Beutler: Alianza is the only full-stack, cloud-native communications platform built exclusively for service providers. We’re helping service providers transform their communications networks to the cloud.
Beutler: I’ll start the last part of the question first. It’s a significant win for Alianza as this is our first publicly announced Tier 1 operator that is ditching the switch and cloud sourcing their communications network with Alianza. More specifically, we’re really excited about this deal because it really is the kind of pinnacle-proof point in the market of everything that Alianza has been talking about for the last decade. We’ve been big on messaging the merits of the cloud and why service providers should be leveraging the cloud to power their cloud communication services.
A multinational operator like Lumen leveraging the cloud indicates that people in the industry have accepted that its now time to move away from the legacy softswitch. Furthermore, it signals a kind of a change that the era of the softswitch is coming to an end, and the era of the cloud powering service providers communications networks is gaining more and more momentum all the time.
Beutler: Unlike many operators in the market, Lumen has a voice and communications network that is full of multiple different vendors. If you look just at the switching infrastructure, there’s four different vendors inside of Lumen that are going to be impacted by this change. Then you look at the ecosystem surrounding those legacy softswitching infrastructure vendors, and it’s dozens of other vendors for everything from billing remediation, network management, porting infrastructure, fraud prevention, device management and so forth. The list goes on and on.
What this means for Lumen is a drastic network transformation and network simplification. At its core, Lumen is trying to compete and win in a marketplace that is a lot different than it was when they implemented and installed their first softswitch.
If you think about the last 10 years since Lumen installed and managed legacy softswitches, the market for unified communications has changed dramatically. Meanwhile, Lumen has been stuck with the softswitch they put in 10 years ago. They’re increasingly hearing from customers that they want more on the innovation front, extensibility, interoperability, and a more feature-full communications experience that goes beyond basic voice enabled by the softswitch. This change is really an effort to put Lumen back on a growth and innovation trajectory, back at the forefront of product differentiation. And it gives them a solution that their sales teams, channel partners, and customers can be proud of.
Beutler: It is a game changer. If you look at the marketplace some of the leading innovative OTT operators have faced over the last decade, they’ve had pretty fertile ground to compete. They’ve had a differentiation advantage and an innovation advantage because they own their own proprietary cloud platforms, and so they’ve been able to innovate at a pace that service providers on legacy switching infrastructure have just not been able to keep up with. That local infrastructure and local support is a big deal, but they’ve lost some market share to OTT providers because they haven’t had an agile, cloud-first, extensible product stack.
That’s where this is really exciting, because we’re able to take Alianza’s differentiated cloud offering and power service providers in a new way, where they really get a best in-class cloud solution with their broadband advantages. When you combine those two, the marketplace over the next decade is going to look a lot different than it has over the last decade. Service providers are going to be much better positioned with Alianza to compete and win against OTT competitors.
Beutler: I think we’re going to look back and say that 2021, 2022, and 2023 is when the tide turned for service providers. And after a decade of maybe the tide flowing out, the next decade is the tide coming back in, and the market will be moving in their direction rather than against them.
I also think it’s going to be an exciting time to be a service provider. Certainly there are challenges, but the world needs great communication services and applications with better service, better support, better local touch, better install experience, and better digital-first experiences than they’ve ever had before. There is nobody better positioned in the market to deliver what those enterprise customers want than service providers than Alianza.
Beutler: It starts with the whole digital experience and making it easy for customers at every step of the journey. In the past, service providers with legacy softswitches required a switch tech to make an on-premises visit in order to add an additional line or complete a feature enhancement. That’s no longer sustainable or competitive. Alianza is really enabling a digital-only experience for the customer, from provisioning through porting, through sign-up of services and lighting up features and functionality, to adding another user, to managing those users, to supporting your existing infrastructure. Its all done digitally in a web-first, modern interface that makes it easy for the customer to self-support and self-sign up, without ever talking to their service provider. On the rare occasion when they do need to call for support, their service provider is so much more capable now with Alianza. Things like first call resolution and managing services dynamically while the customer is on the call, and making sure that customers, if they do have to call, they only have to call once and it gets done in real time. It starts with that kind of digital experience and ensuring that service providers are no longer tied to legacy switching infrastructure that is antithetical to what the market wants.
The second big thing is that customers really do want a full-featured, functional experience that is not just delivered in a web experience, but is also delivered by local people they know and trust. This is where service providers can differentiate in the marketplace.
We actually surveyed over 500 small and medium business (SMB) telecom decision-makers to get a pulse on the state of cloud communications in the United States. One of the key insights was that 87% of SMBs would prefer purchasing phone and cloud communications from their local broadband provider, if the VoIP features met company requirements. Data like this is encouraging for service providers as it nudges them to get a cloud product and bundle it with their broadband services, as their customers would want to purchase from them. The market is moving towards local providers; they just need a platform to power it.
The third level of differentiation is when service providers start to bundle and think about pricing advantage against OTT. If we look at pure play dynamics, Microsoft is starting to pull away from other competitors and is creating clear leadership in the UC collaboration application marketplace. I think part of that has to do with their differentiated ability to bundle the cloud meeting experience with the Microsoft Office productivity suite. Service providers have a very similar advantage in the middle of the market to bundle services with their broadband at price points and in ways that are just much more consumable and differentiated. That’s just going to be a natural outcome as this market matures, and we’ll see service providers do more and more of that type of activity to really set themselves apart.
Beutler: What we will not see in this space over the next year to three years is service providers deploying more softswitches.That’s just the biggest non-starter out there, as we aren’t in the era of deploying new softswitches or continuing to invest in legacy infrastructures anymore. Those days are gone and behind us, and operators are in mass trying to figure out what they are going to do to compete and win in the cloud communications marketplace. The first decision is what they are not going to do. You know the old definition of insanity — continuing to do the same thing the same way and expecting different results. I think service providers have listened to that and said, alright, we are definitely not putting in another legacy softswitch anytime soon.