Skip to main content

Telcos Could Be The Future Enterprise Software Vendors For Small Businesses

Having worked on enterprise software product and go-to-market strategy for SMB (small and medium businesses), I can tell you that these are the most difficult customers to reach to, especially the S in SMB. It’s an asymmetric non-homogeneous market for which the cost of sales could go out of control if you don’t leverage the right channels. The competitive landscape varies from region to region and industry to industry. In many cases instead of competing against a company you would be competing against a human being with paper-based processes.

Tomorrow I am speaking at the Razorsight annual conference on the topic of cloud computing. I am excited to meet their customers, the telcos. While I prepare for my keynote, I can’t stop thinking about the challenges that the telcos face and the opportunities that they are not pursuing. My keynote presentation is about how telcos can leverage the cloud, but this blog post is about how telcos can become successful enterprise software vendors and market their solutions to small businesses.
There are very few things that are common across small businesses. They own a landline (at least for now) and they have Internet access, in many cases from the same vendor. I believe that the landlines will be more and more difficult to sell to these customers, but losing a channel – a relationship – would be even worse. If leveraged well, these relationships could be worth a lot more compared to the landline business as it stands today. Just think about it. Selling to small businesses is all about leveraging existing relationships with them. This channel is priceless.

What will it take for the telcos to market products to small businesses?

ISV acquisitions or VAR agreements: If telcos are bundling software, on-premise or SaaS, the telcos, as organizations, don’t necessarily have the skills or resources to make software for small businesses. This would mean a series of small and niche ISV acquisitions across geographical areas and industries and VAR agreements with current ISVs.

What kind of software can telcos bundle?

There are two kinds: horizontal and vertical. The examples of horizontal software are accounting, payroll, point of sale etc. Ask Intuit and they will tell you all about the horizontal cash cow. The vertical software is industry specific for the business that you are in. One of my favorite companies in this area is OpenTable. If you have made an online reservation at a restaurant you have most likely used their software. They had a successful IPO last year and they are on track to become a $100 million company.

Telcos should be doing all these things. They have cash and they can borrow cheap money to buy companies. Telcos also have an option to leverage the cloud, their own cloud in many cases, to provide SaaS solutions to small businesses. They can leap frog the on-premise ISVs who don’t have access to these customers and are sensitive to margin cannibalization.
Labels:

Comments

Post a Comment

Popular posts from this blog

Emergent Cloud Computing Business Models

The last year I wrote quite a few posts on the business models around SaaS and cloud computing including SaaS 2.0 , disruptive early stage cloud computing start-ups , and branding on the cloud . This year people have started asking me – well, we have seen PaaS, IaaS, and SaaS but what do you think are some of the emergent cloud computing business models that are likely to go mainstream in coming years. I spent some time thinking about it and here they are: Computing arbitrage: I have seen quite a few impressive business models around broadband bandwidth arbitrage where companies such as broadband.com buys bandwidth at Costco-style wholesale rate and resells it to the companies to meet their specific needs. PeekFon solved the problem of expensive roaming for the consumers in Eurpoe by buying data bandwidth in bulk and slice-it-and-dice-it to sell it to the customers. They could negotiate with the operators to buy data bandwidth in bulk because they made a conscious decision not to st...
Post a Comment
Read more

A Data Scientist's View On Skills, Tools, And Attitude

I recently came across this interview (thanks Dharini for the link!) with Nick Chamandy, a statistician a.k.a a data scientist at Google. I would encourage you to read it; it does have some great points. I found the following snippets interesting: Recruiting data scientists: When posting job opportunities, we are cognizant that people from different academic fields tend to use different language, and we don’t want to miss out on a great candidate because he or she comes from a non-statistics background and doesn’t search for the right keyword. On my team alone, we have had successful “statisticians” with degrees in statistics, electrical engineering, econometrics, mathematics, computer science, and even physics. All are passionate about data and about tackling challenging inference problems. I share the same view. The best scientists I have met are not statisticians by academic training. They are domain experts and design thinkers and they all share one common trait: they love data!...
Post a Comment
Read more

Reveiw: Celluon Epic Laser Keyboard

The Celluon Epic is a Bluetooth laser keyboard. The compact device projects a QWERTY keyboard onto most flat surfaces. (Glass tabletops being the exception) You can connect the Epic to vertically any device that supports Bluetooth keyboards including devices running iOS , Android , Windows Phone, and Blackberry 10. On the back of the device there is a charging port and pairing button. Once you have the Epic paired with your device it acts the same as any other keyboard. For any keyboard the most important consideration is the typing experience that it provides. The virtual keyboard brightness is adjustable and is easy to see in most lighting conditions. Unfortunately the brightness does not automatically adjust based on ambient light. With each keystroke a beeping sound is played which can be turned down. The typing experience on the Epic is mediocre at best. Inadvertently activating the wrong key can make typing frustrating and tiring. Even if you are a touch typist you'll still ...
Post a Comment
Read more