Hackonomy – How BroadSoft Helps Service Providers Succeed with the Cloud
Author: Jon Arnold
Published: January 3, 2018
Innovation Takes Many Forms
Introducing new technology is never easy, and being successful is even harder. Some forms of technology gain traction faster than others, and the winners understand that it’s not just about the technology. VoIP has been with us over 20 years, and while it’s inherently superior to TDM, it hasn’t yet taken over the world. Then consider the iPhone, which just turned 10, and has had exponentially more success than VoIP in a fraction of the time. Of course, Apple has great technology, but we all know it’s only part of the story.
While technology clearly is important, as with the iPhone, it’s the user experience that really makes UC essential, especially if it makes team collaboration better. That’s where innovation really matters, and the key idea driving this analysis is how it takes many forms. Innovation doesn’t have to be radical, and small innovations can be just as important as big ones, which themselves are usually built on several incremental innovations that sometimes unfold over many years.
I’m focusing on innovation here because it’s never been more important. Everything moves faster in today’s digital economy, and with the cloud’s massive scale and economics of abundance, nothing stays a secret for long. Staying competitive is now all about agility, time to market and execution. With change being constant, new forms of value are constantly being created, often at the expense of legacy-based value, and that’s the disruption that threatens everyone in the collaboration space.
BroadSoft, Innovation and Hackonomy
Instead of doing a chronological review of BroadSoft’s innovation history, I want to focus on the present, and some inspiration drawn from their recent Connections conference. Two speakers really stood out for me, most notably keynoter Bonin Bough, but also BroadSoft’s chief digital marketing officer or CDMO, Taher Behbehani.
Bonin is CEO of Bonin Ventures, and being from outside our industry, I found his take on innovation really relevant, especially for things BroadSoft has done to get them to this point. His framework is called “hackonomy”, which he illustrated to great effect at Connections. I’ve written about this elsewhere, with the basic idea being that you need to break things to create new value in the market.
What worked before probably doesn’t work now, especially in today’s ever-changing digital world. The key is to create relevance for customers, and you do that by leveraging digital technology to engage on their terms, and to innovate around what represents value for them.
In the collaboration space, this means breaking away from the legacy world, products, models and thinking. Not everything you try – or try to hack – is going to work, but if you keep at it long enough, a winning formula for innovation will emerge – and that’s the essence of hackonomy. In this write-up, I am going to articulate how BroadSoft embodies this and to tie these ideas together with three examples from my perspective.
1. Powered by BroadSoft Channel Program
The Powered by BroadSoft program is a big part of their value proposition, but it’s not trying to mimic the oft-compared-to Intel Inside. While that’s been a very effective form of branding, the messaging is targeted downstream at the end buyers, not the PC OEMs. In a similar fashion, BroadSoft is an important driver for what carriers are selling, but the messaging is for them, not the end customer. Today, BroadSoft is pretty transparent to business buyers, so the Powered by BroadSoft branding doesn’t really resonate there.
However, that message does resonate with carriers, since they need to know that their partner for cloud services can really deliver for their customers. The hackonomy of this is about a much stronger value proposition where partnering with BroadSoft is about helping carriers be successful with cloud as they wean off of legacy services – and costly legacy infrastructure – and stay competitive in a very challenging marketplace.
I would need a much longer writeup to break down all the elements of Powered by BroadSoft, and will instead highlight key reasons that make it innovative. For carriers, what’s new is selling cloud services, and the legacy model that has served them so well for so long won’t support this. In terms of helping carriers today, that model is broken – they know that, but they don’t know how to fix it or adopt a better model.
BroadSoft has been serving carriers for 20+ years – they know the business, and recognize the bigger digital transformation story that their customers must adapt to. All cloud vendors have some semblance of a partner program, but with Powered by BroadSoft, the innovation with BroadSoft is two-fold. First, it’s built around digital technology, which is now driving everything – how we consume, how we build, how we sell, how we market, how we share, etc. If you’re not leveraging digital, it’s going to be much harder to stay competitive.
Secondly, Powered by BroadSoft is truly an end-to-end customer lifecycle program that is driven just as much by the business needs of the carrier, as it is by the technology needed to deliver cloud-based services.
BroadSoft’s customers – primarily carriers – are on a digital journey that is new for them, as is selling cloud services. There’s a lot to learn, and a lot at stake for the business. Carriers are only going to make this transition once, and they need to pick the right partner. To mitigate that risk, Powered by BroadSoft addresses the full journey, which they break down into three phases – selling, onboarding and adoption.
First and foremost, carriers need to get up to speed on sales and marketing in the digital age. This is not in their DNA, and as Bonin Bough explains so effectively, there is tremendous opportunity here when done right – and it’s a big part of how hackonomy helps create new value.
Once carriers get the hang of digital selling, the next requirement is to onboard their customers to cloud services. Again, this is new territory, and there are many steps from closing a sale, provisioning the service, implementing customer billing, to getting proper support resources in place. Every step is a moment of truth for end customers, and if the process isn’t smooth and painless, they won’t stay long.
With a seamless onboarding experience, the next stage is driving adoption and then renewal with end users. Now we’re talking about supporting the customer’s customers, and this is the true test for embracing cloud services. To be successful, carriers need as many end users using as many applications as possible. Not only does this make the platform sticky for the business, but it sets the stage for selling add-ons to drive new revenues. Below is a basic visual summarizing these core elements of the program.
Taken together, this represents an end-to-end partner program, and I could cite multiple examples for each of these three phases, but that’s for another time. The main point is that BroadSoft’s long history provides the knowledge to develop a comprehensive approach that doesn’t leave things to chance. If a carrier is going to break from their legacy model, they’d better do it right, and the innovation comes from covering all the bases to ensure success moving to cloud services. BroadSoft has done the hackonomy to figure this out, and that’s what carriers are getting with Powered by BroadSoft.
2. SaaS-Based Channel Innovation
There’s a lot to unpack here, but the main idea is to focus on service providers as a channel – a route to market for selling cloud-based services such as VoIP, UC and contact center. Innovation comes into play because historically, vendors sold the products, and carriers sold the services, mainly connectivity. With communications offerings now being primarily software-based, and the cloud providing an alternative to premise-based solutions, carriers face a very different environment.
While these changes open up new opportunities, the landscape becomes more crowded, and long-standing vendor partners now become competitors. This is another instance where the legacy model is broken, and there’s a place for hackonomy to create new value by strengthening carriers as a channel play. They need to break from the status quo and offer a new value proposition to position themselves as the best channel option for businesses to adopt cloud services.
As a starting point, the trump card that BroadSoft’s carrier customers hold is ownership of the customer. The relationship with customers is their most valuable asset, and to protect that, carriers must distinguish themselves from the other options available to their customers for cloud communications services. Consider four basic alternatives:
Direct from the UC&C vendors. This can be a good channel for large, global enterprises, where UC&C needs to integrate tightly with complex network infrastructure. In most cases, however, the vendor holds the balance of power, often locking customers into inflexible solutions.
Conventional channels. Many businesses rely on resellers, VARs, system integrators, etc. to vet the vendors and provide the best-fit solution. This model remains dominant for many good reasons, but in the age of digital transformation, most players here are scrambling to transition from selling hardware to SaaS. Very few can effectively support cloud-based services, especially anything more than basic VoIP. As a channel option, they still have critical mass, but are really best-suited for entry level deployments, and don’t offer the end-to-end support that Powered by BroadSoft has.
OTT providers. Unlike the carriers that BroadSoft generally supports, these operators don’t have network infrastructure of their own, and often have proprietary platforms for cloud services like UC and VoIP. They are certainly an important and growing force in the market, but have limitations in terms of breadth of applications as well as ability to scale globally. While their platforms can address the everyday needs of most businesses, their support programs tend to focus more on customer acquisition than providing the end-to-end lifecycle coverage of Powered by BroadSoft.
Microsoft and Skype for Business (SfB). I’m trying to be vendor-neutral, but being so ubiquitous, Microsoft warrants special mention. Despite not having native solutions for voice or contact center, SfB is major force in the UC&C space, and everyone listed above competes against Microsoft to some extent. While SfB certainly represents a path of least resistance for cloud services, Microsoft doesn’t offer support like Powered by BroadSoft. As such, it may be easy for carriers to partner with Microsoft, but ultimately, that brand will overshadow the carrier, which could undermine the relationship with end customers, and limit their upside as they move into cloud services.
Aside from these four alternatives – all of which are well-established – there is an emerging class of competitors that can be a viable option to BroadSoft. To varying degrees, these players have a foothold with cloud-based communications offerings, and all are poised to gain momentum in 2018. While not native to the communications market, the names should be familiar, namely Google, Amazon, Facebook, along with Slack and others like them offering team messaging.
3. Digital Go-to-Market
A subtler differentiator and point of innovation is the overall approach taken by BroadSoft to marketing. For the most part, tech companies are engineering-driven, where marketing is often an afterthought. This may appeal to old-school legacy hardware buyers, but as Millennials move into decision-making roles, they’ll be expecting much more in terms of marketing savvy.
BroadSoft clearly understands this, and has built their marketing engine around two pillars you don’t normally see in the B2B tech space. First is the willingness to adopt B2C methods to sell cloud services, and second is the focus on digital technology to drive marketing programs. These are very much at the heart of Powered by BroadSoft channel program, and reflect the approaches Bonin Bough talks about.
During the Connections conference, I was struck by how well Bonin’s messaging was reflected in Taher Behbehani’s presentation about BroadSoft’s GTM approach. Just consider his title – he’s not the CMO, the title his peers usually go by – he’s the CDMO – Chief Digital and Marketing Officer. Sure, it’s just a name, but that’s part of the subtlety I’m talking about. Yes, C-level titles are morphing into all kinds of warm and fuzzy monikers, but this one speaks to something that really will create winners and losers.
That approach really isn’t native to B2B tech companies, so kudos to BroadSoft for bringing Taher to the role. Aside from an extensive tech sector marketing background, Taher’s mix of B2B and B2C roles with the likes of Amex, Time Warner Cable and Arbitron/Nielsen provide a solid grounding, not just in relationship marketing, but digital media. This is not the usual background for our space, and the fact that CEO Mike Tessler saw the fit with Taher speaks to the entrepreneurial culture BroadSoft has always had. Not only was there a like-mindedness about the need for digital and B2C elements to drive Powered by BroadSoft, but also the need for a cross-functional approach to develop metrics across the carrier’s value chain to make them a stronger channel partner. That’s a pretty broad mandate, but it shows how the overall strategy is part of the innovation story, in addition to the mechanics of Powered by BroadSoft.
To home in further on why digital GTM is so important, consider the companies Taher had been with previously. Not only do they know how to market effectively to consumers, but they also know the digital marketing landscape, and what it takes to move today’s consumers along the journey from awareness to interest to engagement to trial to purchase and beyond. Managing the full customer lifecycle is the lingua franca of today’s digital marketing, and Taher has brought this proven approach to BroadSoft’s B2B world with a fine balance of B2C marketing-savvy, and the problem-solving mindset of an engineer.
I’ll provide one example here, and it pertains to the third phase of their Powered by BroadSoft framework – driving end user adoption. BroadSoft has developed microsites as selling tools for carriers to make it easier for end users to adopt these cloud-based applications. Consider something as simple as a website with FAQs to address the top 10 issues faced by end users, such as setting up voicemail or using call forwarding. Being built on a digital template, carriers can easily customize them to add local market references or offer various language options. Furthermore, they can brand the sites to reinforce their direct connection with customers – this isn’t about the BroadSoft brand, it’s about the carrier.
Why This Matters for Carriers
As a way of summing up, the main takeaway is that carriers of all types are facing the same pressures of digital transformation and providing cloud-based services. Conversely, the market opportunity is large and it’s still early. During Taher’s presentation, he cited that cloud penetration is only 11% for UC, 9% for contact center and 1% for team collaboration. All told, he foresees a $43 billion cloud market, so there’s a lot at stake for the BroadSoft service provider channel.
While carriers are just one channel – route – to market, they at least have an installed base, and Powered by BroadSoft has been developed to help them defend that base and grow out the revenue potential. The key to success is to be ready now with an end-to-end value proposition that leverages the power of digital marketing. This is where my earlier mention of Google, Amazon and Facebook comes back into play. Aside from their massive scale, they are all very adept digital marketers, and this may be biggest reason of all for the BroadSoft channels to get with the program.
Breaking from the status quo is going to be necessary to stand out in this field, and with such a large untapped market for cloud services, there’s plenty of new value to be created. I’m sure Bonin would agree this is the essence of hackonomy, and a well-considered approach, not just to help carriers remain the channel of choice for existing customers, but to create a new value proposition for what the channel needs to be as other businesses consider their journey into the cloud.