Interconnect FeverInterconnect Fever

We've had customers start out asking for CPE but end up leasing a hosted solution. Then, we've had customers starting out demanding hosted but end up buying CPE.

Everyone has a perception of telecom and telephone services. Recently Sheila posted in Interactive Intelligence: The Path to Hockey Stick Growth May be CaaS that, "Weber explained that there are deals that start out asking for a CaaS proposal but end up buying CPE."

What these customers may have decided was CPE is a better financial advantage for them, or they remain unconvinced of CaaS in the cloud, or perhaps CPE solutions are a better fit for them. The thinking was people want security and know past performance of CPE gear and relate to that past performance. Moving partially or entirely into new solutions isn't as easy a transition to make whether it's overcoming perception, technology or practical obstacles.

Then my buddy Eric wrote about SNOM and pbxnsip merging and giving away the PBX for free. The free model is so overused (think Skype, Google, Vonage) and I begin to think the rationality of business decisions going by the wayside, if anyone thinks the PBX is free. There's a price in open source and then there's seemingly a cost somewhere that is overlooked--but for sure, nothing is free. When there's not enough cash flow, then that free PBX can quickly become a boat anchor. R&D and continuous improvement efforts require cash and lots of it, and this should top the list in any open or free solution.

Hosted telephony and UC models are touting their benefits of having low or no CAPEX, but what many arguments fail to discuss is the higher OPEX. Then navigating downsizing in that contracted bundle isn't necessarily easy unless the details are hammered out up front. But what I really want folks to address is why is it such a bad thing to spend money on something that provides a positive return? Is the mindset that eliminating all CAPEX is a benefit to the company? Some traditional reasons to avoid CAPEX are when a product or service or both are deemed not of high quality, carry poor resale values and or have a high cost of lifecycle ownership. Leasing comes with a cost.

The telephony market is being fractured and it's amazing to watch. Some think that the PBX is dead, as does Microsoft and some of the vendors. Hosted providers think they have a better solution and tend to focus on OPEX. You may know how I feel: if you need more than a Mac, an iPhone and a PBX then something’s wrong with your thinking! Well, not exactly--that's how I think about our business, but if you can determine which mix of assets works best for you and provides the best return or value, then you have some success. At best it's a precarious process and then maintaining the adopted portfolio and moving forward will certainly offer some new challenges.

More and more it seems the industry is a huge jigsaw puzzle with sorted pieces that seem to dangle as to whether or not they are good fits. We've had customers starting out asking for CPE solutions but end up leasing a hosted solution. Then, we've had customers starting out demanding hosted solutions but end up buying CPE. In between we've also had customers seeking help for open source and hosted solutions. Maybe the market is suffering from the effects of elasticity and customers just don’t really know what they want.