The Perfect Summer Storm - Vendors Take Heed!

13 Sep 2016

This summer has seen the continuation of the rapidly evolving new business environment, and the inevitable ongoing struggle with moving the distribution and carrier channel in the new market direction, which is having profound effects on customers, vendors, and even consultants.

It has been an interesting summer to analyze how enterprise, government and SMB customers are deciding from whom to buy next generation communications products and solutions.

Trends and Shifts from the Summer of 2016

This summer has seen an accelerated pace of industry consolidations and acquisitions (too numerous to mention for this space). We have provided a few examples below of industry consolidation/rationalization and the evolving role of channels and carriers for next generation communications technology products. Check out my LinkedIn profile or FOX 2.0 Blog to get more regular updates on industry happenings as they occur throughout the month.

Vendor Traits for Future Success

The characteristics for successful vendors, whether integrators, telecom carriers or manufacturers will be those with the commitment, market foresight, and cash flow to survive the short and long-term environment. We believe these traits are even more essential for success in the long-term, particularly when investing in the changing skills required to sell, design and support changing products and solutions.

Talking to Vendors and Customers Related to Spending Trends

During this summer, we talked to numerous folks from a broad range of IT, telecom, network and contact center areas. We wanted to find out how their customers were doing related to committing to investing in technology upgrades and replacement projects.

Most, if not all of them, said that their customers were holding off with a "wait and see what happens in the industry" message before committing new money. They also said that their IT capital and operating budgets were continuing to get squeezed related to short/medium-term cash flow.

We agree with the vendors' comments above based on our own discussions related to our clients' acquisition plans. Many of our enterprise and government clients have put projects on hold based on the concerns related to the accelerated pace of consolidation within the telecom sector, and the lack of funding for next generation telecom oriented projects.

Perfect Storm

We put this visual together to try to help explain the various factors that are converging, and are interdependent, within the IT and telecom sector. Each one of them is tied to, or affects the others in underdetermined ways long term.

This is because we really are within the storm (like a funnel cloud), and can't see the size, breadth and width of the total picture.

Integration of UC Solutions

What Does This all Mean to Customers?

There are hundreds of thousands of companies in Canada who have legacy Nortel systems that are coming to end-of-life soon. There are also thousands who are running on legacy telco Centrex services. And lastly, there are those clients that need to accelerate their capability to handle business growth, whether small start-ups or through corporate consolidation. There is also the aging of the telecom workforce, and the declining understanding and expertise of hard core telecom knowledge required to make enterprise-class solutions work reliably. (Check out our Facebook 9-1-1 Tech Advisors page to see examples of the declining performance problems associated with legacy 911 environments).

As we continue to analyze the vendors and customer investment decisions, we will provide our commentary and guidance in future articles.

In Summary

Our customers, disregarding sector and size are telling us that it is becoming more and more important to have the appropriate people with the required skills in your firm to design, install and support your solutions, not just to make the products. So, industry...wake up!

It certainly has been an interesting summer, and it looks like the storms will continue and even expand this fall and winter in the technology world. Hold on, folks!

Do not hesitate to contact us if you would like our thoughts and guidance on how to survive the ICT storms!

[email protected] or 289.648.1981.