the video as a service (vaas) opportunity · legacy pbx marketplace, heavy cost and low margins...

Authored by:

John Drolet - Vice President of Business Development Robert Cooper - Director of Sales

January 10, 2015

The Video as a Service (VaaS) Opportunity

300 Brickstone Square, Andover MA 01810 [email protected]

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We don’t have to tell you that as a Carrier you face an ever increasing competitive landscape. The barriers to entry are much less than they were 20 to 30 years ago. Central office equipment has been replaced with soft switches. The ubiquitous nature of the internet creates connectivity to millions of applications running in the Cloud. Customers can conveniently receive and subscribe to these “as a service” offers, in many cases, over your (Carrier) network; although the upside of selling bandwidth seems to have no end. We are sure that in your board rooms and around the marketing water cooler, you are talking about effective ways to grow your business and we think the following report will help you do just that.

In this paper we will talk about “Carriers” as any service provider, large or small that provides “Network” based services to their customers. This includes LEC, CLEC, ILEC, Rural Coop, Facilities Based Providers, Managed Service Providers, Cloud Service Providers, Unified Communications Service Providers (UCaaS) or Hosted Voice Over IP Companies.

So the question is how does a Carrier enter the “as a service” marketplace? The short answer is “selectively”. With technology trends at their peak of performance, picking the right services to operationalize is the key to short term success while offering minimal strain on existing technical investment and resources. Picking a service that overlays on or matches the technical solution set in place, while providing minimal demand for cross training is also important. Options for premise based, hybrid hosted and 100% cloud delivered growth can be key considerations. Lastly, having a growing “as a service” market opportunity which creates consistent demand and an increase in Revenue per User (RPU) is critical. The following data will build a case that Video as a Service (VaaS) is the perfect fit for Carriers as it fits both technically and from a marketing perspective.

Enterprise Class - Video as a Service: A Huge Market Opportunity

First let us clearly identify the market opportunity for Enterprise businesses adopting Video solutions. Video in the workplace has been driven mainly from the boardroom. Purpose built Video Conferencing rooms with sophisticated equipment both audio and visual,

have driven the industry for years. Although some hardware friendly Carriers dipped their toe into this business as they did with the legacy PBX marketplace, heavy cost and low margins associated with inventory control, technical expertise, truck rolls, maintenance and support have driven most out of the business and back to their core competency of delivering “services”. Over the last few years several managed / web based services have evolved such as WebEx and Intercall also addressing the board room application with a one room / one presenter pricing model which can be restrictive and costly.

However, Video adoption is changing and it is being driven by consumer services such as FaceTime™ from Apple, Hangouts™ from Google, Microsoft Skype™ and Peer to Peer


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mobile device video, all of which are virtually pervasive now for consumers. Whether on Wi-Fi over your company’s broadband network, or over the cellular company’s macro data network, consumers enjoy clear access to this very personal service. In many cases the costs for these “value added” services are hidden in the cost of hardware or supporting service fees like email, advertising and subscription services. Consumers enjoy a vailed relationship with their technology provider who is getting millions of consumers hooked. VaaS can leverage this use case and bring the growing acceptance of Video into the enterprise, as a pay for service; offering enterprise class functionality while maintaining legacy connectivity. The highest growth for VaaS is being seen in small to medium enterprise (SME). As predicted in many marketing studies the user, rather than the technologist within the enterprise is creating this demand. See chart.

Video collaboration goes well beyond just video conferencing. People are social and they need to interact, share, see, trust, and work with each other synergistically. With businesses working across continents, and often with multiple suppliers, vendors’ partners and customer’s, ubiquitous collaboration tools have become critical to facilitate efficiencies and competitiveness. Video collaboration has thus become paramount to the success of cross functional teams or teams working remotely. Additionally, CIO’s are beginning to heed the call to extend communications, collaboration, presence, and social integration to all employees in the organization with anytime anywhere access.

The Competitive Landscape and Key Market Drivers

“92% of sales professionals believed that video collaboration would help them do their job better," according to Cisco report.

From 2013 to 2018, the fastest-growing business service is expected to be desktop or personal videoconferencing. Personal videoconferencing growth, specifically UC based, full multi-collaboration videoconferencing, has seen dramatic acceleration due to the higher quality and lower price of new services and products.

The availability of desktop VaaS offers, whether stand alone or integrated, and the explosion of tablet and mobile clients will further amplify video collaboration growth.

According to a recent Cisco report, globally - IP video traffic will account for 79 percent of all IP traffic (both business and consumer) by 2018, up from 66 percent in 2013. This percentage does not include the amount of video exchanged through peer-to-peer (P2P) file sharing.

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000

2012

2013

2014

2015

Peer to Peer Softclient Users

N.A Market Gartner Study


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The sum of all forms of video (TV, video on demand [VoD], Internet, and P2P) will continue to be in the range of 80 to 90 percent of global consumer traffic by 2018.

Over the top, Video and Web Collaboration services have crept into use over your network. “By 2015, nearly 200 million people will be collaborating via video conferencing”, says Wainhouse Research. Your company might even use one of these services like WebEx, Go to Meeting, Join.me and many, many more. The purposed based video conferencing justification is giving way to “ad hoc video” sessions stretching the use of video through cross functional areas of the enterprise. A recent study showed a high satisfaction rating across the following groups (source: VC Trends - Compare Business Products 2014-2105): Why do these business professionals value video collaboration?

o HR - Helps them manage talent better, interview applicants faster, leads toimprovements in recruiting, staff retention programs, and improves training delivery.

o CEO - Helps speeds up the decision making process, makes interacting with staff morecollaborative, fosters better relationships, and improved productivity.

o IT - IT professionals find it easier to manage a globally dispersed workforce, and qualityface time helps in assisting their professional development as well.

o Marketing - Speeds up decision making, helps increase productivity, brings dispersedteams together and improves training and creativity. Brainstorming, product launches,media and analyst collaboration all improve.

o Finance -75% of those polled found it increased their productivity, reduced travel,allowed sharing and discussion on spreadsheets and expedited decision making.

o Engineering - Engineering personnel found video collaboration particularly usefulbecause it allowed them to get faster agreements on concepts and plans, it helped inreducing the time to market, streamlining production and made experts available acrossthe company.

o Customer Service -Brought them closer to both their customers and their support teams.o Sales - 92% of sales professionals believed that video collaboration would help them do

their job better. It extended the reach of sales teams and improved customerrelationships. Sped up the sales cycle by bringing in experts to resolve any issues andimproved collaboration between sales teams who worked remotely.

These groups and their use cases present the bestselling opportunity for any VaaS offer.


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A Market in Transition

Many of the current VaaS players in the market have history providing service to the legacy Video Conference meeting room setups. As a result, most price their offer as a “Moderator” based pricing scheme, as typically these meetings are led by one key person. This “all in” licensing model gives control to one individual, and although others can attend the moderators meeting, the moderator can only run one meeting at a time. This requires the enterprise to purchase more licenses and creates a very hierarchical business process. As the data above indicates, the use case is changing to a more “ad hoc video session, on demand”. Users consistently complain that the moderator based delivery model is outdated and too pricey. Some have trended back to “free” VaaS services or applications from Google or Skype to get around this pricing model. However these products lack many of the enterprise class features and functionalities required to run effective workplace meetings. The real fix is an enterprise class, ad hoc video and collaboration solution that can grow with your customer’s usage and trends.

The MCU has held us back For anyone who has looked at what was behind the glitter of the Video Conferencing Room you know that at the core of this technical design is

a Multipoint Control Unit (MCU). The MCU “bridge” is the key area of multiplexing for inbound and outbound video sessions allowing all users to see each other in real time. On the Network side, gone are ISDN circuits which would dial up broadband on demand in replace of a fat internet connection large enough to handle the camera array of the users on all ends of the video call.

eZuce proclaims the MCU is dead. In place of it are software based solutions, like the eZuce SeeVogh™ solution, that accomplish similar and more advanced multiplexing of Video Streams all in a software based image. LAN and WAN designs can be leveraged to insure the best use of bandwidth when placing the virtual MCU in a company or a Carrier network (more information on this below).

Opportunity Cost The larger competitive point to be made here is the opportunity cost to the Carrier. Ownership and delivery of new trending services was always considered to be a core part of the Carrier’s competency. Capital costs and b infrastructure build outs often slowed the adoption of these trending services resulting in missed or never reached full market potential for Carriers.

With the VaaS opportunity the Carrier can sit back and just be a pipe, or be part of the delivery and packaging of a service that drives data on your network.

Carriers are facing a new competitive challenge

as unique services providers, especially with

VaaS providers who capitalize on selling a

bandwidth intensive service to their customers.

This new emerging threat of application

services being sold ad hoc is forcing Carriers to

rethink their business model and value chain.


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Carriers are beginning to recognize that the network is no longer a unique selling point to their customers – rather it is the services offered over the network that are of primary interest. So Carrier’s walk a tightrope, trying to figure out how to best implement a broad set of technologies in order to offer state-of the-art services to end-customers careful to mitigate the risk of making upfront investments in new technologies while taking advantage of the market opportunity. The Carrier can address these challenges in a number of ways, but specifically Carriers are investigating Managed Services as the potential best way available to strengthen their competitive position and enhanced services portfolio.

The use of managed and hosted applications is on the rise, as is the trend on the part of the Carrier to look at forming strategic alliances with applications specialist to not only manage delivery but go to market strategy as well. Tomorrow’s Carrier will diversify by offering unique or enhanced services, applications, and content in combination with attractive pricing. They will likely offer these unique and enhanced services, and content via a hosted platform they do not own, and may bring these products to the end-customers via a fully converged shared network infrastructure. The paradigm shift will have begun for the Carrier from being an organization focused on engineering and technology to becoming a nimble marketing brand that delivers innovative and sophisticated cutting-edge services to its customers.

It always comes back to the “User Experience” Along with the back office getting improved for the enterprise video, users are now enjoying a

much better experience when it comes to their hardware (need to perform video). In the Video Conferencing room there are still very sophisticated camera arrays which serve a purpose within the large environment. The advancement has occurred in Personal Computers, tablets, iPads, and cellular devices many now coming equipped with HD camera quality. Audio improvements with the introduction of DECT in the North American marketplace have provided HD Audio experience for headset users. So the net of this is that with some careful decisions on a sub $100 camera choice, and the inclusion of an off the shelf audio headset, users can join the conference with significant quality options at a fraction of the cost of a Video Conferencing Room. SeeVogh™ also offers a unique multi-camera array option, giving a telepresence experience for a net new Video Conferencing room for thousands, not tens or hundreds of thousands of dollars as compared to other offers.

The Value of Your Brand If you are established in your markets providing a white labeled VaaS should not hinder your market penetration. National brands tend to lack the service and support available through regional brands. Your unique packaging, pricing, and service delivery is what sets you apart. Your customers would prefer to do business with you and this provides an easy to capture, incremental recurring revenue stream. Ultimately delivering under your brand increases RPU and customer commitment. In the next section we’ll give you the steps to succeeding in this new business venture. In the next section we’ll give you the steps to succeeding in this new business venture.


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Steps to success in creating a VaaS powered by eZuce Inc

Step 1: A VaaS from eZuce is ready for Carrier adoption A Software Based Video and Web Collaboration deployment lowers costs and eliminates the technology barrier that once existed for Carriers to set up a VaaS. eZuce offers SeeVogh™ a completely software based, Enterprise Class, Multi Party Video and Web Collaboration Solution. With the MCU burden now resolved, this software only approach to the technology lowers upfront and operating cost significantly. The flexibility of the software architecture allows us to offer SeeVogh™ from the cloud giving the Carrier a diverse set of deployment options over time. So, eZuce can run SeeVogh™ for you (in our Cloud), run it in your data centers or run it in a Hybrid Cloud model. The option is yours. There is even an option to run SeeVogh™ in a Private Cloud for your largest Enterprise Customers. We are partnered with companies like IBM / Softlayer, HP Cloud and Amazon AWS as cloud partners, providing turn-key Cloud deployment. Our software is elastic (like the cloud is) and provides both self-healing and self-bursting capabilities unlike hardware based solutions of the past.

Step 2: Rely on us Our experience comes from developing and maintaining a worldwide VaaS network supporting thousands of simultaneous video sessions every day. This same software can run as your VaaS and our monitoring, auto-healing and diagnostics give us key insight to help run the network. We have a full set of API providing white label and various business process integration capabilities as required.

Step 3: Trial “is believing” Within 24 hours eZuce can have you up on SeeVogh™ sharing a Video meeting room with your colleagues and customers. The SeeVogh™ client(s) are free and can be downloaded at our website, Google Play and Apple iTunes stores. Our award winning interface(s) are very easy to learn and we have a host of online training tools to show you or your customers the benefits. We offer on site, speaker led training, although we prefer to use SeeVogh™ as a training tool whenever possible. We can private label your meeting room(s), and provide statistics on your SeeVogh™ use as required.

Step 4: Product Management versus Product Marketing We believe SeeVogh™ to be a ready to go, as an over the top service that will impact your go to product market plan and not burden your product management / engineering plan. eZuce has many years dealing with Carriers and realizes that products and services that need to get “engineered” into a Carrier network impact both eZuce and the Carriers return on investment. Therefore we productized SeeVogh™ to be a multi-tenant, service offer that you can turn up and run without impacting your other crucial elements. Consider our thoughts on the five “P’s” of Marketing SeeVogh™:


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• Product – SeeVogh™ is proven and ready to go. Ourroad map and vision is second to no one in themarketplace. Near term deliverables with WebRTCcan further benefit customers and Carriers alike.

• Place – Place is interesting with the VaaS. eZuce canlocate SeeVogh™ in your data centers or in a Cloudservice provider near your base of customers (orboth). Bringing this horse power more local to thecustomer, increases performance. By working within your network design for Quality of Service(QoS) compliance, we can increase this performance even more. Your customers will see thisincreased performance versus the internet delivered solutions. Although Place is usually aMarketing discussion around Retail store fronts, “Place” in the VaaS case can be leveraged as a“local or on net” offer for your local and on net customers and provides superior performanceover the competition.

• Promotion – This is your key asset. Your brand counts with your customers. Don’t let these overthe top VaaS offers take revenue from you. Brand your VaaS and start promoting it as anupgrade or as a free offer. Bundling of the solution to entice further broadband upgrades oroffering a limited trial duration with an upgrade option, are effective ways to move customersover to your VaaS. Also consider that;

o Carrier Sales people will resonate with the monthly billing revenue model which fits intomany Carrier Sales Plans already in place.

o Video is easy to sell because sales can do it, without technical back up. Consider givingall the sales team their own meeting rooms and requiring them to prospect customersfor free trial and demonstration of the solution in those rooms. If sales can do it then…you know the old saying.

o Video is a sexy promotional tool. Use it to sell other services you have. Use SeeVogh™as a teaching and learning tool for webinars and meetings.

• Price – SeeVogh™ can be priced on actual usage, not by some slider ruler prediction on whatlicenses you might sell. Costs include support and software assurance. Our API provides ondemand reporting on actual usage so you can monitor your growth over time. On the retail sideyou have many options (on what to charge your customers).

o Per User Pricing - Some of our Carriers charge per user, per month to access their VaaS,For example $5.00 per user. This is often 50 to 75% less than competing VaaS offers. Wecan do this because SeeVogh™ does not charge for client download or access (PC,Mobile, Tablet), SeeVogh™ does not require separate licensing for a moderatorcapabilities, rather, everyone can get this option and we provide virtually unlimitedmeeting rooms (IDs) supporting the ad-hoc video environment. Many enterprises usingcompetitive solutions will charge $40/ Moderator (meeting organizer). With the averagenumber of users in a meeting at 4 this means an average cost per session is $10/user.

o Charge per Meeting Room – This is a much more simple approach but can still beeffective in getting more customers to adopt VaaS. The meeting room is the key area offocus for the customer so aligning a pricing model with it can be a very easy and


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competitive option. This option also aligns well with Departmental adoption, and allows for departmental teams to get their own room and pay for it out of their own budget. Meeting ID’s are easily customized and can be set up as users Email address or a special URL like myVideoRM, providing personalization like some consumer class services.

o Run the software in your data center – eZuce also offers SeeVogh™ as a software application that you can run. The retail go to market can be what you need but the idea that you can run and leverage existing data environments is an option. We also find that in these cases further API development and integration into business processes can be accomplished.

• Profit – Only pay for what you use and maximize your profit. We enable you to focus on ProductMarketing for your customers, and eZuce will handle the back office. No proprietary hardware,minimal operating cost, a usage based license model, and an elastic cloud deployment allcontribute to higher profit for you.

Summary: The VaaS opportunity is here and the evidence to investigate the market iscompelling. Let eZuce show you a leanly architected, standards based, software solution whichcan be at the heart of your go to market plans. We would love to discuss the solution in moredetail with you. Please contact us for a free trial.

Contact us with any questions

[email protected], eZuce Inc Andover MA. USA

About the Authors

John Drolet currently serves as Vice President of Business Development at eZuce Inc. where he is responsible for strategic relationships. Robert Cooper is the Director of Sales at eZuce with a special focus on the Carrier go to market sector. Both have 20 years’ experience delivering hardware, software and services to Carriers worldwide. As former “Bell” employees working at companies such as AmeriTech, Southern New England Telephone, AT&T and Verizon they are recognized speakers and authored contributors within the industry. Considered pioneers in developing marketing strategies for NBX Corporation, 3com, Vtel, Citel Technologies, and Aastra Technologies they have established proven track records of success.

About eZuceeZuce is an innovative technology company that provides a visually integrated unified collaboration environment to small and medium enterprises. The company leverages a commercial open source software and service model to deliver industry leading value to its customers and partners.

eZuce is changing the way people collaborate within the enterprise. By emphasizing visual interaction, the human factor and user centricity, eZuce software and service solutions enable individuals and teams to collaborate on their terms, to be there for the business anytime anywhere. eZuce OriginTM (formerly known as openUC) is an open software platform that supports any end-user device while delivering virtually unlimited scalability, robust functionality and flexible cloud/on-premise deployment options. Combined with an open-source economic model, eZuce OriginTM slashes both operating and capital expenses to deliver unprecedented value among enterprise-class telephony and collaboration vendors.

the video as a service (vaas) opportunity · legacy pbx marketplace, heavy cost and low margins...

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