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.
The Beginner's Guide to Buying Telecom Services
with Adler Advisors Partner, Alex Riedel
Don't have time to listen? Read the full transcription.
Host: Alex McBratney (00:03):
Hello and welcome to 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. All right, Dustin, good to see you bud. How have you been?
Guest: Dustin Riedel (00:21):
Doing well, thank you very much, Alex. How have you been?
Host: Alex McBratney (00:24):
Can't complain. You know, it's interesting we were talking about MPLS and you look at carriers like Lumen, AT&T, Verizon and how they're in this position of having to write down their business just to keep that client. So, they're taking that MPLS client, moving them to SD-WAN, whether it's VeloCloud or any of the others that they've partnered with to do that. And it's turning into more of a managed service type solution. I mean, the circuits are circuits. Being what they are, but after that, it's okay. Well now we're managing their SD-WAN and it's not so much the client managing all these firewalls and you know, this hardware on site, it's the actual carrier.
Guest: Dustin Riedel (01:05):
I think you're bringing up an interesting point there, because I think there's just like everything. There's a couple of different ways that you can do this. But what I hated about MPLS back in the day was as a client of MPLS, your only option was to call in and open up a ticket and then call and escalate that ticket and yell at the carriers. Does that make sense? For sure. And carriers, as you know, are not the most responsive or the easiest to handle or work with. The joke is that if AT&T started a hospital, they would violate all of the things you'd have, you know, people that had surgery and their arms would be coming out of their heads and they'd be shut down by the next day. Right? Like they just mess everything up. It's a good thing that they hadn't started in the hospital industry.
Host: Alex McBratney (02:00):
You change surgeons mid surgery.
Guest: Dustin Riedel (02:03):
Yeah. Yes, exactly. Like one of the things that I love about SD-WAN is that you can have a non-traditional carrier handle the SD-WAN for you. Let me give you an example. So like Cato, so you could literally put AT&T fiber in there. You could put spectrum coax as a backup and then you have, and those are just dumb circuits, right? It's a, literally coax into a modem, it's fiber into a router, completely dumb. It's either up or down AT&T spectrum. We're not seeing the internet come through, go fix it. That's all that we want from the carriers. And then you have the super-intelligent box that sits out on your edge and that intelligent box could be owned and run by your internal team or you could have kind of that level one level two type stuff being run by an outside organization. So it gives you that flexibility. What I like about it is it takes all the intelligence out of the carrier and it brings it into a more responsive company like a Cato. Does that make sense? And Cato is just the one that we're picking on here today. There's plenty of other companies that do that as a service. But I do love that model because you're not waiting in line for an hour and a half to talk to a level one tech at one of the big carriers.
Host: Alex McBratney (03:29):
Right. And because there are multiple options, as we know with SD-WAN providers, not just Cato or there's Big Leaf, Tello, Silver Peak, all of them. Right. And so the big question becomes now is, well, what if you hitch your wagon to a certain carrier? They typically only have one that they've hitched their wagon, too. Right. One of the big ones. So now it becomes, you're working with the direct rep at a carrier and they can only pitch one. But how do you know that that's the best SD-WAN solution for your company?
Guest: Dustin Riedel (03:59):
It sounds like you're leading towards a broker question
Host: Alex McBratney (04:01):
A little bit, a little bit. Why work with a direct rep when there's 6 to 10 different SD-WAN providers out there. How do you know which one to go to because Lumen or AT&T only pitches one.
Guest: Dustin Riedel (04:14):
And it's absolutely true. And you know, our goal as a broker is to understand our specific client's needs and then be able to find the best option for that specific client. So like, just before you invited me on this podcast, we were trying to decide between Meraki and Fortinet for a specific client, but they're really small. They don't need a lot from their firewall. They're not in a high risk industry, it's brick and mortar, pretty simple business. And the Meraki's just so much easier, end-user friendly, throw VPNs on it so people can work from home. It seemed like the right decision for them and it was more cost effective. So we're always, as a broker, as a consultant, I'm always trying to figure out what it is that's best for the person that I'm sitting in front of right now, right? Because our goal is to align ourselves with the long-term vision of the organization and the business outcomes that they're looking for. I'm not married to a box. , I think there's plenty of great box makers out there. I think Cato, Palo Alto, Fortinet, Meraki, but they're all different. I mean, you mentioned the name Big Leaf before. How interesting Big Leaf, as of the last that I heard, they're just doing SD-WAN. They're not even heading down the sassy route. They're literally like we're going to do one thing just wanted and do better than anybody else. We're going to do the SD-WAN part, the whole security, everything else is someone else's, it's another box’s problems. So it's a really interesting model and there's just so many different ways to do this and it's not a one size fits all.
Host: Alex McBratney (06:08):
Yeah. It almost seems like SD as a service model, because it's becoming so simple to deploy. You find your SD- Wan provider, say it's a Big Leaf that only does SD-WAN. Well now it's like, well, what do I do for security? Right. Over and above say like what a normal firewall can do. And then you go find your supplier over there. And typically it's a managed service security provider, and they'll walk you through, start to finish and ongoing support with security. So then it's just plugging in these different systems. But I think that's where you see a big difference with the direct rep versus working with a broker is that they don't know what they don't know. Only what's only the Kool-Aid that they've been forced to drink for during onboarding and sales kickoff meetings. Hey, go with this. This is the best. Then they start drinking that Kool-Aid they get all hyped, not realizing that there actually is competition out there that is as good and a lot of times can be better than it than what the direct reps sell. So it's a really hard line to tow when a lot of salespeople that are good salespeople still want to do what's right for the client, but are forced into not doing what's right for the client, because they can only push one solution.
Guest: Dustin Riedel (07:18):
Yeah. It all comes down to Comp plan, right? Yeah. They're incented to sell for the brand that they're employed by. And there is no incentive to find the right solution. Whereas for guys like you and I, we're blessed to be in a spot where it's like, Hey, we're on your side of the desk. We're going to go out. We already know we already have an idea of what the market has. We'll narrow it down to those top three and then let's get in the weeds and really find out who's best going to align with your goals and get you a great solution. So, it's just impossible to do that when you have one thing. I mean, before I was, here on the broker side of things, we were selling just one phone system. It was a ShoreTel phone system. And I remember walking into a building down in San Diego and the guy came out and he was literally wearing a Cisco shirt. And he gave us the run around for like three meetings and then straight up ghosted us. And I was like, dude, if you just wanted some pricing to beat up Cisco, like just shoot me an email, send me pricing for a bunch of phones. Save me the time, energy and effort. But it was a deal that we were never going to win. And I was trying to fit a ShoreTel system into a complete Cisco environment. And it was just never going to happen. Right. Whereas, when you have all of those different options, you come in like, Hey, what do we love? What do we hate? One of my favorite things about having all of these options, you and I have been on calls when we do this, I love asking the question upfront to the client being like, Hey are there any carriers that you hate? Oh yeah. At my last job, these guys were really, you know, they took down the whole network for a day. Don't quote them. Okay, great. We'll take them off the list. And then when we're presenting quotes, we can give the good, bad and the ugly about these different options that are out there. Right? So it's not, we don't have to paint the picture that like, Hey, if you go with this one supplier, everything's going to be rosy for the rest of your life. It's like, Hey, this is the pros and cons of working with the biggest UCaaS provider. Ring Central, you know, they're fairly organized, but they're not very nimble. And it's hard to be nimble when you're a huge organization. That's just the nature of it. Dialpad, I kind of have a little bit of a technology crush on Dialpad right now. They are claiming to be UCaaS 3.0, right? Like this whole next level. But it's, you know, they're not even really talking about polycom phones at one point, they weren't doing any handsets on the desk. They just like, didn't do it at all. They're like, everything's going mobile. Now they have that option to do it. But I just think that you can say like, Hey, Dialpad is really good at this, but they're not as strong at this. And you can give both sides of it.
Host: Alex McBratney (10:23):
Yeah. And that's a good point because when VOIP was first coming on the market, it was all a me, too. They pretty much all had the same features. There wasn't a lot to distinguish one carrier from the other. Ring really was able to do that early on by having everything where everyone else was playing catch-up. But now, like you see at Dialpad and you'd see these carriers looking at how they can differentiate as technology has grown with AI as with Dialpad. They're video conferencing, they're adding more where you can track if people are not paying attention, they're doing transcripts and so they're taking that Zoom call and they're taking it to the next level of adding a lot more value. So it does differentiate them because they have to.
Guest: Dustin Riedel (11:06):
Absolutely have to. Yeah. It's a really fun time to be in this space. There's a lot going on and I would not want to be an IT director, VP, CIO, just like trying to navigate these waters by myself without anybody to come alongside me and just kind of help me navigate the waters because there's carriers that were doing a really good job two years ago are terrible right now. Just their installs are getting ripped out left and right. And then there's carriers that you and I wouldn't have proposed a couple of years back that are kind of top of the list, in front of mind.
Host: Alex McBratney (11:50):
Some are listed and they have big investors behind them. They're buying up other companies and make themselves better. And where I'm seeing a big change with that is you have all these UCaaS providers that are now, well, we have to have a context in our solution. Right? What are we going to do about that? Do you partner with one of the big call it the big two Genesis or Incontact or TalkUs, or do you acquire a smaller company that doesn't really have the name brand recognition, but it's all home-baked and you own it.
Guest: Dustin Riedel (12:21):
Own it. Where do you see UCaaS, like going over the next couple of years?
Host: Alex McBratney (12:28):
In a way, I see it going to be like a commodity like circuits, if you don't innovate and change. If you just stay stagnant and stay with those me, too features like a lot of the cable coz have come out with solutions like that. But I think the big ones are looking towards AI. They're looking towards bringing in a contact center, they're getting better at their collaboration. So it's not just, I mean, look at RingCentral, getting away from Zoom and having their own collaboration now. But you know, one of the biggest disruptors right now that we haven't mentioned is Microsoft teams and where that's going and how every carrier, UCaaS carrier is scrambling to get direct integration, direct routing with Microsoft teams and where and how that's going to disrupt.
Guest: Dustin Riedel (13:18):
It's absolutely already disrupting - IM, web chat, web video. Like it's pretty impressive what they've done. And then you just overlay some voice over the top of it.
Host: Alex McBratney (13:32):
Where does Cisco go wrong with WebEx? I mean, it feels, I mean, sorry if Cisco guys are listening, but right? Like what went wrong?
Guest: Dustin Riedel (13:44):
I'm going to shoot from the hip here. I don't have a patio shirt. It's yeah. It's one man's opinion. Here's what I think though is, WebEx was like the only option at one point, wasn't it? Like 2001, it was WebEx. I worked for a competitor called Centra software back in the day and we were mainly focused on (kind of) the education side. So it was like, Hey, how do we do these types of calls? And then save it into a repository, blah, blah, blah. When you get hired as a podcaster, you get to take Alex and Dustin one on one and like, you can save it that way. But WebEx was huge, came onto the space, blew everybody else out of the water. I did a lot of WebEx. I don't know. I guess the guy from Zoom was at WebEx. He was like, we've got to make this cleaner and better. And they're like, it's fine. We're good. We are the number one guys out there and he's like, yeah, that's fine. I'll go start my own. Fast forward a couple of years, and you know there are stocks trading at a good zillion dollars and it's being used by every school on the planet.
Host: Alex McBratney (15:05):
I think it goes into the companies that are trying to be nimble and change, but they're so big. It's hard. I mean, Cisco's a hardware provider. They have their Cisco PBX, they have their other hardware, their ASAs. And that was like going into the cloud right. Where you have companies like Ring and Vonage that started in the cloud or Born in the Cloud. And just like zoom, right? So you have a company that just has a completely different mindset. This is more of a hardware side versus a software. And that's probably where Microsoft on the software side was able to win with teams because they already know, they know that model.
Guest: Dustin Riedel (15:43):
Yeah. I liked that. I absolutely think that's the case when it comes to the Cisco side, they make a lot of, a lot, a lot of money in their model and this is just kind of a different model for them. So they're definitely playing some catch up for sure. Yeah. And I know they're pushing hard on WebEx. Some of our carriers TPX specifically works with Cisco. And so they're rebranding everything, their whole phone system as WebEx and then the contact center as WebEx contact center. Cisco has like a cult following. I never joined that cult. So I'm not a full on ABC guy, like anything but Cisco ABC, but I am probably heading that way. I don't know. It's just too much. All the cool kids love Cisco and I think they make great LAN and WAN stuff, but I'm definitely not the guy that's going to go out and get a Cisco tattoo anytime soon.
Host: Alex McBratney (16:48):
Yeah. They love the enterprise. And I think that's where they survive right now.
Guest: Dustin Riedel (16:55):
Yeah. And it's wildly complicated. Right? It's super hard. It takes a lot of brain power, manpower to set up and maintain, but is also super flexible. It can do anything and everything that you possibly wanted to do. So it's a great enterprise solution.
Host: Alex McBratney (17:15):
Exactly. And that's where we see in the mid-market where as a service solution, whether it's UCaaS or contact center or SD-WANs can be offloaded, frees up time for the IT department. So they don't have to hire more people, the program, whatever it is, they need a program.
Guest: Dustin Riedel (17:34):
So I was on a call yesterday. I haven't told you this story. I was on a call yesterday as a service we're on with Call Tower. Call Tower is like in their presentation, they've got a couple of different slides, #1 is like, Who We Are, #2 is like you can get this from Microsoft Direct, #3 is you can build this yourself. My client was literally like, no skip. I don't want to hear it. I don't want it. Pass. And then it's like, Hey, we've already built this out. We've been doing this for the past 20 years. We built it out on Skype. We built it out on MS Teams. We know how to do it, just leverage us. And he's like, that's the one that I want. Get it out of my world, into your world. Here's a credit card. Let's get moving
Host: Alex McBratney (18:25):
Easy button right there. And that's where Call Tower definitely hitched their wagon to like that one solution. Right. And just made it. And it's worked great. And it's hard to beat their offering. And there's no one else that can really do it as well as them at the moment.
Guest: Dustin Riedel (18:42):
I definitely think they're a leader in that space. And they just have so much telecom knowledge across all of the different platforms that they represent. MS Teams being the one that is just taking over the whole entire space. For sure. And like you said, all the UCAS providers are like, Hey, we integrate with MST, right? Like, cool.
Host: Alex McBratney (19:03):
Through a third party half the time, which they don't tell you
Guest: Dustin Riedel (19:08):
The hidden secrets that we know as brokers, that direct sales reps don't want to tell. Right.
Host: Alex McBratney (19:13):
It's a direct integration. Ish. Yeah, absolutely. Well, you need to know what the truth is out there. Right. And that's, what we try to provide for a client. So, the next two to three years, where do you see it going? You asked me that earlier. How about you?
Guest: Dustin Riedel (19:30):
I expect to see some consolidation. I don't know exactly what that looks like. I see a little bit of price compression, but I don't think we're there yet. You know, I feel like you see price compression, like maybe at the end of the decade, we'll see more price compression. It's still a wildly profitable space and there's still so much more opportunity. Right? Let's say that even the high number that I have seen is that it's 35% penetrated the market. So it's still 65% of people have not moved to this. And out of the projects that I'm working on right now, the vast majority of them are not on a UCaaS cloud solution. They're on premise solutions, right. I'm seeing that 65% number be pretty accurate. I don't think we're going to get a ton of compression until we have 80, 90% market penetration, which should happen in the next three to five years. Vonage, Ring, LogMeIn, 8x8, Fused, Dialpad. Any of those guys would gobble up a couple of players just to get the market share and customer base. We haven't seen it and I think one of the reasons we haven't seen it is because it still is so profitable. Right. You know, Hey, if I'm a small guy in this space, it's like, Hey, we've only got a couple thousand users, but we're still making huge profit numbers. So why go anywhere? Right? Like let's just keep making the money, sell some more. I do think that there is going to be more technology pushed into this going forward, just like the AI transcription, engagement, numbers, and stats. When you're running stuff. I know that some of the webinar platforms have that Zoom. And I think the LogMeIn one has it already, always a little sad when you do a webinar and then you find out that only half the people were paying attention for half of the time.
Host: Alex McBratney (21:34):
At least you can change your approach, right? And start doing a song and dance, get the maracas, right. And get people to listen. Well, Dustin, it's been a pleasure. You are the inaugural guests on our Another Cloud Podcast Episode 1. I was here at the beginning. We'll get you on a kennel and we'll continue to talk, shop and bring some other standard guys on and looking forward to it. Sounds good. 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 adleradvisors.com, LinkedIn, or your favorite podcast platform. See you next week on Another Cloud Podcast.