultant. You know, we're not the Stanford Harvard MBAs. You know, we're the folks who had the jobs we walked in the shoes, you know, we're pretty fast ramp up this we get where you are, and and what you're looking to achieve. And we're able to jump in and help. And then the key part of the key customers that we have today are other technology solution providers, some very large, some very small everyone with similar needs and how to grow their business and deal with the change in the marketplace, distribution partners. And a lot going on in that space that you guys are both very familiar with, and we're helping in private advice and support for some of their businesses. But then ultimately, the investors who support both spaces are partners of ours that we're working with to help them out with could be companies that they already have in a portfolio, but they're trying to supercharge growth and or things they're looking to add into his portfolios to work with us to either advise them on that, introduce them, and then maybe assist in the process as well. So I'll pause there critique and fill in blanks.
Well, I was just, I was gonna wrap around that that you mentioned, we were not Stanford MBAs. Kind of one of the cool things is that three of the five of us actually went to college together at the University of Massachusetts in the mid to late 80s. And the interesting part is that I'm here in Atlanta Ken's out in LA, and my prom, is down in Dallas. But we all went to school together in Amherst, Massachusetts, back from the range of 80. I guess you started in 84. Ken and I finished up in 90. So we tripped over there. So interesting. three of the five of us actually went to the same school, never knew each other in college met each other later through the industry.
So does that mean that the three of you all have your Tom Brady tattoo from all the years of glory that you've had out there?
Well, if you look behind me, you'll see my Yankee paraphernalia here. How many of you
Oh, there we go there.
Massachusetts, guys. So yeah, so we differ on that front. But I, I got very used to the battle between the umat as of Massachusetts, and in the New York crowd, Alex, I couldn't fit.
I couldn't fit seven rings. So I just put Atlas.
So tell us a little bit about I run through your website, tell us who like an ideal client is? Or if you're allowed to say, in a public forum like this, who some previous clients have been just so that we kind of get an idea? I mean, I understand whose solution providers are, but what are you guys talking about when you're talking about distribution channels? And and the such? Yeah, I'll talk a little more.
Yeah, I'll talk about that a little bit. Because you know, it certainly providers, especially emerging providers, we have a couple of master agents, who are basically telling emerging providers who want to get in their portfolio, they're sending them to us and saying, hey, you need to do a channel assessment with Eagle tac, and we kind of do like a ground up program with them. So there's, there's certainly that and a handful of folks that work that we're working with there, but it's also very large distribution partners, like I'm working with a client syntax, and in there, okay, I'm not under nondisclosure. They're, like, helping them build their entry into this space to kind of, you know, take their, their distribution bar partners, and bring them into the telco space, and then build a program to to attack the same thing. And then the other thing, like Ken referenced the investment side, there, you know, four or five different private equity firms that are out there. I mean, obviously, you guys are all seeing all the capital that is flowing to the market. And they're looking to folks like us to do what we call commercial diligence, right. So like, they have accountants, and they have finance, guys, but they don't know how to look at a base and say, like, is this base of customers, you know, a pile of crap? Is it all legacy stuff that, you know, or is it really attractive, you know, you know, go for business is the is the organization, you know, the leadership team, that that's in charge of this organization, they facilitated to kind of run this thing and taking the next level. So we're doing a bunch of that work, as well. So I mean, those are the two sides. I mean, and then certainly, sub aging partners on a smaller scale. I mean, as we know, like, that's really where I think we can do a lot of benefit to folks. But as you guys know, it's difficult for them to pay for, for things like that. So we dig in, and a lot of that we do is kind of a loss leader.
Yeah. And so, you know, we did some work recently with QoS networks, a company you guys know, well, a spinoff from the Sandler universe. But they're an emerging growing managed service provider. They have a great team smart people. They're growing tremendously, but they look for folks like us who kind of been there and understand the space to provide validation, some guidance, some recommendations, the thing that I find that people get to take advantage of when they talk to us now, because we're not affiliated with any one company now, which would obviously mean we would be preaching that one company, we get to give them a 360 view of what the world is. And we get to go on their behalf and talk to their customers, talk to their partners, talk to their vendors, talk to their employees, and say, Okay, here's, you know, here's the SWOT analysis on everything you're doing. Here are the areas to focus on. And we could just tee that up with an assessment or we could then take it to an execution phase with them and help them out and again, it's not that they don't have smart, bright people who could Do it. But they all have very full time jobs just managing what they're doing today. And so I have one partner, who's looking at us to help them build a account management account development program. And again, it's not that they couldn't do it on their own, they're common is that we're just a we prefer to be selling. And that's what we're doing. And we'll spend time with our top 5% of the customers. But the other 95 we're not touching, we don't have a program we don't have an understanding structure for. And that's something that, you know, with our backgrounds, we're able to step in, so kind of a diverse mix. And so
Sorry, Dustin, I just like to kind of put put a bow on that. I mean, the two kind of things that we do is that we come into companies, and we we allow them to work in their business while we work on it. So we take, like, we support the sales leadership team, like we do kind of, you know, we take this strategy, and we build tactics towards that. And I guess that's the second thing to learn tactics, like Ken referenced kind of these high end consulting firms, we're not those guys. Like our deal is like, how do we actually get stuff done. So like, you have a strategy, you have like a goal, you have something that you're working towards, we come in, and we build the tactics, the data driven tactics to go get that stuff done, versus the kind of pie in the sky, kind of, you know, Ernst and Young or, you know, boxing out salty group kind of pie consulting stuff? No, we don't do that. We're about like, kind of, let's get it done.
I mentioned them as a target. But several of those high end consulting companies come to us prayer is it really fits, you know, the expanded vertical that we have, certainly in the technology ministers.
For sure. I love that. I think that's so smart. I think there's a lot of good vision out there. But that execution, I mean, both of you guys just have execution, all in your backgrounds, and are really known for that in our space. So I can appreciate that. So they account management group that you're helping helping build out, Ken, is that for a sub agent? Or a master? Mini Master? Who what type of
Yeah. Did you say I was just following along with the, the nomenclature of master and sub everyone piano? Yeah, whether whether that fits on like, Oh, well, yeah, I'll call my selling partner, not too different than your gut, okay, you have a day, a big group of base, they're very good at that, you know, different skill sets in different areas. And, you know, they want to keep going it but they they're like realizing that they're not really watching, you know, the back door, you know, the lot of time on the front door, but not really watching the back door. And in today's world with the expanded products that you guys all have access to, I know you're another family world, there's a lot of other opportunity within the relationships you have. But it's, you know, again, smaller scale. So therefore, just like what you guys do, you know, you got to figure out how to best prioritize and leverage the technology that's available today, you have to do it in an organized fashion. So that gets to Kurt's comment about setting him up to execute. Right? Even though concepts are Okay, I understand the concept, but it's okay. But we're gonna lay out a roadmap for how you can execute,
When we might need to talk to you about an engagement. This podcast is already paying for itself is your time, your time, your time is being monetized already here.
Yeah, I absolutely love that model. Because there's, you know, slew of agents out there that are just the laptop and a cell phone as we like to call them out there selling. And the way the world is today, customer experience, customer service and expectations are just continuing to grow. And if you're not protecting or helping your clients, they're gonna get swept up by somebody else, right. We've seen that on the channel, like, with suppliers or vendors, you know, there's the TP, x's, there's 18 T's they're all trying to get in there as well. And if you're not Top of Mind, you're you're out of mind. And so protecting that revenue, having a system in place is something that doesn't I have been working on diligently for the past year and a half. And it absolutely is so key. And I love that you brought up Frank at POS because we're on a SD win sassy experience that we did with Sam, we're partners, and his name came up there. They are a sponsor of it. But his name came up again, because we remember him run around Caleb's office like setting up his velo cloud instance and getting it all figured out. And he was still there's an agency at that point. And then now to see where he's taking QoS. And he went from, you know, consulting to networks. And it's, it's amazing to see their growth. And it's great to see that they're working with you guys to help take them to another level that they can't maybe do on their own or they just need the expertise to get them from, you know, professionals have been in industry for 30 plus years. Awesome.
Yeah, no, it's great. We're happy to be working with them. And again, why go way back with them. I worked alongside them just like I work Long You guys and Dustin side by side on sales calls back in the day, helping my former company make some money, but we did the same, but the evolution of it is impressive. And it's not only, you know, it's now against a great organization with great financial backing and they hired a great team, the sales marketing channel leadership side and they already have the technical expertise. So anyway, that's that's a good example of a customer we'd love to do more with and, but there are others like them that we're working with. Sometimes they you know, they're they compete in a to a degree, everyone has their own story. And then there are other areas outside of you know, the SD, Wham space that we're working with.
So one of the things you mentioned during the as you're talking about, we guys are doing an eagle tech is just, you know, understanding the market, helping our clients get to where that their vision of where they want to go and seeing the changes happening. The big news this week that you know, we really want to talk about and kind of get your take on just what's going on in the world is the zoom five, nine merger acquisition for 14 point 7 billion I mean, that's, that's no joke. We've seen acquisitions in our space. Like, okay, well, they merge at $7 billion dollars. I mean, that's not they took a top tier Gartner quadrant right top right quadrant company and acquired them that's, it's no joke. So where are we going with this in this world? What's going on?
I told you, I told you it was coming. Alex, I predicted that zoom would limp into the contact center business at some point. Right. billion Yeah. But I'll tell you I mean, that would for me was a is a is a like kind of shot across the bow of everybody in the space. I think it is. 100% validates the concept of the communication stack. Like the idea like you know, Vonage was talking about that with API's contact center. Plus UCAS like this all belongs in the same place. And then the company that Vonage bought new voice media was was tied to Salesforce really tightly. So there's kind of CRM app through contact center with Ucass. And then API's wrapped around it, this idea of a communication stack. This to me validates that more than anything I've ever seen. I think it's, I think it's a shot across the bow to ring I think ring probably has to really kind of rev up talks with with nice incontact I think, I think it makes Cisco, everyone forgets about Cisco, everyone wants to talk about, you know, Microsoft, and certainly Microsoft Dynamics and teams, and everything they're doing with telephony, they're absolutely kind of in that same space collaboration first. But like Cisco, everyone forgets about Cisco, they all broadsoft they own WebEx, they I mean, they've got all the assets to do that kind of a play if they would just kind of come into the space and package it properly. But to your point, Alex, I mean, the biggest thing that says to me, is there's validation that customers are going to buy things from CRM up through all of their communications platforms.
Yeah, you know, usually you look at the combination is that a combination of you know, strengths, or that building a weakness, but it's really just a bring together a couple strengths and just making something stronger, right, obviously, zoom benefited from the meteoric rise of everybody working from home and leveraging their, you know, the tool that we're raising right now, and just easy collaboration, and that the branding of it to the band, you know, basically the band aid brand of video conferencing was explosive. And that value is obviously something that certainly helped fund, you know, this stock merger that they had. But they also launched into the eucast space and leveraging their technology and their position. And that was an entry into that, and it's very competitive space, a lot of good companies in there. But, you know, I think there's also validates how explosive, and we've seen it in the channel, you know, for several years, just, whenever you go to an award show, it was always the top winner either had a big infrastructure, the service sale, or the big contact center sale, that's it big revenue, they're very complex drives good revenue, the ARPU and five nines leadership position, that space, he instantly validate, you know, zoom as a credible player there. And again, they kind of they take advantage of the of the brand aspect that they may not know, outside of the universe of technology folks like ourselves, you know, who know the ins and outs, you know, zoom, everybody my daughter's wedding grade knows, you know, who zoom is, as our, you know, kids even younger than that in the space and grandmas and grandparents and everybody else out there. So, you know, the combinations great. And I think Kurt's point is just people being able to go to a provider who could help them solve those issues, and they all kind of interconnect, no contact center and video, which is what provides a better experience for the end user. Whether it's a customer of yours or whether it's your employee, and you know, this common seems to really put all, you know, put some key pieces together to get that done and do it well.
And just to piggyback on that, I mean, that complexity, I mean, this is the best news in the world for the channel, like, you know, trusted advisors, channel partners, agents, whatever call them, like it like this idea of the interoperability of all the different things we sell this, this is the best reason in the world for customers to always work with an agent versus going directly to carriers, does it does a customer does it, you know, do they want to go out and kind of find best and breed for this best of breed for that, and then try to figure out the interoperability, that at the end of the day, the sales partner is in the perfect position to say, I can go find you all this best of breed stuff tied together in a complete solution, that communication stack, whether it's a customer, what I mean, whether it's a provider that can deliver that kind of top to bottom, or whether it's cherry picking, because I mean, you guys have been in contact center deals, right? They're really kind of feature specific. There's like something that customer needs, right? And it becomes really obvious who the right provider is. So the sales partners ability to piece those things together is, you know, to me is it this is great news for the channel. Again, like I've been saying this for 30 years, but it's a great time to be in the channel.
It's a great time to be in the channel. Yeah, and so I can, I love how you said that it validated zoom in the voice space, I really felt like, and I called this out. Maybe like, just three months ago, I was talking to somebody, and I think it was somebody at five, nine, and I was like, zoom should by you. Or maybe it was that zoom, and I said that they should by one way or the other. So it is your idea. think they're getting credit for you and all the money. I heard that I'm waiting for a check, I don't actually want my name out there, I don't want publicity you know.
I just want half a point, just half a point, yeah,
there's a lot of synergy between the leadership team, they already had a partnership together at a time they knew each other. And you know, and obviously, that, you know, was all part of the dance of getting engaged before they're getting to go to the choir. But yeah, the fit is natural there, there would have been others do that could have been a you know, a bit. But this one was, you know, you know, a big name with great technology and known for delivering solutions and executing it on a service and support standpoint, again, that's that credibility is great, you know, zoom is, you know, wonderful, it's great automation, you don't really in the way I've used zoom, which is kind of like the masses out there. You know, when we interact with anybody, zoom right in with a website, click boom, and it goes nice and easy. On the voice side, you know, they get to manage that as well, you know, the contact center space is a lot more interactive, as far as customization design, you know, showing, you know, the capabilities of what you could do. And obviously, five nines has that, you know, infrastructure, and then some already available and, and, you know, listen, I get very disappointed when I go to a website, and I can't interact via text with somebody, or chat, you know, and it's, you know, here, send an email and until we get back to you, it's like, that's not gonna work in the same way as be able to pop up into a tele doc visit, you know, with a video with the doctor, instead of getting in my car and going down there, you know, especially even post pandemic, it's just ease of life, why would I do that? five, nine engine and the ukcat. And the seacat engine is taking advantage of all that in that growth. And it's really the future of how you interact with customers. It's the new front door, and AI just power the behind that. So anyway, yeah, five nines at the forefront of that zoom is at the forefront of what they're doing. The combination going to be powerful. I think it arms partners, arm customers, and both those companies pretty well.
Yeah, I think, you know, zoom caught five, nine at a really good spot. Because I'd say two, maybe three years ago, they're a little bit behind on their interest on how their network was provisioned, whether it might be with micro services versus data center based and you know, you're hearing chirps from any contact and talk desk and Genesis like oh, we're all built on micro services, it's more redundant, easier to scale that, that this is why five nine isn't, you know, as good as us. But then as they started to transition and get better and better, I think they caught in a good spot where they they're, they're just prime for having the right infrastructure. And now they're going with zoom, which is, you know, built in the cloud. So they've never even had, you know, the old infrastructure that these other carriers have had. And I think it's a good marriage and the cultures right I can think of, you know, other contact center companies that are not as big as the two big Genesis and in contact and I think the culture really fits well with zoom and five nine.
Yeah, again, culture wise back to the channel now. Have one which might be a good percent of your audience. They're both very channel centric, you know, zoom shows him SEO, full force after they've emerged as the National powerhouse that they are. And five nines has always been an ik So, so yeah, you know, that can't take that for granted because they understand the value of the independent distributor.
So and I think the thing that people don't talk about kind of the other lever that zoom has, you know, when you're trading at like a 90 to 120 multiple, when the market is trading at like three to 13 like that capital advantage is like massive, so they've, they've got the dollars to go out and do some of this stuff. That is just I mean, you know, beyond like, like people so underrate that kind of power that would like where rain is at a 70 where zoom is at 91 that kind of a multiple that capital that they have in play is I mean, that's a huge advantage to get stuff done
your job that helps them take out a market leader or not really kick out early, merged together, but he caught my attention. So broadvoice acquired a C cap company or partner with a C cap company, but again, it's a natural combination, you pass the cat ease of doing business, you know, Kurt mentioned, you know, Cisco underneath their WebEx, they have a powerful and, and they do have some retail partners. You know, it's more than just resale, but it's the engine that enables, you know, some pretty large companies out there, including my former company. But again, it's you know, to have another player who could piece that all together who has all the other ingredients. We talked about it. I think it was great.
Yeah, it really was Vonage. I just heard that Dialpad built a contact center from in house. I have not seen it personally, Alex, have you seen them in contact center?
It's in pieces of it. But yeah, they're definitely on the right track using AI in the omni channel and all that. But you know, one thing that I think this really solidifies and Kurt, you're talking about how it brings it all under one stack? Well, you look at Microsoft and how big they are. And they're they're in the collaboration game for sure. They're trying to get into the voice game. But they're doing it all through partnerships, whether it's, you know, through the native direct routing partner, like call tower evolve, and then they don't have contact center. And it's almost you're piecemealing it together. And we have a client that's going through the process right now that wants to go all teams. But there's Microsoft doesn't do voice, they're just outsourcing it on they bought medicine. Well, where do you see this? Like? Where do you see Microsoft and all this?
It's interesting to say that it's interesting you say that because I like I joke about Microsoft, that they have destroyed voice now three times. So they remember they launched link number link? Oh, yeah, it was like cycling pre Skype, they launched link, miss a mile because it just ignored the way people use voice. And they said, they were going to make everyone kind of use voice our way. And they said, you know, 120 years of legacy voice should go out the window. So they missed. So that then they bought Skype, and they broke it in Skype was a really good company. Excuse me, good platform. So now they go. Now we have they, they by Mehta switch kind of answering Cisco, Cisco, and they've got teams. So like COVID kind of drove this this video first thing and that's I think why teams is exploding. And I think it's a smart play for them as they're recognizing that voice isn't their deal. So they're doing these telephony hooks. So they're working, whether it's Vonage or whether to you know, call tower wall IP, like they're, they're finding partners that can kind of do the the, the the voice hook into their overall platform. I think, Alex, it's a function of the fact that they've failed miserably at voice over and over. But, I mean, you can't underestimate a, you know, a company that's worth a lot less like they have the resources to get it right. Or by someone and get it right eventually. So, like, because teams are struggling on The Voice side a little bit, that doesn't mean they're not going to dominate. Right?
Yeah. Right. When I, you know, talking to some partners, you know, during the similar time period of the pandemic and people having to adapt to work from home. And, you know, the comment was, is eucast exploded, probably took up 80% of their mind share right now, there are the features and services, of course, in this particular partner videos of that 90% had a team's conversation of the Parliament. And you know, it was just a couple years ago, where I lost I lost my first deal the Microsoft Teams, and I mean, I was like they they're gonna do what, and it was like a $40,000 nonprofit and I was like, I was right in our sweet spot, good communication collaboration, but their MSP partner talk about how they package it together, was going to leverage the CIP app sec elsewhere, pull it together, make it seamless, but you know, the company would have access to voice video collaboration all through the platform. That is embedded on their desks already and they're accustomed to and, you know, and in some cases already paying for those licenses, depending on how things are structured what they need to do. So yeah, they're, they're powerful. I think them and zoom, I think had the highest growth, play, I think ringcentral has always been pretty powerful. But they have the highest growth last year. And you know, even a curse point, they're still getting their legs onto them, which is what makes them even more dangerous on a go forward basis. But zoom in five nines is a is a damn worthy competitor.
For sure, you know, what's interesting about Microsoft that the other ones don't have is that they have dynamics, right? It's like, it's like having, like a horse or zoom at sale.
Well, Alex, that's, that's a really good point. Because this is the other one it was but this guy was the sleeper, Salesforce as the real sleeper. Like they didn't buy slack just so they could kind of, you know, get some telephony hooks and, and do some contact center work because they're already jumping into contact center. Salesforce is game has come all the way back to the seat, and they want to go CRM back to the seat. So like, that's, I mean, they're the one that no one's talking about. And I think they're probably the biggest threat to the kind of traditional UFC provider today. So I mean, that's a really good point.
But there's a lot of room a lot of growth in the marketplace. So even the more boutique eucast companies, the regional players, let alone some of the other big national players, they're all growing. They're all getting a lot of, you know, benefiting from the channel direct sales, leveraging web based, you know, lead gen.
Ken, you mentioned broadvoice, you know, and, you know, Jim Murphy in that in that group there, we would love those guys. I mean, it's just a dynamite company is always gonna be room for the company that can execute. Because at the end of the day, like people underestimate how important that voice seat is, like, like, I think the voice seats, the most important thing you have, like I always joke about kind of our industry, we sell voice and data services. 30 years ago, we sold voice and data services over TDM, and soundtracks and all that stuff. And 15 years ago, we started selling voice and data services over MPLS and integrated access. And five years ago, we started selling voice and data services over cloud solutions, and this and that, in five years from now we're gonna sell voice and data solutions or over pixie dust. But it's the same, the same group of agents are going to sell it that, that it's the solutions that matter, like how we deliver them, is less important than the solutions. And that's good news for all of us that are in this channel. Because like, you know, Ken and I were at, we were at an event a couple weeks ago in California, and we walked out, like, I've never felt older in my life, like, these people are so freakin smart. And they're talking about when solutions and all this stuff at the end of the day, it's still voice and data solutions and ancillary things around that, you know, like voice and data is now worked out to the edge. So we've got to get win solutions and all that kind of fun stuff. But like that voice see is still a huge component of that, like we work out from that, like we all still, whether we're picking up a phone, or whether we're on a you know, a flat phone on our PC, you know, as if it's this kind of this communication is what drives business. So that's always going to be the crux of what we do. And you know, the beauty is of all the things we're talking about, is that still central to what we're trying to do.
It absolutely is. And I couldn't agree more on even in my clients where they're like he were meetings first. They still, regardless still need a phone, nobody's saying like, we're not going to have a phone, right? Everybody still needs it. And they're still purchasing kind of the same amount that they have today. If they have 200 phones today. And they're making that transition from a PBX to a cloud, they're still getting 200 phones, it seems like so it's still an asset, business necessity, it's the way that business is done these days.
Yep, buddy, I'll get back to you know, people interacting with what and how they want to interact when and where they are. Right. So obviously, it's it's more the collaboration tool than versus the legacy, you know, phone systems that used to be out there and right. But that's the beauty of it is that we're now armed to do all that for customers, you know, and we, you know, when companies like zoom, and vibe nine just accelerated to imagine, you know, this pandemic occurring 1015 years ago. I don't know how would have been horrific. You know, when people you know, went from a Friday to a Monday or maybe they had about a month they got to get all the pieces together depending on where they were with their evolution. But it's, I couldn't even imagine how we could have managed it to the degree that we did as an economy as businesses as consumers without these tools, and And that's, you know, the acceleration is just going to keep on rolling.
So, oh, Kurt curse on mute, but he is talking with his hands. You look great.
That's what I do. Like I talked like this lady, the unsung hero of the pandemic, no one likes to talk about this is the broadband network, the cable providers, the telcos, the folks that were delivering, like, what you didn't hear was, you know, the stuff that we heard five years ago, where all the kids all came home from school on the bus and my, you know, internet, you know, went through the floor, because I'm in an ace, I have an asynchronous circuit, from, you know, Comcast, you didn't hear that and everyone joked about how they were over provisioning the network. You know, it seems silly, like, well, we're gonna, we're gonna send like a gig pipe to someone's house. Well, guess what? That that's the reason that this whole thing worked. The unsung hero of the pandemic. For me, it was the, you know, the broadband carriers.
Now, there was ironic that there was just a piece of what you said curse they'd actually got choppy broadband, a Wi Fi router. Maybe you haven't gotten huge bad pipes. But yeah, that was good timing to have that just show up to remind people.
Yeah, I think there was a power surge because my wife just went down to drop the boat off the lift, because we're gonna take Alex out and see if we can still do that.
I'm gonna make my way out there. Don't worry. We'll get on the lake there. So where do you see like, okay, so there's all this movement happening acquisitions, we see like the light a shot over the bow with zoom. I just the next prime, one I see is talkdesk. And they're so tightly integrated with Salesforce. Or you look at like, my, my tail, like, where are they in this game? there? They went and bought short tail sky, they're trying to get into this PPR the eucast. Better. And they're partnering with, you know, talkdesk, like, do you see like, Where do you think the next big acquisition will come from?
Yeah, Michael Keller, otherwise, I'd be stuck. Yeah.
Like mittel's the one that I think they're kind of in the top spot, like they even need to, because they're at the end of a p cycle two, so like, they have owners that want to sell them. And you know, what they need to do, like, they need to find a capital partner that makes them a buyer, because I really feel like kind of a legacy kind of that Avaya play, like they need, they need a capital partner that will go out and kind of buy a solution. Because it means they screwed up the pie backwards, like they bought in five, and that was, you know, short, lm five, that was gonna be a software plate, and they just didn't really execute on it, like, couldn't get away from from the hardware place. So,
Yeah, but their strengths are, you know, back to back the strength, they have brand, they have a customer base, they have a distribution, right. So that's, again, how they piece together something that's, you know, states that this is state of the art technology that, you know, keeping up with the changes the way, you know, five nines and zoom will do is, you know, they they're a lot closer to then seeing at that level than most but you know, that everyone's got to put those pieces together and whether it's acquisition or their own r&d work that they can do, you know, the buy build or, or even wholesaler partner, so a lot of big names out there. And But again, it's even a little company that just executes and leverages the relationships, they guess, you know, some powered by, you know, sometimes as, as just a good way to go to market with a customer, as it is to be the company. And that's where Cisco is intriguing, because obviously, they go through, you know, partners for that. But they have a pretty good brand recognition as well. And they certainly have funds for acquisition. So don't know, don't get invited to those meetings.
I'll predict the next one, but I'll let you guys in on it for for my next prediction. I don't have it your eye Slack, or I'm sorry, Salesforce doesn't seem out of the question in any way, shape, or form. They did spend $27.7 billion on IBM technology, which has been around for years, like 100 years, at least 100 technology years. So they are cash rich, and they definitely I could see them hopping into this space and gobbling somebody out. That's smaller mid size.
Could you imagine Dustin, can you imagine if they grab top desk with everything? Like if right?
As talked about earlier. Right? It'd be
I'd be scary.
Talk desk or Dialpad all the dialpad. Yeah, there's there's a handful of or Genesys like they could go big they could do like a Genesys deal so, Yeah, for sure. Yeah, it's interesting times, we've talked about them the amount of dollars coming in kind of on the supplier side of things. What is your guys's feelings on key money coming in to some of the masters and some of the even startups that are happening or kind of growing in our space?
I hadn't heard is there is there private equity money coming? It was written in my notes, I don't even know that I don't even understand that. That's crazy. That's crazy. Talk to us. And everybody, everyone knows, there's no way you can sell. There's no recurring revenue business because you don't own the customer. So the remarkable that the capital will never come to this business. Until it does, right. Yeah.
And I think we're in touch with pretty much all the players out there. And you know, Kurt's got one particular, you know, big investor out there, who the out there, it's in the space, because of the value that's been created to go through the value in the ecosystem that it plays out in helping clients work through all the different changes in technology that could help their businesses be more productive, and more and more and more efficient to their customers, employees. So you know, there is real money out there. And there are some who haven't even entered yet that are saying we want to enter, and it looks different models, sometimes sometimes it is the master roll ups, which again, is ex left out there. But you know, that's out there. But then even like, just, you know, you know, the individual selling partners, we just were talking about the call about sub agent, and I kind of use the word selling partner, to me, that's the person who sells it to the customer. Right. And typically, they team up with the master distributors, you know, out there to have access to the scope of, of solution providers and some of the other resources that are made available from education, training, etc. But, you know, it's, uh, you know, there's a lot of businesses, but it all depends, you know, they're all serious players with with some good money, and they're smart people. And, and they, those are folks, you know, so they compound come to the current myself on my partners. Again, because we've been in the space we've been in the in the rooms and meetings and sales, we've been at the channel partner shows, and, you know, when we can kind of help provide them, you know, here's why this, you know, would work or could work or maybe won't work.
Yeah. You know, kind of alluded to it, but I work as
Part of a private equity firm out of New York who wants to come into this space, and they want to bring me old barrels full of money into this space. And like, I'll be on a call tonight, at 430. Eastern, on a Friday afternoon. That's where you, you know, it's important if I'm going to get a call at 430 on a Friday, when I should be out in the lake Alex, but like my my call, my presentation to them is about why they should go to a multiple they've never paid before in this business like these, these people are paying more aggressively in our space than they've ever paid anywhere else. And it's because they understand how profitable we can be here.
Yeah. And we're low churn. So it's reoccurring revenue, low churn, what is what are you guys seeing for churn kind of as an industry average out there?
Well, it's, it's funny to say that Dustin, because it's like churn isn't even really a factor. Like, when you look at our businesses, aggregate, you take any, any, any agency avail, you can, if you can eliminate new logo, take your logo out, the existing base, actually stays flat or grows, like works in average compound annual growth rates of like three to 5% on just legacy customers, like so. It literally if you do everything wrong and buy a business in this space, you're going to get your money back, it just might take you longer. If you get synergies you accelerate. It's literally a perfect revenue model. It's the most these are the most resilient businesses, that folks coming from outside the most resilient cash streams that ever seen.
Yeah, and and it's not like you, you, I don't know, you can find one out of 1000 companies that are spending less on technology today than they were five years ago than they were 10 years ago than they were 15 years ago. Right? Like everybody is looking for that competitive advantage and that competitive advantages, typically in some sort of technology, and then what we're really hearing a lot about is, hey, it gave us a competitive advantage. Now how do we secure it and that is just all the additional dollars spent in all of our space, right? It's every single time magic.
Yeah, it's magic dust and like I always talk about, like, I operate from fear. Because I'm a scared little kid in a business suit. I say that I guess I'm in a T shirt and a baseball cap. But so like, you know, recurring revenue has always been like, you know, the thought of selling something and having to start over at the end of the month scared the hell out of me. So I always worked in recurring revenue. So that but then when you look at these bases, and these incredibly resilient bases, I mean, there's, there's nothing like it, like, you know, and so you think about, like what you said, we can sell more things to them, right. So we have customer, that's our, that's our part of span. So now we can sell we sold them, you know, access, we're selling them a voice seat, we're selling them contact center, we're selling maybe security and we're selling them edge here. Well, that's great linearly, but north south, because of all these things are selling, we can now sell large customers too. And we can make smaller customers profitable because we can sell enough to them. So that north south axis and that East West axis, that's geometric growth, like that's where we're at in China right now. And that's why that's why the guys with capital are running here with wheelbarrows. And I'll say this stuff out there is don't sell short, like, be conscious, understand what you understand what you're doing, be intentional about we do, but don't just sell because you want to take a couple of chips off the table? Because I think your businesses are all worth more than five years in there today.
Yeah, I think it is, I know, what you find is, you know, again, everybody depends on where they're at in their life, what they're looking to do in this phase of life, and what those business ventures are family and life ventures they have, but it's, you know, what we've found is kind of being in the middle, right, is that, you know, we can provide a perspective for a selling partner to say, Hey, I hear this going on, I'm a little wary. But, you know, who should I talk to, you know, what should I expect? You know, and we can provide a kind of melt and play that kind of guidance for them, as well as working with the biggest shops to say, Hey, who would be the types of partners to talk to and, but it would be interesting, so we kind of fill the gap that the trusted advisors that you guys are, play with customers is that have a lot of vendors out there, and solutions, MIT, but I got to understand what you are what you're looking to do, and you provide that, you know, unbiased perspective, and, and do it again, outside of that bubble. And that, you know, we found ourselves in that spot in what is a very hot market, because of what you've heard talk about money.
It's, it's incredible. I feel like just gone to channel partners for the past 10 years or whatever. It was kind of a ragtag group. And there were 1000 of us now it's 5000, or whatever those numbers are. It's huge growth. And then you saw x four, get purchased by Sandler partners that kind of started that that master agency, a little bit of consolidation in telesis and scansource. And, you know, the other
Yeah, that other deal that Yeah, the other deal kind of knocked us off the front page, like because, yeah, this this came along. But we started,
you started it, you pulled it out, for sure. And he that avalanche was there to follow? Um, you know, I think there's gonna be folks like Alex and I out there that are going to be watching this what is, uh, what traditionally has been the multiplier that we could use on a business like ours? And where do you see that going?
Well, I'll tell you, like prepping it before we get a ton of the multiple is. The first thing is the reason your business is valuable is because you do good work. So don't forget to do the good work. I mean, I had a guy call me like three weeks ago, asking me what he could get for his business. And he started telling me about his business. And he had, he had, you know, he had like, 15,000 a month in residual commissions coming in. And he's like, so what should I do? And I'm like, you should go sell more stuff is what you should do. You should build your business and have have a dynamite business. Don't worry about it. Even though like your EBITDA does matter. What you do is you sell customers build your business, and keep your ears open, and opportunities will come but if you if you know your small business owner, we all left the carriers for a reason. We all left the providers roasters of our own domain. You know, he's an old Seinfeld reference. So don't forget what major is valuable. But as far as we're seeing, certainly like a straight agency, if the if the if the owner doesn't come with it. It's a financial purchase, it's a residual purchase. And it's that's a, that's a three to five at most, on a real earnings number. Yeah, it's not it's not like people like there's some there's some unrealistic stuff like everyone talks about the intelisys. multiple people forget that in telesis, the last five terms that they got their multiple they earned after that was not the perfect price that was they earned that over four years, that was a long tail. So like, Pete, when people start talking about 14 1516, multiple those that that doesn't exist for but for an agency, like if you have two to 5 million in EBITDA, like I think that you're, you know, personally, I think you're selling short if you don't get six, but I don't know if he can get six. Okay, I think you're better off. Like, if all you had was 6000 I think you're better off running your business. And, you know, sunsetting it, you know, hiring someone to come into the shop.
Yeah. Ken, do you have anything to add to that?
No, I think yeah, I mean, Kurt, pretty much, you know, stay that perspective, you know, I think, you know, then there's some folks like in your position that are still looking to take some money off the table, if you will, or maybe to invest it in some other aspect of of your life for your business. Well, there are other vehicles besides selling your your partnership, so there's financial services, arms of pretty much every master agency out there, and even some of these new investors coming in, where you're not selling the business, I'll lose control of the business, but you're getting an infusion of money that you can take to use elsewhere. So that's, you know, you're kind of seeing that as another option out there. You saw the announcement, and, you know, Nexus, the old blind at a Dallas, you know, did something similar with with App smart, or they did get acquired by smart, which had been what you see some of the other big brands that they acquired. They said, No, no, no, we own our business. 100% but they got money. In his case, he bought out an investor, you know, one of his partners, and, and using it for other areas of growth that he sees, and, but you know, like, you guys, he's in Ghana, they're in the prime of what they're doing. They're good at it, they they enjoy it. And you know, they've created a nice lifestyle for themselves and their employees. And they're basically using money to, you know, double down in different areas. But you know, some money off the table for for life and family or other business investments.
Yeah, I mean, just be intentional. Just be intentional. If you want capital, go find capital and be intentional. If you want to build your business, build your business and be intentional about it. So you don't have families conversations, because the most distracting thing in the world, your business is to go through diligence and not do a deal. You know, you got to focus now going back to this you gotta you got to go do business. You got to go sell customers. That's right.
Wow, this has been so fun. I know that we're already out at time. I think we only got through two out of my 10 questions. I think we could hang out with you guys a lot more. We should definitely do this again.
we should meet at Curt's lake house. Yeah, we could
Will be remote. I'll do it there. We've definitely broke the rod on this podcast, but I knew we would have there's so much to talk about. And we're all just like catching up at the same time too. But Ken and Curt guys, so good having you on Thank you so much. And we're definitely have you guys on again. This was fun. We'll find some other great topics down the road on enjoy the lake. Enjoy.
Let's do it on the boat next time, Alex.
On the boat.
Yeah, I'm ready. Love it.
I'll do it. Behind the boat with he microphone
First floating podcast. I like it.
Well, that wraps up the show for today. Thanks for joining. And don't forget to join us next week as we bring another guest in to talk about the trends around cloud contact center and customer experience. Also, you can find us at Adler, advisors.com, LinkedIn, or your favorite podcast platform. We'll see you next week on another cloud podcast.