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I want to back up that notion of a managed services local exchange carrier you mentioned earlier. Is that person or that company also an integrator?
Absolutely. That's where you get your hourly consulting. It's the special sauce. A customer looks to that person because they're generally a trusted adviser. Even in the large enterprise, there tends to be a person the decision maker has worked with for years and has trusted. And a lot of the [integrators] tend to be small businesses themselves. That role allows the channel partners to really prove their worth and continue to extract revenue.
Coming from the Speakeasy side, you've had a front row seat for watching the pickup in VoIP and the solution provider and service provider opportunity here in the SMB. How fast is that growing?
It's the fastest growing. I don't care what the analysts say. Three years ago we were struggling, mainly because it wasn't well understood. It was actually a needle-in-a-haystack: you usually needed some compelling event, like "My PBX is off-lease' or 'I'm opening a new location,' and that made it hard for a marketing solution. Plus, you present it as hosted, and there's not a lot of real education around it. But in the last 18 to 24 months, we've seen a sea change. Businesses are avoiding hiring that next person a lot of the time by making their systems work harder and getting more productive.
The consolidation happening in this piece of the industry: will it continue and, based on what you're seeing, is it just the space sorting itself out?
I think consolidation will be inevitable and will continue. We're an economies of scale business from a capital resource standpoint, and it's always been that way. On the VoIP side, the shakeout has been pretty dramatic: there were over 100 VoIP companies not long ago and now there's probably fewer than 20 that mater. I think that's a good thing for customers, and what I mean by that is, they want stability and they want to know they're working with partners who'll be around for the long haul. It's one thing to give your software business to someone who might be gone tomorrow, but it's another entirely to give them one of your front doors -- meaning your physical front door, your phone, your e-mail or your Website. You have to make sure they have the right customer support and resources, and consolidation will help that if done for the right reasons.
Will we continue to see companies in the space merging together, or will we see big IT vendors pluck companies for acquisition?
Well, a lot of the big guys have their VoIP play already, but it's not a play of customer-centricity. You may see it, but I'm not sure it matters. In the voice space, you'll see a last shakeout of financially unstable and not-well-capitalized companies. Then you'll see it evolve all over again with this concept of cloud computing, particularly on the applications side. The barriers to entry aren't big -- just like VoIP wasn't at the beginning -- but the requirements of the customer to stay are very significant. Cloud, in my mind, is an evolution, not a revolution. It's application by application by application: first you're outsourcing your payroll, then your expense management, and then further and further until you're talking about phone systems, and your ERP. One day maybe you'll wake up and you won't have any hardware or software on site.
And hopefully you won't be scared that it's not secure.
You won't because you're using MegaPath MPLS-VPN to access all of your services, and never traversing the public internet!