As enterprises manage unified communications platforms on a global basis, Steve Flavell, CEO & Co-Founder, LoopUp, says multinational cloud telephony providers are emerging to address inefficiencies created by fragmented, country-by-country telecoms procurement.
In a world where enterprises now manage their unified communications (UC) platforms, such as Microsoft Teams, on a global basis, why are these same enterprises all too often still procuring and managing telecommunications services on a country-specific or regional basis?
Surely there would be material efficiencies and cost savings to consistent global management of all communications – a truly ‘unified’ approach – rather than the inconsistent and disparate management of telecoms?
The answer lies in the legacy and indeed current business models and chosen strategies of the big telcos. The solution lies in a new breed of multinational cloud telephony providers.
Telecoms: a rapidly restructuring industry, post pandemic
The modern telecommunications industry has been restructuring at pace since the pandemic, as it reinvents itself to serve the demands of remote and hybrid staff and teams in the modern workplace.
The big telcos may well have led the first restructuring dimension but they have more reluctantly joined the bandwagon of the second. Their broader business model simply isn’t suited to the third.
From on premises to the cloud
To be fair, the big telcos were at the forefront of the industry’s first restructuring dimension – the shift from on premises implementations to cloud-based services.
In this shift telecoms essentially became just another form of data service delivered over fibre and 4G/5G broadband network that they themselves provided. This perfectly aligned with their broader strategies as network operators.
Critically, moving services to the cloud enabled users to make and receive phone calls wherever they had Internet access, be that at work, at home or on the move.
Their phone numbers were able to travel with them rather than being tied to a physical desk or location. Furthermore, enterprises were able to strip out the legacy switches and equipment from their offices and sites.
This freed up the time and cost of supporting, upgrading and replacing that equipment.
The rationale for users and companies alike was sufficiently strong that 71% of the telecoms market had shifted to the cloud by 2024.
From standalone to UC-integrated
The second restructuring dimension suited the big telcos far less. In the end, however, it was unavoidable due to customer demand.
This shift involved the integration of telephony into broader UC platforms, such as Microsoft Teams.
Out-of-the-box Teams is incredibly rich – messaging, channels, meetings, video calls and much more – but telephony is the missing piece that needs specific and additional integration.
More and more companies have understandably been doing this integration to achieve ‘truly unified’ communications, from both a user experience and IT management perspective.
Furthermore, it also means that telephony content can be included in the enterprise’s AI data set for fast-growing agent capabilities such as Copilot.
This shift to UC-integrated Teams telephony was by no means instantly popular with the big telcos, given a significant proportion of the value added was provided by Microsoft through its cloud ‘Phone System’ functionality.
Microsoft’s ability to monetise that through license extensions effectively impaired profitability for the major telcos.
In the end, customer demand won and now more than a hundred telcos have joined the bandwagon on Microsoft’s Operator Connect and Direct Routing programmes.
From geography-specific to global
A third restructuring dimension is now rapidly taking hold in the multinational enterprise world.
Until recently, multinationals have necessarily been working with multiple, often tens of, country-specific or regional telco vendors.
Each comes with its own contracts, tariff structures, administration portals, support services and invoices.
But why would these multinationals want to maintain such a regional patchwork of telco vendors when they are now managing Teams on a singular global basis?
Not only do they want their telephony integrated with their UC platform but they also want the management of the whole communications stack to be globally consistent.
Why have tens of telco vendors when you can just have one?
Enter a new breed of multinational cloud telephony providers
Global service provision simply isn’t suited to the big telcos because, primarily as broadband service providers, their businesses remain physical in nature.
What was once copper wires into buildings for telecoms is now fibre into buildings for broadband. The physical nature of those ‘last mile’ connections simply isn’t conducive to a global strategy.
It is this defence against the big telcos, combined with the size of the market opportunity in Microsoft Teams telephony and the compelling customer business case for multinational consolidation of vendors, that has led to a new breed of multinational cloud telephony providers.
These providers capture all three industry restructuring dimensions: cloud-based, UC-integrated and multinational service provision.
With one global vendor, multinational businesses can avoid the inefficiencies, wasted resources and fragmentation of working with multiple telcos in different regions.
They can instead move to a simplified world of one global contract, one global tariff and one global management portal.
