When I first learned of the word FinTech, I thought, “Oh! A group noun for digital banking, finance, insurance, and crypto currencies. A handy moniker for a collection of related services, and at least it avoids using the dumbass term digital.” That handle has stuck and driven broad recognition of the category for investors, press, analysts, and related industries. That’s the power of a good handle. And why we’re searching for a better handle for Programmable Telecoms. See the State of the Union (Programmable Telecoms) Address for definitions and some conservative market sizing.
Programmable Telecoms is not a good handle. It’s technically correct. Works for the choir, those who self-identify with the term. But a handle needs much broader appeal and Programmable Telecoms has several shortcomings.
- It uses the T-word, Telecoms. I’ve pointed out for years Telecoms and Telco are different. Unfortunately, they sound similar, so most assume they must be alike. Karel (Voxist) pointed out the category he positions his start-up in is AI, it’s your intelligent assistant. If he used the Telecom category no one would give him the time of day.
- Some use the word communications to avoid the T-word. Communications is what PR people do, check Google. Worse still, some use Cloud Communications, the hosted VoIP crowd realized most people couldn’t tell the difference between hosted and cloud VoIP / PBX services. So it was a great way to spin a tired old category. Cloud-washing has been around the over a decade. Today cloud has reach a point of commoditization with Google, Amazon and Microsoft being the main flavors to choose until you get big enough that the economics make sense to migrate workloads in some regions onto your own infrastructure.
- Programmable sounds like Programming which scares people. Reminding them of those unintelligible University lectures filled with CompScis (pronounced compski – Computer Science students), think poor fashion sense and even poorer personal hygiene 😉
So we’re off to a looser with mass market appeal for Programmable Telecoms. Hence the search for a mass-market handle. We had a great drains-up review at the end of TADSummit, which you can see here. I summarize some of the points in the discussion here to save you reviewing the 50 min video.
Points raised in the drains-up review.
Adam (BT) succinctly explained the category is voice / messaging / video / conversations; the challenge is they are seen as being provided for free by web companies. He suggested relationship technology, RelTech. And recommended moving from technical explanations to the outcome side of discussion. Investors must understand how the technology builds trust and valued outcomes and how that translates to $$$.
Programmable telecoms also impacts the network, it’s all becoming software. Enabling enterprises to become xVNOs and in some locations even network operators (MONeH). The network is now a service, like voice, messaging, and video. The data contained in those networks can be used not just for operational improvement, but customer security and improving experiences.
ConversationTech (a handle we were kicking around before TADSummit) is already taken by a group known as ConvComm (Conversational Commerce – e.g. Amazon Alexa). This handle was seen as too narrow to limit the category to conversations, which people assume means voice.
TAD (Telecom App Development) is too developer focused. It made sense in 2013, but 6 years later it is dated as fashion moves away from hackathons and developers.
Dean (Disruptive Analysis) suggested open telecoms or democratized telecoms.
Luis (ottspott) pointed out we’ve removed telecom complexity. We’ve democratized telecoms and industrialized programmable telecoms. It’s now mainstream. The focus is now on sales improvement and customer experience improvement. The focus is on improving relationships, customer experiences, and employee performance.
Rob (ipcortex) – democratization is done, programmable telecoms is now a central thread (an enabler), adding value and enhancing communications.
Paul (webio) – AI drives improvement in experiences. Wideband voice improves trust / intimacy. We must focus on experiences that make a quantifiable difference. FinTech makes it easy to see the money. Telecoms is more difficult, we need to point to what the difference in experience means in $$.
Bernando Flood raised an important point on the category needs to be clear from a EBITDA / multiplier perspective.
Telcos generally have low growth with EBITDA in the 30-35% range, with an EV/EBITDA (multiplier) of 2-5. Emerging markets are trending down to these numbers. The word Telecoms presupposed this financial performance in the mind of investors. Hence Karel’s category positioning in AI not Telecoms.
The new cadre of web-centric telecom / enterprise telecoms players (e.g. Twilio / RingCentral) generally have 50%+ revenue growth and are positioned as either disrupting the $33B UC (Unified Communications) market, or creating a new category in CPaaS of $8B + substituting SIP trunking, CCaaS, legacy messaging revenues, MFA (Multi-Factor Authentication) security, etc. EV/EBITDA is difficult to calculate as they are still heavily investing, investors are anticipating EV/EBITDA in the range of enterprise / web services companies (15-30 range).
Another issue with the programmable telecoms category is what revenue is being substituted (or using a more fashionable term: disrupted): is the the total $2.2T of telecom, $1.4T in telecom services, or $250B enterprise telecom services. Regardless these are BIG numbers. However, the shift away from usage based voice and messaging, has been absorbed into subscription fees across both consumer and business in some countries. So we need to be clearer on what revenue is specifically being targeted by programmable telecoms.
Howard (Joyent) raised the point that some investors consider the category commoditized by Twilio, “Twilio does that.” Clearly the view of the room is it is not the case, but given Howard recently sold his company and was dealing with Private Equity folks, this point must be addressed. Also there is the longer term strategic issue, will Amazon or Google commoditize this segment? We’re hearing rumors of Amazon becoming an MVNO, Google already is.
Jerome (Wazo) highlighted we need to talk $$$ to make this segment more attractive. The market size of $100B I showed in the State of the Union Address he considered conservative. Rather, what is at stake is the $1.4T communications market. This segment is transforming how companies interact. We’re providing tools to enable better conversations / communications / engagement.
Jerome’s last point got me thinking on a possible-long form category definition: web-centric multi-network engagement technology. The issue with this definition is an assumption that web-centric means WebRTC exclusively, which is not the case. BUT the bias is towards web-centric services model over multiple networks (voice, messaging, video across IP (open and closed) and the PSTN, private networks, virtual networks, and the data contained in them) to improve engagement with customers, employees and things. But how do we find a handle for that!
All companies in this space are struggling with defining themselves. Review their websites, I’m not going to pick on any one company. But you see a common thread, they end up with simply giving a long list of what they offer including: voice, video, chat, IM, SMS, Cloud Contact Centre, Compliant Recording, Encryption & Archiving, WebRTC Meeting & Collab, CRM & IT System Integration, Speech Analytics, Reporting & Statistics, Global Carrier & Local Numbers, …. Technically they are correct, it’s what they do, but it’s not a handle.
The search for a better handle for Programmable Telecoms
Let’s get our thinking hats on. This weblog is just the beginning of the search for a better handle for Programmable Telecoms. What do you think? Add your comments, contact me, I’m talking with people across industries. We’re going boldly where no one has gone before, to find a better handle for programmable telecoms 😉
Many thanks, Alan, for taking the lead on this quest for a long sought-after striking handle to point to our programmable communication industry, and thank you also for putting all of us in the loop!
Here are some preliminary considerations to move forward and forge this handle.
First, let us have an overall look at what other industries do – beyond “Fintech” that you cover in your article: AgriTech, BioTech, CleanTech, EdTech, FinTech, FoodTech, GovTech, HealthTech, GreenTech, InsurTech, MADTech / ADTech, PropTech, PRTech, RetailTech, TravelTech…
A) A few comments on the form to begin with:
1) All of the 16 given examples are short. Before “Tech”:
• There are only between 2 and 6 letters;
• There is a maximum of 2 syllables;
• It can even be an acronym, as long as it is commonly used.
2) No prefix ends with “t”, as it would collide inappropriately with Tech.
B) Then, three generals comments on the content itself:
1) The prefix is not about what the providers do. It is about the targeted industries;
2) The prefix is clear and self-explanatory for anyone;
3) The suffix “Tech” is already here to embrace all the various technologies and solutions that are provided by the stakeholders.
Based on these early considerations, we should now ask ourselves what industries we are serving. And we definitively have an issue here! The scope we cover is indeed amazingly broad:
– Designing tailor-made unified communications solutions with a programmable platform, you improve team collaboration in literally any industry;
– Building custom-fit contact centre solutions with a programmable platform, you enhance the relation between a company and its customers, in any industry too;
– Adding communications features into existing web or mobile applications with a programmable platform, you lift the impact of your assets in terms of process efficiency and of customer journey enhancement. This holds also true for any industry.
The great thing is that the impact of programmable telecommunication on how the whole world communicates is huge, immense, and almost infinite. The hard part is that it is far too broad to mention a specific industry only. It makes things harder a) to find a catchy handle and b) to convince narrow-view investors, which like to put their money in some targeted market segments – they have their reasons to do so. In our case, in this perspective, it seems to me a dead-end to try to find a prefix that points to the industries we serve.
We are indeed facing with a similar situation than that of IT generally speaking. Database, computing or hosting activities who also target any industries in general. The term “Cloud” was very convenient to new waves of services that are provided, well, from a cloud infrastructure. But, programmable communication is not necessarily cloud-based. The provision of cloud-based programmable communication capacity, such as Twilio’s, is great for some cases but also limited to some extent, when communication becomes a key component of your offer – such as for communication service providers – or when you are aware of the criticality of your stack, such as for government bodies or sensitive businesses.
In the end, and in contradiction to what other tech segments do, we are obliged to focus on the value proposition of programmable communication, in general, including voice, text & image, which is to allow adequate and efficient communication.
Therefore, here are some proposals that I don’t like, or that I don’t like enough to support strongly. They still might emulate further ideas:
– ContactTech, unfortunately, its sounds awful, as the prefix ends with a t;
– Linktech, not quite self-explanatory, and the place is trusted by LinkedIn;
– TouchTech, not quite self-explanatory;
– ITCommTech, too long with 3 syllables;
– DialTech, with the idea of Dialogue;
– HuddleTech;
– ScriptTech, whose meaning is good both for language/communication and for programming, unfortunately it ends with a “t”;
– HookupTech – controversial ☺;
– HeraldTech – better for Newspapers;
– ConveyTech or ComveyTech;
– FiveNineTech, with the meaning ‘LoudAndClearTech” – RogerTech?;
– CommposeTech;
I hope this helps.
Kind regards
Jerome
Alan:
An interesting argument and points. The question is what works?
To me, Programmable Telecom always was related directly to APIs and programming tools that provide network communications functions (that is allowing one to get information/data from point A to point B in a network). As you noted, not very appealing to the mass market.
You coined a phase “web-centric multi-network engagement technology” which meets all your criteria to replace Programmable Telecom. The problem: say that three time fast 🙂 If we created an acronym, we would have WCMNET, better, and I don’t know how to start and pronounce that.
But you get the idea…. good luck!
Mark
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