The Cavell Summit Europe was held in London in March and brought together providers from across the cloud communications industry to gain the latest knowledge and insights about the changing UCaaS landscape.
The one-day event offered a mix of keynotes, panels, networking opportunities, and roundtable discussions from providers across the industry alongside Cavell’s analyst and research team.
Attendees were telcos, cloud communications service providers, MSPs, channel providers, and vendors who were looking to gain a greater understanding of the market and opportunities to maximise growth in the future.
Dominic Black, director of research, Cavell kicked off proceedings with his reflections on the state of the market, with a particular focus on the Channel.
He said, “We’re seeing a big change in the Channel. The channel market has gone from a resale model but now we’re seeing new challenges around insufficient sales support, deal registrations becoming more complicated, and we’re seeing the margins changing as well. This is really starting to put some pressure on the Channel around what they can sell in the future.
“When we look at the services sold alongside UCaaS – such as IT services, security, connectivity, and Microsoft – there are huge opportunities as a lot of partners are now looking at what they can sell alongside UC.”
He also highlighted the significance of some businesses now looking to invest in their second cloud communications platform. The cloud is no longer new for every prospect and this changes the conversation for channel companies looking to guide customers through their options.
Black said, “In 2021, 75 per cent of businesses were migrating from on-premise solutions to UCaaS. Now in 2023, just under 50 per cent of businesses are migrating from PBX to cloud. We’re now seeing more cloud to cloud migration.
“That means everyone in this room now needs to look at how they are going to diversify their product set, because everyone could end up looking the same. Making sure you have a differentiated solution is going to be more and more important in the future.”
The AI era
Black then pointed to the market opportunities, with customer experience and AI two clear frontrunners. He said, “We asked 1500 businesses: what are your top three priorities for your communications solutions in the future? In the SMB space, a lot of those priorities are around making cost savings whilst still providing better customer service. They are all obsessed with how they can use customer service as a differentiator.
“When you move into the enterprise space, you see a lot more focus around AI. Businesses are asking: how can we use AI to drive productivity, and to drive efficiency? How can we make it easy for our employees to communicate? AI is really starting to resonate.”
Black then pointed to business messaging as another opening, with SMS and WhatsApp messaging becoming a core communication for a rising number of organisations. He also reflected on network opportunities, with many big telcos looking at how they can monetise their networks to make the most of their investments in upgrading those networks.
Enterprise challenges
Later in the morning, Ant Morse, head of innovation at Virgin Media O2, chaired a panel discussion looking at challenges facing enterprises (pictured below, left).
Neil Owen, deputy digital director for digital workplace collaboration and communication services at DWP Digital (pictured below, right), Lori Di Bon Conyers, senior user experience consultant at RNIB (pictured below, second from right), and Allen Darnell, business systems director at M Group Services (picturd below, second from left), shared their thoughts on the technologies their organisations are adopting, with insight into future investment priorities.
Owen highlighted how the government is embracing the power of data. He said, “The government is interested in the value that data can bring. This has significantly changed over the last few years. Clearly, we are focused on safely leveraging that data. Privacy and security are key.
“We’ve got to be confident that data is safe, secure and private, whilst at the same time leveraging that data to drive all sorts of things. That isn’t just within DWP, data can be shared across government so that we can get more joined up outcomes across the UK.”
Darnell, from M Group Services, built on that point on data and trust within the age of AI. He said, “When we talk about AI, we are very nervous about what happens to our data and where the data has come from.”
He explained that his organisation will only work with providers of AI services if they are able to “go all the way through the supply chain” and explain “what is happening with the data, where it’s being processed, and what it’s being used for”. Darnell expects more businesses to ask these questions of their suppliers in the coming months and years, and channel companies need to prepare for that.
Targeting growth
In the afternoon, Matthew Townend, executive director, Cavell (pictured above), dived into different approaches to growth. He said, “One growth area is around product expansion. We are seeing a lot of focus from service providers who are looking at adjacent products and services now. SMB UCaaS providers are expanding into CX [customer experience], analytics, as well as informal contact centres and the opportunities that could be unlocked there.”
Townend highlighted business messaging, voice enablement, IT services and security as other areas providers are assessing for product expansion. He added, “The other key area for growth is channel. Channel is being redefined around the world right now. In all markets, we’re seeing a redefinition of the Channel. What I generally see now in terms of strategy is that service providers are backing more than one horse. Before you might have seen some providers with a very clear, indirect strategy, they’re now expanding that to [include the Channel].”
He emphasised how channel stakeholders are taking a more fluid approach to how to achieve growth. He said, “With margins being squeezed, we’re seeing completely new roles for distribution. When we’re looking at growth strategies, we are seeing people driving direct channel relationships where they used to have more wholesale relationships. By and large, this means providers are looking to have a strategy that brings together indirect, direct, and online.”
Other sessions across the afternoon examined the future of CX, with insights from channel stakeholders including Tollring, Gamma, Daktela, and RingCentral. There was also discussion on the differences in European markets, with experts from Communi5, Enreach, Colt and Tango Networks sharing their thoughts on opportunities across Europe and learnings from other countries.
Telco to techco
A late afternoon session looked at whether telcos are becoming techcos, with Andrew Small, managing director, global portfolio, BT, Andy Wood, pre-sales manager, Vodafone, Rick Garcia, EVP, product and marketing, Momentum and Roy Dehing, principal product manager, Azure for Operators, Microsoft, sharing their thoughts on how their organisation is changing.
All agreed that telcos are not becoming techcos, but they are bringing some techco strategies into their organisations so they can become better telcos.
Wood, from Vodafone, pointed to the company shifting from a waterfall to agile software development approach as one way it was learning from techcos. He emphasised Vodafone’s end goal is simply to offer customers better solutions. He said, “Our challenge, ultimately, is how can we get even closer to understand the needs of our customers? How can we identify really powerful and relatable use cases? How do we then build solutions to those use cases?
“Well, we need to be able to have a rich community of developers both internal and external, and we also need to make sure that any future product that Vodafone builds has APIs and SDKs in their DNA. For a telco, that is no small challenge.”
Changing route to market
Finally, the changing route to market was the topic of a conversation between Nathan Marke, COO, Giacom, Florian Buzin, co-founder and CEO, Starface, and Brad Milne, MD, Channel UC.
Black, from Cavell, chaired the session (pictured above, left). He explained, “The Channel has been the way that technology has been adopted by businesses. We see it as the driver for what’s happened. But there are some massive changes that are happening. We’ve seen a reduction of residuals and margins are getting squeezed. This means change for vendors, disties, and resellers.”
For Marke, from Giacom (pictured above, centre), the real change in the route to market stems from the rise of the MSP, as businesses want one provider who can handle the complexity of their technology requirements.
He explained, “The channel market in the UK is a little bit more mature than some other markets around the UK. Here, about 70 per cent of business IT services are spent with the channel, and it’s about 50 per cent when it comes to telco services. What we’re seeing is a very significant channel shift in favour of companies that can provide strategic services and be a strategic partner to SMEs.
“We typically see those companies characterised as MSPs, and these MSPs are winning significant market share over other routes to market, like resellers, VARs, but also the telcos direct and also the tech vendors.
“We think there’s a really clear reason for that in the UK. If we go back to 2019, SMBs were buying tech in a very tactical way. An SMB would spend a lot of money on technology, but it wasn’t strategic and they were buying in a very fragmented way. And that’s one of the reasons why, when we went into the pandemic, SMBs were so badly equipped to cope with what happened. And it’s also why the reseller channel did so well, because we helped the SMBs to survive.
“If we roll through to where we are today, there’s been a very significant change as SMBs know they can’t let that happen again. SMBs are all moving towards accepting the fact that work has changed with remote and hybrid work. To support remote work, you need to support a remote IT model, and largely that involves moving your business and applications into the cloud. That is why we think that MSPs are on the rise as they are the ones that are really set to capitalise on that.”
This event recap appeared in our April 2024 print issue. You can read the magazine in full here.