As 2016 draws to a close, let’s take a peek ahead to the coming year at the trends in technology and communications that will be impacting the enterprise in 2017. I will elaborate on each point and summarize with a key takeaway for each in the following fashion: There is lots of things happening in technology, blah, blah, blah etc.
Key Takeaway: Call Eclipse to help, they will know exactly what to do.
The below predictions are the sole opinion of NostraDaveus and I reserve the right to be completely wrong, though you may have a hard time getting me to admit it.
1. Merger digestion will lead to disruption
2016 was unprecedented for the amount and deal sizes of communications company mergers. Verizon and XO, Level 3 bought TW Telecom and then was absorbed by Centurylink, Windstream and Earthlink, and AT&T’s jaw-dropping $80 Billion purchase of Time Warner Entertainment were just some of the highlights. If history tells us anything, it’s that when huge telecom companies merge, networks are combined seamlessly and customer service improves dramatically. No, wait, my bad, I meant that the exact opposite thing happens. Network outages can be expected, customer service will take a beating as senior people who actually know what they are doing are synergized out of the company to achieve some of the financial targets of the merger. Executives from both sides will spend time in Machiavellian maneuvering in the new organizations focusing more on the power struggle than the customer experience. Sales teams will become a revolving door as many folks are pushed out or flee for the exits rather than spend two years trying to figure out the systems of the new company. The bottom line is that while many of the mergers were necessary and may even prove to be beneficial long-term, the short term reality of combining large companies is likely to lead to confusion and frustration for end customers.
KEY TAKEAWAY: There were many huge mergers in 2016. Synergies will need to be achieved in 2017. Synergies is French for your service is about to get a lot worse.
2. Divestitures will ramp up
The logical consequence of so many mergers is that the newly formed companies will take a good hard look at themselves and decide they don’t need all of the stuff they just bought or even some of the things they had before. We saw a lot of this over the last two years as large telecoms decided they didn’t want to be in the data center business anymore and the large U.S. LEC’s divested much of the copper infrastructure throughout the country. It’s very likely that most mergers will result in groups and business units being sold, spun off, or shut down altogether. Newly merged companies have a mandate to achieve savings and one of the quickest ways to do it is to get rid of low margin, underperforming, or non-strategic business.
Bonus sub-prediction: AT&T, Sprint, or Verizon will either sell or spin-out their traditional wireline telco businesses in 2017 to focus on wireless and/ or content delivery (you don’t really want your AT&T enterprise rep trying to sell you HBO as an add-on to your WAN, do you?)
KEY TAKEAWAY: Telcos will focus on what they believe are their key strengths leading them to shed assets and business units that are not in alignment.
3. SD-WAN and UCaaS will break through and cross the chasm
If you don’t know what SD-WAN and UCaaS are you need to call Eclipse immediately, so we can educate and illuminate on the importance of these two technologies to your business. Unified Communications as a Service (UCaaS) has been steadily gaining market share over the last few years as traditional PBX and premise based VoIP systems age out of production in client environments. SD-WAN was the breakout technology of 2016 with a whole slew of venture-backed providers making a big splash in the marketplace. The reason that I lumped these two technologies together is I believe that they are complimentary and will fuel one another’s growth. Each one of them is relevant and important on its own, but like peanut butter and jelly, the magic happens when you put them together (yes, I feel that strongly about PB&J). Any customer who has an MPLS or IP-VPN network with 18 months or fewer remaining on their contract needs to be taking a good hard look at SD-WAN either as hybrid with MPLS and internet or multi-access internet. The built-in network control, intelligence and resiliency of SD-WAN is the enabler that cloud UCaaS has needed all along. An SD-WAN implementation will ensure higher availability and better call quality and as PBX hardware manufacturers continue to struggle, customers will continue to migrate to cloud-based platforms.
KEY TAKEAWAY: MPLS WAN’s and premise bases PBX’s are being augmented or replaced with the next generation of communications technologies. It’s time to be planning your own roadmap.
4. The beginning of the death of (most) hardware and the rise of NFV
The writing is very much on the wall for the traditional hardware infrastructure business. The largest hardware companies are openly talking about their future as software companies. Their actions speak louder than words as Cisco laid off 15,000 workers near the end of 2016 and Avaya is shopping their contact center business as they ponder bankruptcy protection and reorganization. The one piece of hardware that will still be relevant in the near term future is the server, and the consequence of the ease and sophistication of server virtualization is what ultimately will usher in the demise of the hardware box. Infrastructure powerhouses will pivot toward Network Function Virtualization (NFV) in 2017 delivering the key functionalities of their appliances as software features. Routers, firewalls, SD-WAN, and WAN acceleration will all be available in different feature packages as a service on agnostic servers as appliances. You will still need a switch on the end of that server for now, but as wireless technology continues to improve, eventually evolution will remove that as well.
KEY TAKEAWAY: Get used to Everything as a Service. What used to be hardware will now be software feature sets on a server.
5. Sales channels will shift and consolidate
2017 will be a year of tectonic shift in who the enterprise buys technology from. As the largest companies in the space reinvent themselves, the traditional sales channels will have to do the same. The Hyper-consolidation of network, infrastructure, and software will force the sales channels to change as well. The largest companies in telco and technology are moving towards a channel first strategy that means you will no longer buy services directly from the provider, but through trusted value added partners who are aligned well with the providers. Value Added Resellers can no longer be one-trick ponies who only do one thing well, they will need to understand how to address client business needs by pulling together a patchwork of provider services that deliver desired business outcomes, not technology bells and whistles.
KEY TAKEAWAY: Your hardware, software, and telecom providers want you to buy their services through trusted partners like Eclipse.
I feel very strongly that all of these trends will take strong hold in the coming year and beyond. The thing that should be obvious to all is that the technology landscape continues to change dramatically and at a faster pace than ever before. It is the most exciting time to be in the technology business, and we look forward to continuing to be your guide through the ever-changing landscape.