CXTech Week 1 2020, News and Analysis

The purpose of this CXTech Week 1 2020 newsletter is to highlight, with commentary, some of the news stories in CXTech this week. What is CXTech?  The C stands for Connectivity, Communications, Collaboration, Conversation, Customer; X for Experience because that’s what matters; and Tech because the focus is enablers.

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Happy New Year!

Deeper Dive into the Open Source Telecom Software Project Survey

While the news cycle was at a low, and when I had a little spare time, I managed to get the results from the Open Source Telecom Software Project Survey that began in May 2019. I shared all the results immediately with everyone who contributed to the survey. This weblog presents the results with some analysis for everyone to see, as promised in my presentations at TADSummit Americas and TADSummit EMEA.

My request to everyone who reviews the material is:

  • If I’ve missed any relevant projects please let me know;
  • Please ask questions / issues arising from this work; and
  • Please suggest topics / questions we should include in a 2020 survey, thank you.

Open source projects are a critical part of the web’s success. As programmable telecoms becomes democratized, as explained in the Astricon Keynote, open source projects are of increasing importance to the telecoms / communications industries. Telcos have tended to shy away from open source telecom software, rather adopting retro-closed source solutions (e.g. IMS and RCS). But even there, open source has made its way in creating greater innovation and lower pricing, thanks to companies like ng-voice.

Most CPaaS / UCaaS / CCaaS providers use open source telecom software projects listed in this survey. Many of the tech-savvy providers have either forked a project, or are confident of being able to fork with no risk. A few of the bigger ones, like Twilio began on open source with Asterisk and FreeSWITCH, but have since built out their closed source platform. This is not a winners takes all business, it’s a dynamic market, meeting a plethora of evolving needs. Where exceptionally smart technologist continue to create and share software that makes the world better.

Given the above importance I wanted to provide to a broader audience an understanding of Open Source Telecom Software Project landscape.

 

CXTech Market Sizing and Landscape

At TADSummit EMEA I presented some slides on  “By The Numbers: CPaaS, UCaaS, CCaaS Landscapes and Market Sizing.” Its a straight forward bottom-up build of the market size with lots of revenue guesstimates – never believe what people tell you about their companies 😉 Of most interest were the slides on the CXTech landscape and CXTech market sizing across the segments studied. As promised this weblog provides the tables that go behind the market sizing and landscapes. I’ve included revenues, growth estimates and in some cases employee numbers.

 

TADHack-mini Phoenix, 1-2 February, with Avaya ENGAGE

Since 2017, as the year comes to a close I think, perhaps we’ll just do TADHack Global next year. And then market demand keeps adding locations and new events. This year we have a new event, TADHack-mini Phoenix, just before Avaya ENGAGE, hosted by Avaya and the International Avaya User Group (IAUG). Avaya ENGAGE 2020 brings you four days of workshops, inspirational speakers, and experts. One of their keynote speakers is Earvin “Magic” Johnson, NBA Hall of Famer and Entrepreneur!

For Avaya ENGAGE attendees you get hands-on experience with communication APIs, and much more. You’ll experience first-hand how programmable communications can solve a variety of problems, and network with local developers to witness the power of programmable communications from Avaya.

For those not attending Avaya ENGAGE you get to build your portfolio of skills in programmable communication that will be in demand for the next decade.

We encourage people who cannot attend TADHack in person in Phoenix to take part remotely. We accept remote entries.

Winners and runners up from TADHack-mini Phoenix can pitch at Avaya ENGAGE for even greater exposure! We have a session dedicated to the TADHack Winners where the prizes will be given. You also get free entry to Avaya ENGAGE, perhaps you’ll meet Magic Johnson?

TADHack is all about learning, sharing, coding, creating, and most importantly having fun with a diverse group of people. And if that is not enough to entice you, we have lots of cash prizes ($15k), free entry, and free food.

 

Enghouse Systems Buys Dialogic for $52M

I know what you’re thinking. Wait a minute, didn’t Sangoma buy Dialogic back in 2018? That was the Converged Communications Division of Dialogic. We’ll be seeing lots more such transactions through 2020.

Dialogic was founded in 1983 in Parsippany, New Jersey by Nicholas Zwick, James Shinn, and Kenneth Burkhardt. In 1999, at the height of the dot-com era, the company was acquired by Intel for $780 million. In 2006, Eicon (Canadian communications supplier) bought the Media & Signaling Division of Intel and then changed its name back to Dialogic, the rumor back than was at about 20% of the price Intel paid.

Since the reformation of Dialogic, other competitors have been acquired and merged into the company, including NMS Communications and Cantata. The latter was itself a collection of companies including Brooktrout and Excel Switching.

In 2010, Dialogic merged with Veraz Networks (tier 2 softswitch). Then in 2014, Dialogic was acquired by Novacap, a Canadian private equity firm. In 2016, Dialogic acquired Apex Communications, a TADSummit sponsor. The company launched an application development practice for networked, premises and cloud-based applications. The line of applications include WebRTC, unified communications, IVR, on-demand voicemail, and cloud-based PBX.

In January 2018, Sangoma acquired the assets of the Converged Communication Division (CCD) from Dialogic. By divesting its CCD hardware business, Dialogic became a software-centric company. And now Enghouse acquired the remaining piece.

 

Zoom Will Have To Do Much Better Than Analyst Expectations

Solid analysis of Zoom’s situation. I’ve seen international growth, especially thanks to partnerships prove a good growth path. Up-sell to UC has been surprisingly solid as well. So while the maintenance of the valuation multiple will be challenging in 2020. There’s lots of growth potential in the long term. Freemium and a focus on making it easy for the customers’ many possible journeys through the growing and increasingly complex portfolio is helping compared to the competition that uses buzzwords and laundry-lists of features.

Another aspect that’s helped Zoom is Google stopping Hangout on Air. It was a great way to stream a live video conference / presentation and record it for later viewing (when most views happen). We used it often for TADHack and TADSummit. When Hangouts on Air stopped we moved to recording the sessions with Zoom then publishing. There are many options available, but the quickest and easiest was move to a paid Zoom play from free, record the session, then publish. Easy matters, especially when it takes just a couple of minutes to set-up.

 

Sangoma Technologies Has Further To Run On A Shift To The Cloud

Another solid piece of analysis on Sangoma. Personally, I think a couple of acquisitions are likely, especially those that help the broad portfolio of Sangoma reach more customers faster.

 

4 Small-Cap Tech Stocks That Could Be Poised for Growth in 2020

Expect to hear much more from Vonage and Bandwidth in 2020. See article below on Bandwidth.

 

Bandwidth Sees Unusually High Options Volume

Bandwidth Inc saw unusually large options trading activity on Monday 30th Dec. Stock traders purchased 1,218 call options on the company. This is an increase of 1,224% compared to the average daily volume of 92 call options.

Institutional investors and hedge funds have made changes to their positions in Bandwidth. Ladenburg Thalmann Financial Services Inc. grew its holdings in Bandwidth by 118.3% in the second quarter. Ladenburg Thalmann Financial Services Inc. now owns 738 shares of the company’s stock worth $55,000 after purchasing an additional 400 shares during the period. Cubist Systematic Strategies LLC grew its holdings in Bandwidth by 496.9% in the second quarter.

The list goes on of institutional investors piling in. However. while Morgan Stanley downgraded shares of Bandwidth from an “underweight” rating to an “equal” rating in October. ValuEngine downgraded shares of Bandwidth from a “hold” rating to a “sell” rating in a research note on Wednesday, December 18th. While a call its a way of possibly gaining some of the upside, as you can buy at a later date at the call value, the willingness to directly own is starting to diminish. We’re going to see some volatility on stock prices in this sector through 2020, not necessary through poor performance, rather investors moving from a “ride the growth train” to “manage the risk”.

 

People, Gossip, and Frivolous Stuff

Congratulations to Axel Clauberg, who is now Solutions Architects Leader, Germany bei Amazon Web Services (AWS). Previously he was VP Strategic Portfolio Management & CTO TC Services at T-Systems. As I’ve discussed previously, the big cloud providers will likely end up hosting telcos’ core over the next decade. Keep and eye on TMO/Sprint here in the US to see what they do.

Graham Baxter is now Director at Grey Bee Ltd, previously he was COO at H3G UK, he’d been with 3 since 2004!

Congratulations to Miguel Espírito Santo, who is now Product Manager at GoContact.

Andrew Byrne is now Vice President World Wide Sales at Ivanti (IT Security). I’ve known Andrew since Openwave Systems / Synchronoss.

Congratulation to Hanad Yusuf is now Director, Service Excellence & Planning (North ASEAN) at edotco Group.

 

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