THE BRAINS OF THE NEW GLOBAL NETWORK HOSTED BUSINESS SERVICES BRINGING YOUR SERVICES TO MARKET Bryan Grimm February 5th , 2015 Metaswitch Networks | Proprietary and confidential | © 2015 | 1 THE NETWORK BRAINS ARE ON THE MOVE… …FROM DEDICATED HARDWARE APPLIANCES TO PRIVATE AND PUBLIC CLOUDS NETWORK INTELLIGENCE SERVICE INTELLIGENCE INTELLIGENT SOFTWARE GENERIC HARDWARE COMMODITY COMPUTE COMMODITY STORAGE COMMODITY SWITCHING THE NEW GLOBAL NETWORK IS MORE… COST EFFECTIVE FLEXIBLE PROGRAMMABLE REVENUEGENERATING INTELLIGENT COMPETITIVE METASWITCH: THE BRAINS OF THE NEW GLOBAL NETWORK Unmatched Communication Software DNA 30+ years of software development; broad portfolio proven business model; financial stability Cloud, NFV, SDN leadership Industry experts, first-to-market virtualized applications 650 employees High retention of engineering expertise Innovative, agile development methods 1000+ global customers Service Providers Equipment Manufacturers Large Enterprises Built on Innovation Quality Engineering Reliability Exceptional customer support AGENDA Hosted Voice Market Observations Product Positioning Sales Engagement Support Services Metaswitch Networks | Proprietary and confidential | © 2015 | 5 MARKET OBSERVATIONS Metaswitch Networks | Proprietary and confidential | © 2015 | 6 LEGACY PBX IS IN DECLINE WHILE HOSTED IS GROWING Hosted IP PBX/UC Market Size and Forecast by Region $14 Revenue (US$ Billions) $12 $10 $8 $6 $4 $2 $0 CY12 CY13 North America CY14 CY15 EMEA CY16 Asia Pacific CY17 CY18 CALA Though PBX systems have had stagnant-to-declining sales over the past few years, the market for cloud services continues to expand, with businesses worldwide seeking out hosted alternatives. * Infonetics, 2014 Metaswitch Networks | Proprietary and confidential | © 2015 | 7 WOULD YOU LIKE A SLICE? YES PLEASE!!! COMPETITIVE LANDSCAPE North America EMEA 14.9 million seats (YE 2014) 6.5 million seats Over 100 providers 8x8, RingCentral, West, Verizon, Vonage Business, Thinking Phone Networks, Comcast, Broadview Networks, Star2Star, Mitel, ShoreTel, Cox, Intermedia, Telesphere, Megapath BT, Telenor, Orange, TeliaSoneria, Telefonica, TDC, Vonafone, DT, SFR, Bezeq, KPN Country level activity with dominate providers UK has broad competitive landscape Asia Pacific CALA 7.3 million seats 1.6 million seats * Infonetics, 2014 Healthy markets in S. Korea, Australia, China, Japan Still nascent market with slower competitive activity Telestra, Optus, KT, Samsung Networks, China Unicom, China Telecom, Mexico, Brazil, Argentina IP ADOPTION RATES BY COUNTRY 30% 25% 28% < 10 Employees Low adoption rates are an opportunity for service providers willing to address the needs of the SME market 23% 10-49 Employees > 50 Employees 20% 15% 18% 17% 16% 13% 13% 11% 10% 10% 7% 5% 0% 3% 4% 9% 8% 6% 4% 4% 3% VOIP DEPLOYMENT BY COMPANY SIZE Plenty of opportunity… 100% 6% 17% 90% 22% 22% 78% 78% 20 to 49 50 to 99 29% 80% 70% 60% 50% 94% 83% 40% 71% 30% 20% 10% 0% 1 to 4 5 to 19 TDM IP 100+ TIMING? HISTORY LESSON ’08 ‘08 Early 90’s Early 90’s • Business as Future Future • Global • Global Economic Economic Recession Recession • Business as Usual usual • Window • closes Window closes Late90’s 90’s Late 2015 2014 • •Build upup toto Build Y2K Y2K • Opportunity • Opportunity OPPORTUNITY COST Hosted PBX has a high opportunity cost factor Once the customer chooses another provider they are “lost” for at least 3 years – probably much longer Given you may have a limited number of businesses to go after, this has a big economic impact $2,000,000 Market Example: $1,800,000 $1,400,000 1,600 businesses in a single target market 6 month delay results in $900K less revenue over 5 years – 20% less! Annual Revenue ILEC with CLEC markets $1,600,000 Speedy Deployment Delayed Deployement $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 Year 1 Year 2 Year 3 Year 4 Year 5 Metaswitch Networks | Proprietary and confidential | © 2015 | 14 THE TIME IS NOW 32% <50 employees >50 employees 33% 25% 24% 25% 17% 15% 11% 10% 8% 60% in the next 2 years 73% in the next 2 years FIRST JOB IS TO… COMMON UNDERSTANDING OF IP COMMUNICATIONS 39% Opportunity to educate 20% 13% Unfamiliar Reduce Costs Innovative Features 16% 11% QoS Issues Better Way to Manage CURRENT PHONES SYSTEM ISSUES 32% No Issues 11% Too Expensive 10% SP Customer Service Too Old or Outdated 9% Billing 9% 8% Poor Call Quality 7% Capacity MACDs Doesn't Meet Business Needs Lacking Features 5% 4% 4% ~ 1/3 of the market is content with their current solution COMMON PERCEPTION Perception is that Hosted is cheap but not as good 19% 20% 32% 37% 56% 58% 52% 45% 18% Cost 22% Management 25% 16% Features Call Quality STILL INTERESTED <50 >50 Extremely Interested 25% Extremely Interested Very Interested 24% Very Interested Moderately Interested 26% Moderately Interested Somewhat Interested Not Interested 15% 11% 21% 33% 22% Somewhat Interested 12% Not Interested 13% INTERESTED IN WHAT THOUGH… Visual VM Portal Softphone Presence IM Collaboration ACD Sim Ring Group Features Auto Attendant Advanced Call Ctr FMFM CRM Integration Music on Hold 0% 10% 20% Important to our company today 30% 40% 50% 60% Important to our decision to switch to VoIP 70% MARKET RESPONSE – MORE COMPETITIVE PRESSURE An attractive market with good returns = competition Hosted PBX is also a disruption on how companies purchase telephony services Most haven’t thought about it in some time (or at all) Two emerging players – large MSO’s and Over-the-Top Both have aggressive pricing and a lot of marketing US Pricing – normalizing in the $30/seat/month range Slightly higher in EMEA Slightly lower in APAC and CALA Metaswitch Networks | Proprietary and confidential | © 2015 | 22 YOU HAVE THE HOME FIELD ADVANTAGE Not only can you deliver a best in class product at an attractive price, you can deliver: Personalized service Local sales force On-call technicians nearby Reference customers in the community This needs to be central to your marketing messaging and sales model! Metaswitch Networks | Proprietary and confidential | © 2015 | 23 PRODUCT DESIGN AND PACKAGING Metaswitch Networks | Proprietary and confidential | © 2015 | 24 Customers to understand Simple for… Sales to position Simple for… Simple for… THINK SIMPLE WITH YOUR OFFER! Operations to turn-up and support Metaswitch Networks | Proprietary and confidential | © 2015 | 25 RECOMMENDED HOSTED PBX PACKAGING AND PRICING Basic Seat Standard Seat • • Includes: PBX Feature Set • • Target • Conference room Break room • PBX Feature Set CommPortal Unified Messaging Easy Call Manager Typical end user configuration Lines Pricing (MRC) Long Distance Phone Price Non-recurring Global Features (included in every sale) Premium Seat • • • Mobility (Accession) E-fax • • • Admin Portal Auto Attendant Music on Hold Mobile Worker Included $ $$ $$$ Unlimited or large bucket of minutes $-$$$ per month based on chosen phone with option to purchase Minimal Metaswitch Networks | Proprietary and confidential | © 2015 | 26 SEGMENTATION Understand your marketplace and what customers are looking for Put a dollar value on those segments so you know where to focus This might minor changes to your offer to meet business requirements of a certain type of customer (size or vertical) Also examine your salesforce and their capabilities SEGMENTATION NEEDS BY MARKET SIZE Bigger companies have more specialized needs Smaller Businesses Mid-Size Businesses Product Simpler needs More complexity Timing Faster sales cycles Slower sales cycle SLA’s SLA’s generally not needed SLA’s desired Multi-site requirements Generally no Yes Call Center Existing hosted capabilities OK (MLHG) Generally will need ACD and call recording Network Redundancy Not an issue Many will want geographically diverse servers Network Security Design Concerned Critical concern MOBILITY – GET IT INTO YOUR OFFER Mobility package would enable integration of desk phone environment with any device For instance, if the end user has an iPhone, iPad, and Windows laptop, they can load the application on all devices for the same price Would allow “mobile-only” users – no desk phone, just client(s) – would still need to buy a “seat” Research points to a $5/month price point 29 THINK THROUGH YOUR OPERATIONAL PLAN Hosted has lots of moving parts CUSTOMER – Hosted PBX Process Rev 1.0, May 2013 Order Entry/Site Survey Customer STOP – cancel order NO From Page 1 Customer Accepts Changes? Customer Customer Customer YES Update contract to Schedule Site Survey Hosted Voice Process reflect changes Conduct Site Survey and LAN Assessment Negatioate Installation date with customer Schedule Install Date Rev 1.0 - INS Site Survey (Form) and Facility Pictures Any changes from original Proposal? Customer Sales Coordinator Order Entry/Site Survey Customer Accepts Changes? Upload revised site survey form into Goldmine NO Customer NO STOP – cancel order Customer Page 3 YES Site Survey (Form) and Facility Pictures Append Site Survey to order? Notify Sales of any Changes from baseline proposal Customer Rev 1.0 - INS Schedule installation date and load into dispatch system Create Service Order in Metasolve and append with Site Survey doc Notify finance for 911 processing Customer Page 3 Customer INS Engineering Any changes from original Proposal? Revise Proposal and Present to customer ATI Installation Conduct Site Survey and LAN Assessment ATI Project Mgr NO INS Sales Supt Sales Engineer - ATI Hosted Voice Process YES Installation Complete ATI Proj Manager From Page 1 Revise Proposal(?) and Present to customer Sales Sales Schedule Site Survey INS Sales Support YES Notify Sales of any Changes from baseline proposal Activate Port From Page 3 Confirm Install Date/ TIme Customer Training Install POE Switch, Router, Phones Test configuration Finalize Installation – test service Customer Test (form) Notify INS Sales Support order is complete Close out order in billing system Metaswitch Networks | Proprietary and confidential | © 2015 | 30 OPERATIONS MAKES A HUGE DIFFERENCE Strive to get a quote to a prospect within 48 hours Outreach to first sales conversation Outreach Referral to Sales Time from sales call to first quote Initial Sales Conversation Time from initial quote to final quote Revise Quote Draft Quote Final Quote Once the sale is made, target a customer turn-up within 30 days Clearly communicate timelines with the customer Be professional throughout Research shows that a positive up-front experience is a big indicator of a long term relationship – go the extra mile! Metaswitch Networks | Proprietary and confidential | © 2015 | 31 YOUR WEBSITE Front door to your product and your company Prospects (that don’t know you) will almost certainly research you using your website Invest in it and make it current! Metaswitch Networks | Proprietary and confidential | © 2015 | 32 PRODUCT MESSAGING Easy Call to action Not a single acronym used PRODUCT MESSAGING Let videos with real employees tell the story Metaswitch Networks | Proprietary and confidential | © 2015 | 34 SELLING HOSTED UC Metaswitch Networks | Proprietary and confidential | © 2015 | 35 THE WRONG APPROACH TO SALES TRAINING Slide 1 – “Hosted Voice Service is Service Provider X’s answer to the communication needs of today’s Small and Medium Business Customer.” Slide 2 – Jargon and Network Diagrams in advance of customer benefits No benefits statements to features or practical applications Offer Training vs. Sales Training -Lack of Solutions Selling and practical use cases SOLUTION SELLING Solution selling involves asking clarifying questions to understand a customer’s needs before you propose a solution Key is to become the trusted advisor – helping them solve a business problem using your expertise A short video: http://smallbusiness.chron.com/solution-selling-sales-training-71867.html It is critical that sales know this product inside and out…this is a competitive market with very experienced sales people Metaswitch Networks | Proprietary and confidential | © 2015 | 37 THREE SIMPLE STEPS Ask Listen Advise • 5 Questions that are not specific to technology • What are the business’ core values • From the customer’s responses you can begin to formulate your solution • Listen for indicators about who else will be involved in the decision making process • Craft your solution to address the customer’s stated business needs • Acknowledge where your recommended solution is a good fit/where it is not Metaswitch Networks | Proprietary and confidential | © 2015 | 38 THE BRAINS OF THE NEW GLOBAL NETWORK QUESTIONS?