Sunday, November 02, 2003

Telirati Newsletter #19

Here again we provided a healthy slap on the fanny to a CPE telephony industry that not only failed to heed the call, remains as much asleep today as it was then. Maybe when I go shopping for that Cisco or 3Com IP PBX I will see some inkling of these developments.

Telirati Newsletter #19: Envisioning the Telephony Future, the Small Business Edition

I have, in previous newsletters, commended the virtues of visualization, of picturing an outcome in your mind. In telephony, sitting down and doing some serious visualization is in order, because the industry seems blocked from advancing by some unknown force. Visualization makes such impediments visible.

Visualization is also useful because it makes one see a situation in sequence, and from a particular point of view. In this case, we will start from the point of view of a small business proprietor buying communications capabilities for his business. From his point of view: “I gotta buy a phone system.”

Get inside his mind, shove your way past the sports scores and the concern over his daughter’s preferences in boyfriends, and you’ll find a small slice of mind share available to deal with how his business communicates.

Does he see the world the way we do? No: Does he see that computers and telephony are converging? No. He mainly sees his phone bill. If it’s too high, he knocks heads in the office and figures out why. If we are lucky, his phone bill is high for some specific reason, like he has a customer or supplier in some faraway place with high telecom costs. Does he fax a lot? Some, but not enough to bother with a fax server. Does he have a call center? No. At best he has a salesman motivated enough to be on the phone all day. Does he have any clearly defined application of telephony in mind? No. He just needs to call people and have people call him.

OK, we’ll do a focus group. We’ll ask the customer! Customer, what do you want? “I want youse not to ask me so damn many questions about phones, got it?” Mostly, the customer wants answers, and not to be troubled. This is an important difference between selling a product to Fortune 500 corporation and selling a product to your local small businessman. The fortune 500 corporation has a person whose job it is to make an intelligent and informed decision. This person finds satisfaction in complex comparisons. You can build a great relationship with people buying your products in large companies. They will practically design your product for you. Not so the small businessman.

Look in your local yellow pages, especially if you live in a small town: Insurance agents, real estate agents, loam and gravel, septic tank pumping, propane dealers, driveway pavers, exterminators… This is not a think tank waiting to be discovered. All of your neighbors who are actually interested in the technology behind your product work for big high tech firms, or they make incredibly expensive handcrafted flutes, and take 20 orders per year on an ancient answering machine. This is not a market that will design your product for you.

Back to visualization, back to inhabiting your customer’s mind, which, if not introspective, is at least unguarded from this type of examination. So far we find a mind that responds well to the way telephone systems used to be designed: over-engineered, bullet-proof, trailing-edge, mysterious. Any un-PBX that wants to make headway will literally have to respond to a competitive analysis versus a conventional PBX where all the strengths of the conventional PBX are prioritized at the top of the list. Unfair! But required. Look at the requirement this way: Unless the system can be sold without telling the customer it is an un-PBX, it is market-limited.

What about the way phone systems are sold? How does this mind respond to the telephony channel? Mostly, he’s annoyed: He doesn’t want to understand his telephones, so the un-PBX people have no chance with him yet, but he feels taken advantage of by the mystery and obscurity of telephone systems. Where to look for an opening? Computers, natch.

If the customer has no computers, or an old hodgepodge of systems with a NetWare server that has not been upgraded in five years, he is going to be a tough sell. Unless your system really truly can sneak in without being outed as un-PBX, skip this prospect. If, on the other hand, the customer has a server, there is hope. If, furthermore, the customer is connected to the Internet, there is quite a lot of hope. Now why, having painted a portrait of the customer as troglodyte, do I now posit he has a server on the Internet? Everybody has a phone system, but what is the market penetration of Internet connections? Am I mad? Am I suggesting an approach that will drive a telephone system, that should be a mass-market item, irretrievably into a niche?

The answer is in the fact that now the Internet is more important than telephones. The Internet has a deep hold on people not normally motivated to hassle with computers. I could see years ago that something was up: people who could not be bothered to upgrade their systems or applications software, were voluntarily wrestling with add-in TCP/IP software for Windows 3.1 and the early primitive Web browsers. The same kind of people that don’t care about un-PBXs, and who don’t want to be bothered about whether their phones use the same wires as their network, care deeply about the Internet. I recently read an article about the high market valuation Yahoo has, in which this line stuck in my head: “The Internet is like television in the early fifties.”

Think about that. That’s an idea the guy with the Sans-A-Belt slacks can get his head around. It’s like the early days of TV. Who would not see the importance of that? TV defined consumer electronics for two generations. Losing our TV manufacturing was a national crisis worthy of intervention by the federal government. The Internet will be way bigger than TV. Next to the importance of the Internet, marketing messages about the cost of wiring to desktops and the benefits of having your phone system run NT pale to insignificance. You will not move the customer off the mark without hitching your message to the Internet.

Hitch your message, and your product, to the Internet. Visualize how that might look: The user sees he telephony server as a Web server. “Installation” of client software consists of giving users a URL to visit with a Web browser. There they find a Web site they log into to place calls, use directory services inked to the Internet, and get their voice mail. Logging in to this site from home produces the effect of turning the user’s home phone into an off-premises extension, or, if he has no second line, using an H.323 client for the OPX.

Visualize what’s here and what isn’t here: There isn’t any client software or hardware installation. This implies the system has to have handsets that can, at least, go off hook in speakerphone mode on command from the un-PBX, so that on-screen commands don’t have to be coordinated with lifting a receiver on cue. This is an off the cuff example, so OPXs might not be the killer app, but this example does integrate the Internet in a way almost all users can grasp and use. Is there anything us telephony geeks like about un-PBXs visible to the user? No. Everything we think is cool about using IP for telephony is boring to users of phone systems. Importantly, this system could be installed in an office without a computer network, and the users would be unaware they were using an un-PBX.

These are the conclusions we can draw from this visualization session:

Follow the Internet. Small businesses with servers and, at least, ISDN or fractional T-1 Internet connections have already paved the way for computer telephony by modernizing the computers and network they have. The Internet is more important than telephones.

Don’t sell integration. Put the customer’s phone system in a separate server. Provision it for high reliability, with an UPS, remote rebooting, etc. When he’s happy with it, sell more integration, with e-mail, system management, and applications. Be patient. The follow-up sales opportunities will come.

Sell comfort. Make the system simple, reliable, un-intrusive, and undemanding. Brand it. If your brand isn’t strong, find one that is and swallow your pride. Or spend the money it takes to identify your brand with a comfortable purchase.

The use sees the phone, not the box. So far, un-PBXs have lame handset support, with kludgy PC-based interfaces or analog handsets that lack too many features compared with proprietary handsets on conventional PBXs. The un-PBX needs an un-handset.

In the next newsletter we will tackle how to package and move a product like the one we visualized in this newsletter through the channel.

Copyright 1998 Zigurd Mednieks. May be reproduced and redistributed with attribution and this notice intact.