The purpose of this CXTech Week 28 2022 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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Following advice, I’m including a small pitch for my consulting services in this newsletter, many readers are unaware I consult. I’m an Engineer who’s been independently consulting for a couple of decades, “I know stuff and people” 😉 Being independent has its pros and cons, a big con is I do all the sales and delivery, that is I’m ignored up until delivery is expected yesterday 😉 A big pro is I can do stuff just because I think it’s important. I just wrapped up the analysis of Open Source Telecom Software Survey, and shared the interesting results with everyone who completed it. I’ll include some teasers in this newsletter, and I’ll share some of the results at OpenSIPS Summit and TADSummit 2022 in November.
Covered this week:
- A Sneak Peak at the Open Source Telecom Software Survey.
- How to get your first 5 paying customers as a conversation intelligence startup
- 8×8 CPaaS Delivers No-code
- Zenvia’s Ups and Downs
- Pareteum Sold to Circles Global and Channel Ventures Group
- Kaleyra Rejects Unsolicited Proposal to Acquire The Campaign Registry
- People, Gossip, and Frivolous Stuff
A Sneak Peak at the Open Source Telecom Software Survey.
We had 120 participants, in 2021 it was 114. This year the balance of participants was more representative of the open source telecom software business. An even split between North America and Europe. Previous years we had a European bias. Also more XaaS (UCaaS, CPaaS, CCaaS) providers and telco/ISP participated.
This results gave excellent insights, for example, into the challenges Subspace faced. You’ll have to wait until Sept/Nov to learn more 😉
But not to tease too much, the popular open-source projects used:
- Telecom: Asterisk (87), Kamailio (66), OpenSIPS (65), Homer (63), FreeSWITCH (61)
- Enterprise/Web: Docker (89), PHP (69), Apache (68), Grafana (61), HAProxy (61)
- OS/DB: Ubuntu (77), Centos (61), REDIS (68), MariaDB (58), Postgres (51)
The security questions showed the market is changing. Some questions had quite different answers while some delivered surprisingly similar results, consistency across different mixes of respondents is good in confirm results apply broadly across the industry. Anyway, participating in the survey enables people to gain early insight into the full results.
Symbl.ai created a nice summary of the critical step in building a company of winning multiple paying customers. Not one or two, that could be luck. Rather 5 which shows you’re onto something. The pricing is often little more than professional services, with a wrap of product/service based pricing to keep the investors happy. Paraphrasing their 4 steps:
Test demand: landing page, generate noise, hack a prototype. Figma, InVision , or Gs.frame, are great tools to test out how customers may use the product and make your idea seem real. You can have meaningful discussions and build a far better understanding of the core problem customers are looking to solve. Hacking prototypes encourages prospects to talk from the heart. I talked about the importance of hacking in the POC or Hack? article.
Find where your product belongs: are you building a voice assistant or a conversational assistant? Alexa Skills Marketplace or the Slack App Directory could be useful marketplaces where users will understand your product. You can not afford to start from ground zero on education.
Content: Communicate to the market the problem(s) your product solves, be plain spoken, honest, and straightforward. No management speak or marketese. Even avoid using AI rather machine learning, I know its a trendy word, like transformation. Keep it clear and simple. People are busy and attention is extremely short; the clearer and simpler your explanation, the more likely you’ll find good prospects. You want to find doers not talkers.
Visibility: You have to be physically and virtually where your target prospects hang out. That’s trade shows, conferences, and target prospects’ offices. Start-ups have a credibility gap. Being perceived as part of the ‘establishment’ of the prospect ecosystem goes a long way to resolving that.
I first came across no-code solutions in the ’90s, GUIs (Graphical User Interfaces) for creating IN (Intelligent Network) applications in telecom networks. Carriers didn’t use them, rather commissioning professional services projects with their IN vendors. Part of the reason was even though the service creation may require no / low coding, the service still needs to be managed and maintained. Any change in the IN platform or resources consumed by the IN service could impact its performance.
In the 2000s companies like Appian, Mendix, OutSystems built low-code solutions, and towards the end of last decade went IPO or were bought. Many of the online COVID processes, e.g. the Paycheck Protection Program, were implemented using such low-code solutions. A temporary app that needed to work at scale and be fast and flexible enough to cope with the need for action and uncertainty in process.
I’ve discussed “Where Does Low Code Make Sense?” in CXTech Week 12 2022, where I was looking at Appian’s pricing and wondered how they justify $75 per user per month? With a minimum of 100 users, $7.5k per month for an internal enterprise app with just 100 users is a little steep in my opinion.
Low-code platform pricing is a halfway house between PaaS providers like Heroku where you generally just pay for the compute, and full blown SaaS applications where you pay per seat. CPaaS is a little more PaaS than SaaS, its is providing components, which need to be assembled into workflows. Though many CPaaS also offer packaged applications as well.
The challenge for low-code buyers is understanding the value across the different solutions. No low-code solution is alike. Many SaaS apps can be heavily customized, e.g. Twilio FLEX. I make fun of Twilio FLEX, describing it as 99% of a CCaaS; however, It can be heavily configured. The line between SaaS and low-code is not clear from a functional perspective. It is clearer from a customer perspective, as I’ll discuss in the next paragraph.
This lead to a fundamental question: are low-code tools to replace classic development of existing apps; or do they lower the bar so that stuff that currently doesn’t get built can be, e.g. greater automation. My perspective is the latter. CPaaS use low-code to extend their capabilities into more enterprise workflows where programmable communications is the core. But they lack the deep vertical expertise of Mendix, Outsystems, Appian in banks, government, etc., where enterprises choose them across most of their workflows.
Zenvia is down over 80% since its IPO last year, and was up 80% shortly after its IPO, see below. The wild ride has 2 main factors, the category error of assuming its a CPaaS company, its business messaging. Living on a thin margin between what Twilio charges and the customer will pay. It’s a rapidly growing market, but the core value is a resell.
It has also been active in M&A in order to address this issue, transforming itself into a “unified end-to-end CX SaaS platform,” whatever that actually means. With acquisitions of Movidesk and SenseData. However, a recent downgrade by Goldman Sachs on profitability concerns with negative net margin of 5.93% and a negative return on equity of 4.49%; has kept the price falling.
They did run an investor event recently, there are some positive reviews, see linked Seeking Alpha article in the title. Until the integrations are successfully completed and they can prove customer will pay a premium in a recession for the value add; it’s likely Zenvia will continue trading at its current price. Analysts have much to answer for in confusing the market on applications and aggregation.
I’m not sure what’s left of Pareteum at this point. The rationale for Circles.Life is to add CPaaS and WiFi roaming to its MVNO offer. On the CPaaS side they should look at the open source CPaaS project and TADHack sponsor Jambonz. WiFi roaming is rather old school, mobile data roaming has replaced it for most customers.
Giovanni Tarone offered to acquire 100% of the The Campaign Registry, a wholly owned subsidiary of Kaleyra. The Campaign Registry, a reputation authority for the 10-digit long code business messaging campaign ecosystem, works with North American mobile operators and companies in the messaging business to provide visibility into campaign messaging source and content, allowing mobile carriers to provide an ‘allegedly’ more reliable and simple messaging service for Campaign Service Providers and Brands.
This reminded me of last week in CXTech Week 27 2022 where NetNumber was bought by PE firm Abry Partners keeps services business and spins out software business. The NetNumber services business Global Data Services (GDS) provides a single source for global inter-carrier routing, roaming, voice and messaging data covering 240+ countries and territories, 12,000+ service providers and 3,000,000 code-ranges. It enables carriers to understand incoming number formats and help protect customers from fraud. Likely Abry Partners sees the upside in number intelligence to secure online transactions, such as through Prove and TeleSign.
Its smelling like the PE folks are extracting intelligence services to ‘roll them up / exit them’ into a monopoly to ‘extract value / hold ransom’ telcos and programmable communications industry. Watch this space…
People, Gossip, and Frivolous Stuff
Chris Cavigioli is now Marketing at stealth startup in the Kingdom. We’ll have to wait to see which Kingdom he’s in. We met around 2010 at an IMS conference where I shared my perspectives around IMS (going to happen but focus will be voice), and RCS (great opportunity wasted by broken telecom standards process and telcos do not play nice together for new services, only commoditized ones).
Milena Keskenovic is now Strategic Sales Development Representative at Mitto.
Robert Clark is now Founder & Managing Principal at Mobodev. We met over a decade ago on OCAP and EBIF. Here’s a weblog I have on those acronyms, Explanation of EBIF, tru2way, OCAP, ETV for the non-Cable (Mobile) Folks.
Brian Reid is now Chief Revenue Officer at Gotransverse. We met when he’d just joined Oracle to head up their network applications sales. Again over a decade ago.