Transcription
Hey everybody. Uh, what a great Fleet Week. Uh, we've had a great week of sessions. Uh, lot of great news from this session.
On Monday, we announced that we've added WebEx support to our platform. So now we're supporting the three major collaboration platforms that customers are already using, uh, to get work done, and now we're modernizing communications into those. So, Microsoft Teams, Zoom, and WebEx.
Uh, Tuesday, we had a great day for our partners. We announced our new partner program, and we had Peter Rzinski do a really, uh, insightful training for partners to help them understand market opportunity, uh, how to get customers excited about what's going on in the market, and how to prospect and ultimately succeed in this new economy.
Uh, today we announced the new Cypio plan. So, we're modernizing not just calling, but communications, uh, into these environments with really aggressive, uh, solutions for our customers to further accelerate their transition into the modern workplace of today and tomorrow.
Which leads us to this guest. I'm really excited, uh, to welcome back Patrick Watson from Cavell. Uh, he's going to share some of the research that Cavell has done on the intelligent workplace and what customers not only want, but need from their technology platforms and infrastructure to succeed in today and tomorrow's economies. Welcome, Patrick.
Thank you for having me, Steve. And it's, it's been really interesting, uh, to see some of the sessions, uh, that have been taking place this, this week at Fleet Week. And I think a lot of the stuff that, that you at Cypio are working on for your partners and end customers really resonates with a lot of the, the, the research that, that we're doing at Cavell. So, so really excited to talk about some of that today.
Awesome. Thank you. Let's just jump in and let's talk about the big picture. What are the top two to three strategic goals that buyers have for their communications platforms over the next three years, according to the research and your latest surveys?
Yeah, so for anyone who, who, who's not aware, aware of Cavell, we're an independent research firm. We've been doing research in the communications sphere for more than 15 years now. And every year we survey tens of thousands of businesses globally, um, across the world about their uses of technology, their attitudes towards technology, um, and, and their ultimately their uptake of, of different technology. And what you will be able to see, uh, on the slide here is, uh, the top three communications priorities over the next three years. So, this was a survey, uh, of more than 2,000 businesses across North America, uh, and Western Europe, and we asked them what were their, their key strategic communication goals over the next three years.
And as you can see from the graph on the right, cost reduction is a key priority for so many businesses. Uh, every time we do these surveys, cost never goes away as a primary factor. Businesses are always looking for return on their investment and value for money. So making sure that solutions fit into their budgetary constraints, uh, is, is, is a really important factor. And pretty much every survey and question that we do, cost appears amongst the top three requirements. So having cost-effective business solutions where you can offer ROI to your customers is never going away, never going to go away. It's always going to be a factor. So, so cost, we pretty much take as a given.
The, the really important things that I wanted to, to highlight from this slide. So, I just picked the top five here. We gave all of the customers that we spoke to a list of about 20 options and then, then they could also write in as well about if they had their own specific communication, uh, goals. But what I thought was really interesting here is the, the, the second most popular strategic priority was using AI. And I realize using AI, and Steve, we've talked about it this week in a number of sessions, is, is quite a, sort of nebulous term. So when we, when we drill down in that, into that a bit and ask enterprises, what do you mean by using AI? Generally, they want to use artificial intelligence to drive better efficiency and better productivity within their businesses. And again, I think that's, it's quite a loose use case in terms of being able to improve productivity and efficiency. How exactly do they, do they, do that? And I think a lot of that, Steve, comes down to some of the solutions that, that you at Cypio are looking at and your partners are looking at. Often customers need help to understand those tangible use cases. So whether it's using transcription within Microsoft Teams or WebEx or Zoom, whether it's using auto summarization and auto, auto action items to, to create that additional efficiency, uh, from a customer basis. That's a really key focus for businesses. They're hearing a lot of hype about AI. Lots of us are using it in our consumer lives and lots of businesses are thinking about, how do I use AI in my business? How do I help my employees become more productive and more efficient? So AI, a really key focus.
The, one of the other, the, key factors which you see on the right here is cybersecurity and compliance. And I think that really strongly correlates to this demand for AI. As we all know, in order for artificial intelligence to be leveraged effectively across the enterprise, your underlying data is, is the key foundational element of that. If your data isn't accessible and readable and in the correct context, then ultimately utilizing AI is going to be extremely difficult. So what we've seen is as there is rising demand for the use of AI, more and more businesses are focusing on the security and compliance around their data, making sure that that data isn't hackable, that it's not going to be able to be ransomware. So I think there's a real correlation between demand for AI services and also increasing demand for for cyber security, cyber security and compliance to make sure that data, and that's in whatever platform that might be, a UKcast system, CRM system, or a CCAS system, uh, is secure and compliant with local regulations, whether that's regulations in the US, we know there are very stringent regulations in the EU around data sovereignty. So those two, both use of AI and cyber security and compliance, really tie together.
And one of the things that I want to talk about, uh, in more detail later on, is customer service. Customer experience and customer service is a really vital differentiator for so many businesses. Increasingly, uh, in a, in a global economy, you're encountering new competition from elsewhere in the world. How do you differentiate as, as costs are driven down? One of the key ways you can differentiate is with your customer experience provision and with your support provision. And providing better customer service, providing better customer experience, uh, is a key strategic priority for a really significant proportion of businesses.
And then, and then the final thing which I wanted to highlight on this slide is, is easier and better telecoms management. So many businesses have got used to having to spend a huge amount of internal time and resource managing their telephone estates. But now with solutions that I know you've been doing a lot of work with at Cypio and your partners in terms of automating a lot of the management, provisioning, and administration of telecoms, there are solutions out there that can really help businesses reduce the amount of overhead and the amount of internal spending, uh, that they're having to do in terms of telecoms management.
So, as I said, these are just the, the top five that came back from that survey of more than couple of thousand businesses across North America and Western Europe. But I thought these, these five challenges really relate to a lot of the, the, the things that we've been talking about, uh, this week during Fleet Week.
Yeah. And I think one of the, one of the villains in that story is fragmentation. You know, if you look at a lot of those responses, cost reductions are obviously one thing, but the fragmentation has led to out-of-control costs. You know, that we, the way we've built technology in the past with best-of-breed, uh, multi-vendor deployments is starting to kind of recede into best-of-suite. You know, a lot of customers that I talk to are looking at this saying, "Do I really need a standalone, you know, video system, or do I really need a standalone phone system when I have that capability in this platform?" And more and more of them see fragmentation as an enemy to cost, but also to the rest of what you talked about. Um, you know, AI, if you don't have all of your data consolidated and everything's happening in one place, you've got different AIs, you got different AI algorithms, you got different AI results. Um, you know, you talk about cybersecurity and compliance, that is a, that is the vulnerability is the chasm of fragmentation between platforms and this one's out of sync, or this one's out of date, or this one's out of compliance. Um, and, you know, all the way down to, you know, juggling all the balls, you know, the telecom expense management, telecom management overall is just a, a giant challenge.
So I know Cavell has laid out a vision for the intelligent workplace, uh, where you guys see unified communications, contact center, CRM, and analytics all working together. Um, you know, we just unveiled the Cypio Connect plans this morning to offer customers more than just calling. So calling, texting, analytics, pro services. Why do you see this convergence becoming a priority for buyers at this moment?
Yeah, I, I think what you, what, what you've just articulated and what you've been talking about during Fleet Week from a Cypio perspective really aligns well to a, a hypothetical concept Cavell that we're talking about called the intelligent workplace. And what we've done through that, uh, enterprise research that I talked about previously, you know, those surveys of thousands of businesses, is try to articulate what we think the, the business of the future wants to look like. And we've, we've come up with this concept of, of the intelligent workplace. And I, I'll explain a little bit about what we mean by that. And you can see it in the, in the diagram here.
We know that businesses want to communicate, collaborate, and analyze data. And they don't, to your point, Steve, just want to do that across systems that were once siloed. So if you look at, uh, the, the, the previous sort of generations of technology, you might have had your, your PBX system in one place, your contact center system in one place, often on-premise, siloed, very little integration between them. You might have had your CRM system in the cloud, but with little linkage between the UC system or the contact center system and the CRM. And then your productivity suite, often provided by Microsoft or Google, sits separately to that.
What we've, what we understand from businesses now is that they want to be able to leverage intelligence across their technology ecosystem stack. So it's not just within one siloed place. It's not just having being able to apply AI to, to UCaaS, for example, looking at transcriptions and recordings. They want that seamless integration and, and connectivity between those different systems. And what allows them that, what that allows them to do. If you can integrate these key business systems, your UCaaS system, your CCaaS system, your CRM, productivity, whatever that might be, if you can integrate that using APIs, your software development kits, you can allow data to flow more easily across these different systems through those integrations. And that allows you to really leverage data intelligence on top of that and utilize the benefits of artificial intelligence across your entire technology ecosystem, not just siloed in one aspect of the business's technology.
And you mentioned security and compliance and the, and the potential vulnerabilities that fragmentation or silos leave. You're absolutely right, Steve. What we found from research is that businesses are more likely to be vulnerable to security threats if there are the more points of entry. So the more siloed, isolated systems you've got, the potential increased security risks there are. So when we talk about this concept of the intelligent workplace, not only do you want this integrated, seamless flow from these business systems, but also you want to be able to understand that and layer security and compliance around it to ensure that that your business is as secure as possible.
So I think what you've been talking about during Fleet Week and some of the announcements that, that you at Cypio have made, I think really aligns very well to this, this concept that we're talking about at Cavell about this integrated intelligent workplace that allows data to flow across these systems, integration between all these different applications, and then you can layer artificial intelligence and data intelligence on top of that, all whilst maintaining a secure and compliant infrastructure. So, so that's where I think it, it really aligns very well to what you were just talking about.
So, aside from the most common thought that comes to mind when I ask this question, uh, you know, because obviously your customers may end up finding a different provider. Um, what are some of the risks for partners and providers who don't evolve to meet these integrated expectations? You know, we all love to kind of fall into our, our lane, you know, and I'm going to stay in my lane, you stay in your lane. And, you know, in the old days where all of this stuff was standalone purchases and the IT leader had, you know, a telecom space and a telecom stack and a, you know, a, a collaboration stack and, and, you know, all these different stacks and then they had this giant architecture of from above what my IT stack looks like. As all of these things are starting to converge on the customer side, you know, partners need to evolve. You know, they're, they're at this, this intersection a lot of times of evolution and revolution. And, and, you know, how do you keep going down that path of, I got to stay current. I got to keep moving where the market's moving. So, uh, long-winded way of asking, what, what's the risk if you don't evolve?
Yeah. Well, well, I think, I think you hit on the, the, the primary risk first up. The more services that you can provide to an end customer, the better your customer retention is. The more complex an estate, the more areas that you're adding value in, and this is shown in our research numbers, uh, in inherently correlates to to your customer stickiness and your customer retention. The more you can help across these different integrated systems, the, the, the more areas that you provide as a, as a service provider is absolutely key in order in order to maintain customer relationships. The more areas that you're helpful in, the more difficult it is, or the, the less likely a customer is to look to migrate away from your services.
On a secondary point, if we look at a financial aspect, if you, as you said, Steve, previously we had very siloed providers, just like we did siloed business systems. You had a PBX vendor, you had an IT vendor, you had a CRM specialist. That only gives you a small proportion of the end-user business pie. If you only sell PBX solutions, you're only able only ever going to be able to access the PBX proportion of that business's budget. If you can offer services across the suite, UC services, maybe formal contact center, informal contact center, maybe CRM, maybe analytics, call recording, those other value-added services that equip there, you're actually opening up a much larger proportion of business, of, of business revenue that you can generate, uh, for yourself. So I think there's, there's a, key financial aspect there into opening up, you know, many more channels in terms of being able to sell services, uh, to customers. And, and the sort of final point there, if you don't look to offer a more holistic selection of services, you're potentially not meeting the requirement of the modern business who is looking at the intelligent workplace. Our research has shown that buying decisions were previously often within technology, they were very much a tech-led purchase. It might have been the IT manager who was ultimately responsible for procurement of the contact center system or the PBX system.
Actually, our research shows now that that decision from a business perspective is taken by a much more holistic range of providers. So you want to be able to offer solutions that help all of those different business personas. With any business, that might be a sales manager, it might be an HR director, it might be a CFO, it might be related on the financial side. The, the, the decision-making process when it comes to technology purchases is also much less siloed to one individual. It's much less likely to be a tech-led decision. It's much more likely to be a holistic decision across the business. And by offering more and more of their solution stack, you can reach more and more, um, of those buyer personas. And I think that, that really reaches into the, the sort of final key point here. If you look at what, uh, technology providers, and I deliberately use the phrase technology providers rather than communication providers, if you look at the solutions technology providers are offering, their portfolios have grown massively over the last few years. So if you're not offering a converged portfolio with all the benefits that that brings, you are potentially losing out to a competitor who actually does have an integrated UC and CCC offering, for example, and can offer the businesses some of the benefit of that. So I think the, the, the risks are, are multiple in terms of losing customers by poor customer retention, missing out on, on, on business revenue, not reaching all of the key stakeholders in a buying decision, and potentially being edged out by competition who are looking at a, a more converged, broader portfolio and taking that to your customers.
So I want, I want to run a thesis by you, Patrick. One of the challenges that when I talk to partners today is that they're at this intersection of evolution and revolution. And, you know, a lot of the partners have evolved from, you know, coming through the, the ranks of selling long distance and circuits or selling standalone phone systems. And they evolved in 2020, um, to, to the unified communications as a contact, as, as a, as a service space to help serve those customers in 2020 that needed something overnight. It was a, it was a forced evolution, but it was an easy evolution, right? And now they're looking at this, this, they're being told a lot of times that there's no more steam in that space. You, you need to take a left turn onto revolution. You need to learn contact center. You need to learn AI. You need to learn cyber. You need to learn all of these things. But the challenge that a lot of them face in trying to make that left turn is that not only is it all new technology that I've got to, you know, rapidly come up to to speed on to be a subject matter expert that my customers depend on, but number two, and you hit on it, it's that buyer persona. You know, a lot of times we, we tell partners that, you know, the, the buying decision in contact center is made by the contact center supervisor, not the IT leader. And that creates a challenge for, for partners because a lot of them are connected to the IT infrastructure. They're not connected to the rest of the line of business. So, so there's this again, a giant chasm between who I'm talking to as a partner and who I need to talk to inside of the business. But I'll come back to your research. Problem point one, you need to lower costs. The, the problem point, I think it was five, telecom expense management.
The fragmentation of these procurement processes has created a challenge for the customer because they realize that, hey, just letting the contact center department go buy whatever that, you know, procure whatever they want for them because cloud just enables it. I don't have these pre-requirements. I don't need to wait for infrastructure to get up to date. So, you know, if I need to start supporting omni channel, I just go out and get it. Has led to that challenge. And I think there's a tremendous opportunity. This thesis, this long-awaited way of getting to the thesis is that this is actually an opportunity. It's not just a risk, but it's an opportunity for partners to use their connectivity with the IT technology buyer to gain access to those buyer personas because the decision needs to be more holistic. So, it's not that, hey, I got to pick the right horse or I got to find my way to this person or that person because they're making decisions on an island. The business is actually flying all the decision makers to the same island. So, as long as you've got one bridge there, that's an opportunity. Thesis, good, bad, what do you think?
No, abs. Absolutely. I couldn't agree more. The, the, the fact that, as I said, when we're talking about risks, I, I think it's, it's a challenge, but you're right, it is absolutely an opportunity for your partners who are already engaged with those customers. They're already in a trusted advisor role. I, I completely agree. The, the primary piece is being there and talking to someone of value. And just because their relationship might be with the, with the comms manager or the network manager doesn't mean that they're going to be left out of a decision. It just means that have being able to have that wider discussion about those other areas, whether that be and contact center is the, is the most obvious one that is sort of supplementary to to telephony or connectivity. It doesn't mean you're going to be left out of the decision, but being able to demonstrate some knowledge to that customer gets you into that decision-making process with whoever those other business buyers might be. And, and Steve, I think you, you raised a really interesting point, which is a challenge for businesses. If you've come from a traditional telco or network background, maybe you don't have quite the extensive expertise internally about contact center, for example. That's when you have to be able to leverage a partner who does have that to assist you in those deployments. So I think from a, from a, from a reseller, from an agency master agent perspective, you need to select the right partners who are going to equip you not just with the right technology solutions to cover as much of, you know, a customer's, um, technology requirements as possible, but are also going to be able to support you in terms of knowledge and assistance in deploying those and selling and deploying those solutions to end customers. You're absolutely right. I think the fact that your partners are already in there as a trusted advisor to these end businesses is, first of all, an advantageous position. You just need to be able to take advantage of it with with expertise in those other areas.
So your research has highlighted the growing demand for convergence between UC and contact center and customer experience overall. What do you think is behind it? What are buyers hoping to achieve with the shift?
Yeah, it's really interesting and, and our research shows that there, uh, the, the, there is increased demand. Uh, so this is, uh, we asked a question to, uh, this is again, survey of a couple of thousand businesses. Would you prefer to buy your unified communications and your contact center from the same vendor? Uh, and as you can see, the, the bars on the left in, in the dark mode are, are indicate yes, we would like to buy UC and CC from one vendor. And as you can see, that demand increases in accordance with, with, with business size. But even in small businesses, there's a significant proportion of businesses, more than a third of businesses would like to buy their UC and CC or CX informal from the same provider. So to your question, why is that, Steve? There is a real correlation between, um, agent experience, customer experience, and business performance. This has been proved in multiple studies that the, the performance and happiness of agents relates directly to the effectiveness and performance of, uh, the provision of customer experience, whether you measure that by CSAT or through NPS, and then through overall to business performance, ultimately profitability and sustainability.
So what we're seeing here is, if you can connect your entire business, not just have comms, have customer experience siloed in the contact center. If you can allow everyone in your business by integrating into a collaboration system, for example, you mentioned the, the, your support of WebEx. If you can integrate your external contact center system with the rest of the users who are using WebEx collaboration or calling capabilities, suddenly everyone in the business is a part stakeholder in customer experience. If I need to speak to, if I'm an agent in the contact center, but I need to speak to a subject matter expert in accounts or logistics, I can immediately reach them connected through my collaboration system. It's not the previous, oh, Mr. Customer, I'll have to come back to you in one week once I've spoken to logistics or once I've spoken to finance. The, the, the premise of combined UC and CX or contact center allows that much more seamless provision of, of customer experience and ultimately better customer experience leads to better business performance, better profitability, better revenue expectations, and ultimately, uh, better business sustainability. So there's, there's a causal link there, uh, between those different systems. And as I said, the primary one is linking UC and CC.
So, you know, your, your survey also pointed out which channel customers prefer. Uh, what are the standout trends that you're seeing in terms of where and how people want to communicate with businesses today?
Uh, well, I think the key, key trend, Steve, is that it is becoming broader and broader. You mentioned omni channel previously in, in terms of the contact center, and what we're seeing is a much broader range of communication challenges. So again, this comes from the same survey. We asked all of those businesses, how do customers communicate with you? And as you can see, the most popular mediums are still what you would consider those, those traditional mediums, email and the telephone. But actually, the, the popularity of other mediums is becoming increasingly important. And I know you talked about messaging earlier on this week, and we are really seeing a rise in, in messaging requirements, both social media messaging, so that might be, uh, Facebook Messenger, um, uh, also consumer messaging platforms, so WhatsApp or WhatsApp for Business, especially in Europe, is increasingly in popular. But SMS and MMS, we know in the US, that is a really incredibly popular medium for, for communicating with, with customers. And then we have all these emerging mediums. So historically, we've had a lot of what I would consider relatively poor chatbots that were built five years ago with dialogue flow that sit on someone's website. Now, with AI-enhanced chatbots, uh, and generative AI using large language models, you can have really effective customer experience, uh, customer service chatbots that take a lot of weight off the contact center in terms of those mundane routine inquiries.
So, so what I would say is that the key trend here is, Steve, we are seeing much more ubiquity in terms of the communication channels are used. If I showed you this graph from five years ago, email and phone were five times as popular, for example, as, uh, SMS messaging, for example. Now, actually, we're seeing SMS is becoming increasingly important. Social media messaging becoming increasingly important. Even video, which a lot of people don't think about apart from sort of very niche use cases around customer service, um, is becoming increasingly important. So, so what we're seeing is a much broader spread of customer communication channels. And, and the one thing I will say there to, to any business out there and to any, um, partner who's providing CX solutions, ultimately your customers will want to be communicating via these different mediums. So if you don't offer SMS as a reminder system, for example, another competitor may well be doing that. So I think it's really, you mentioned the word omni channel. I think it's really important for the modern business to be thinking, actually, can I offer my customer services the route that they want to communicate in? Am I just offering email or phone or, or a web form? Should I be offering SMS? Should I be offering social media? Should I be offering live chat with an agent or live chat with a, with a, with an AI-enhanced chatbot? I think what we're seeing is a much more leveling out and a much broader range of demand from customers in terms of the type of channel that they want to communicate through.
You know, and it's interesting, none of this necessarily requires a contact center agent. You know, a lot of this can actually be knowledge workers that need access to this broader toolkit of communications channels as well. And a lot of times that gets lost in the shuffle. You know, we give you a phone number, a phone system seat, we give you an email address, but a lot of the other things that you guys have on this research ends up falling into personal devices. You know, to, to paraphrase Jurassic Park, technology finds a way. You know, this is where a lot of these kind of consumer things enter the enterprise is because, not that, you know, employees want to go outside of, you know, prescribed tools, but because technology finds a way, there's a need. And if it's not being filled by, you know, the IT staff or by, by the organization's investment from an investment perspective in the tech, this stuff finds a way in. So the ability to support across the entire surface area where your employees, not just contact center, but where your employees are engaging with each other, with third parties, using these types of standardized communications tools is really key.
Another thing that I saw in that research is two things. One, yeah, if you lay out all of the channels, you can see voice is still kind of second place. But if you add all of the digital convergence, all the digital communications needs, through the roof. And voice is there. And this kind of, I think further plays to one of my theses that digital is there for the self-service stuff, for the stuff that's transactional, for the stuff that's that's kind of quote unquote easy. Voice is there for, I've got a problem that's really complicated or complex and I need to talk to someone, whether that's an agent or a knowledge worker, whatever. I need to talk to someone to make sure it gets done right and gets done right now. And then the, the third thing I see happening in my own personal life with others and in the market is that we tend to use digital channels as a way to shortcut around the wait times in queue. You know, I know it's going to take forever, so I'm going to take to social media and I'm going to, you know, post something on social and try and get the brand to interact with me that way.
So, the research I think is really interesting, but again, it shows voice is not enough anymore. You know, you really need to create a bigger surface area where all of your employees can communicate with each other, with the, you know, third parties they work with, suppliers, vendors, customers, supporters, everything, um, using supported tools because this is the other thing that research you guys did in the beginning around compliance and, and security vulnerabilities. Well, guess what? If you're not supporting this stuff and tech finds a way, you've now created a chasm where you've got a security, uh, potential vulnerability.
So, you know, with this, this idea that voice isn't enough anymore, you know, you guys have noted that buyers are bundling. They're, they're looking for bundles, devices, analytics, managed services. What is it about the bundles? You know, we just announced our own bundles today. Uh, what is it about bundles that are so compelling in the market and create an opportunity for customers to hit on some of the important points that your research found and for partners to capitalize on?
Yeah. First of all, I couldn't agree more with, with, with your thesis about the, you know, the potential for shadow IT to creep in if you, if you don't offer all of the, all of those mediums. Well, I think that the, the bundling goes back to that, that, uh, research that, that we talked about on the first slide that still, that top customer demand is, is cost reduction or, or, or cost efficiency, return on investment. And ultimately, bundling for customers offers them that cost efficiency. You know, they get better bang for their buck, whether it's, as you said, usage analytics or quality of service analytics, whether it's devices as a service or, or managed service options. Those bundles offer end customers what they perceive and, and generally better value for money, better return on their investment.
From a partner perspective, as I said previously, the more of those different services you can offer within a bundle, the more valuable you are to that end customer and the, the better customer, uh, retention you're likely to receive and you can minimize that, that customer attrition, uh, through those different bundles. So we, we've seen bundling traditionally, it's been within telecoms, it's been connectivity and telecoms that have been bundled together, but to your point, Steve, I think it's, it's gone much further than that recently. As I said, we're looking across devices, we're looking across, um, analytics, whether that's usage or quality of service, um, but, but additionally, I think even more, um, professional and managed services. You know, a lot of these businesses need help deploying, provisioning, and managing these services. And I think it's, it's, it's really on the onus of a lot of your partners to, to offer them packages that can help them do that. So I think it's twofold the reasons we're seeing the bundling. Primarily from the enterprise perspective, it's meeting the, their demand for, for services they need. They're getting better value for money. And then from your partner side, they're getting better, you know, telecom's management, telecom's administration from, from the provider side and also better achieving better customer retention as well, potentially.
Yeah, I mean, I think it, it plays back to what we talked about in the beginning. What's driving a lot of the results that you saw in that research? My thesis is customers are moving away from the best-of-breed architecture because that's kind of a relic of prem and moving more towards a best-of-suite, you know, which necessitates a bundle. You know, I'm looking for a, a single solution provider that's going to provide me with an equitable, you know, feature set across the entire environment. So if you're trying to still hammer that square peg into the round hole of like, no, no, no, you need best-of-breed, I think that the bar has been raised tremendously that you've got to be, you've got to get your chin, not just your chin up over the pull-up bar. You've got to have your head and shoulders above that pull-up bar. If your solution is going to be kind of a fragmented standalone solution, it's got to do some really amazing things that nobody else in the market is doing. And a lot of times in this space, one of the complaints is that it's, it's becoming a sea of sameness. Everybody does a lot of the same things. And, um, you know, the, the bundle, I think is, is the, the effect of that desire on the customer side to start looking at best-of-suite instead of best-of-breed.
I can completely agree. When we look, we do feature function comparison in our role as analysts all the time. And as you said, Steve, both if we look at UC and CC, the, don't get me wrong, there are solutions that do different things to each other, but as you said, the, the bar has been leveled out so much that actually your ability to differentiate in terms of product feature and functionality. And I sort of challenge anyone out there to go and look at the, the market's leading UC platforms or look at Teams, WebEx, and Zoom. The capabilities are very similar. There are some nuance cases where one does something better than the other, but you're right. I think that the value of that combined suite is potentially the, the real asset. I think as you said, it's increasingly difficult to differentiate on a standalone product.
Yeah, exactly. So, you know, you've said the partner has evolved. And, and the, the best partners of today and the ones that are going to survive tomorrow are going to be the ones that think more like a consultant, um, instead of just kind of like a, a distributor, a dealer, or, you know, a, a value-added reseller. Um, what capabilities do you think partners need to succeed in this new buyer environment?
Yeah, that's a really good point. I think we have to, partners need to move away from that sort of commoditized, commoditization approach because as you said, those, those commodities, if we look at telephony provision, for example, you know, termination of, and the graph on the left here, that this comes from our recent service provider research. And we asked service providers, you know, which area generates the most revenue for you now, and which do you think it will be in the future? And so if you look at something like telephony enablement, so termination minutes, numbering, bring at the moment, 40% of providers think that that generates the most revenue for them. Now, if we look into the future, that drops significantly to around 20%. And we know that because we, minutes and termination and numbering prices are falling. They have been falling for years. It's more and more difficult to generate the same revenue and margin on those particular product sets. Whereas when we look at value-added services, some of the things that, that we talked about before, Steve, in terms of, um, you know, analytics or AI enhancement, for example, as you can see, the amount of providers, only around 16% of providers think that that's their biggest revenue driver right now in 2024. When you say in the future, a really considerable proportion, nearly 45%, 45% of those providers think that actually value-added services are going to be their biggest revenue driver. And that could be across professional and managed services.
And when we come back to, to talk about that, that concept of the intelligent workplace, being able to truly not just be the trusted advisor for telecoms, but actually the trusted advisor in a number of different areas is really important for providers. And I think that's the, that's the key piece that providers need to be able to do. They need to be able to offer expertise in order for their end customers to achieve a concept like the intelligent workplace. And they do that both with their own trusted advisor status, with their own knowledge. But additionally, Steve, it goes back to that point I was talking about previously. I don't expect every reseller in the United States or in the United Kingdom or in France or wherever that might be to be an expert in UCaaS, CRM, productivity tools, and CCaaS. If you're a small business, that is almost impossible. What you need to be able to do is to leverage the, the skills of a partner who can assist you in those areas. So, I think it's a combination of using your own knowledge as a provider, using your own knowledge of your own customers, what do they need, what are they looking for, but also leveraging a really strong partner ecosystem, uh, to ensure that you can meet the requirements of those customers in the future.
So in that vein, if you were advising a partner today on where to place their next strategic bet, what would you recommend? A vertical focus, a service expansion, or a technology alignment?
Uh, when, when you put it like that, I would have to say, I would have to say technology alignment. But I think all three of those areas are potentially important. So our recent research showed that nearly 10% of service providers actually see vertical focus as their key differentiator. And Steve, that's, that's above anything else, that's above price or above feature and function. They actually see their expertise in a particular vertical, which might be hospitality, for example, as their number one differentiator. So vertical focus can be key. Service expansion, I think, can be important as we've talked about across those, those other areas. But the reason I highlight technology alignment, I think, uh, the majority of the partners that, that we've spoken to and we've heard from this week during, during Fleet Week, I think their real asset is their knowledge of their own customer base. That's something that I don't have as an analyst. That's something that their competitors don't have. You don't have that in-depth detailed knowledge of your customers. So my, my key piece of advice there, in a, in a line with technology alignment, would be to understand your customer base. Where have you won traditionally? What are your key targets? And to make sure that the technologies that your customers need, that you can offer at the level that they want. So if you see your customers moving towards collaboration solutions, make sure that you have a suitable collaboration solution. If you're seeing increased demand for informal contact center solutions, that might be call recording with AI enhancement, for example, do you have that in your portfolio? I think ultimately, vertical focus, important, service expansion, also important, but really making sure that your, the technology that you have in your portfolio is aligned to your customer demands. I think that's the, the most critical thing that's going to be the difference between successful service providers and those that are potentially left behind in the future.
Yeah. I mean, I think the answer is yes. I think all three of these things are crucial. You know, moving forward, you know, to your point, vertical focus really ties into being able to talk about the outcomes. You know, it's not just talking about something like messaging and video and phone. But when you're in a, a higher education, you know, environment, being able to talk about the impact it makes on, uh, student services enhancements or facilitating, uh, convergence, a secure communications between faculty and research, um, you know, service expansion, obviously, you need to start leaning into a more comprehensive toolkit. You can't go to market with that best-of-breed approach. And I think your, your key point on technology alignment, your value-add as a partner isn't that you, your guys rack and stack anymore, and that, you know, you, you bring, you're a value-added reseller of this particular product. You're, you're a solution. You talked about it earlier. You're a consultant. You're driving business outcomes and finding partners. And I like the way you frame that because in the past, suppliers used to kind of just be this transactional, I make a product, I give you some margin, and that's my role. And really looking at vendors like Cypio, where we really want to be a true partner to our partners, you know, not just giving you a product and margin, but giving you the services to help you kind of succeed into this space. I think is really an interesting insight. I think it's the, the partners of tomorrow are really going to embrace all of that kind of the three legs of that stool to truly become that trusted advisor and consultant to the customer.
Um, last question. If you and I, God willing, are sitting here at Fleet Week again, uh, what do you think the biggest shift we'll be talking about in how customers buy and use communications tools?
Well, I, I think it goes back to our, our concept of the intelligent. And as I said, this is, this is a hypothetical concept. I don't think a lot of businesses are there yet, but I think it's where the market's going in terms of a, a much more, uh, holistic, seamless approach to technology provision, moving away from siloed purchases. As you said, in certain cases, some businesses will have requirements for best-in-breed, but as you said, Steve, the, the gap between those solutions in different areas, I, I personally think is shrinking. And I look at feature comparison, feature function comparisons on a, on a daily basis. So I think, I think the biggest shift we'll be talking about is even less siloed purchasing, even more looking for partners who can, as you said, offer that, um, consultative trusted advisor role across as much of the technology estate as possible. So that move away from siloed purchasing decision towards businesses, towards providers that can really help in all of those different areas. And not only can help, as you said, see transact. I might be able to sell a UCaaS system. I might be able to sell a CCaaS system, but how do I effectively make that work together? How does that ultimately achieve my business goals to, to use your phrase, in terms of business outcomes? How does that, how does that help achieve that? And I think that's the, that's what's going to be the difference for, for partners of tomorrow. And I think that's what's going to make the difference when enterprises are shifting away from these siloed purchasing decisions. We already talked about the amount of personas within a business that are making any purchasing decision being a much broader range. That's what we're going to see more of. These business purchasing decisions are, are not going to be siloed by one person or one department. They're going to be business-wide decisions. How is buying a new UCaaS system going to integrate with our other systems? What business benefits does that bring us? And ultimately, they're going to be looking for partners that, that can help them deliver that. So, I think it's this move away from individual to a much more holistic, uh, decision when it comes to technology strategy and provision.
Awesome. Thank you, Patrick, for joining us, uh, at Fleet Week. I think this is a great kind of a capstone or bookend to an incredible week of, uh, information that we've shared. Uh, so again, I want to thank Patrick Watson, uh, from Cavell, for sharing their research into the intelligent workplace and what, uh, customers are looking for, what partners need to be thinking about in order to better serve, um, their constituencies and to frankly make work less work, uh, but also make it in a, in a very secure and supportable way. Uh, I'd also like to thank our friends from Zoom and Microsoft and Cisco for joining us throughout the week. Like to thank Peter Rosinski for sharing some of his great insights during yesterday's partner session. But most of all, I want to thank you for attending Fleet Week. Uh, as our proverbial ships head out to sea, uh, until the next Fleet Week session. Really want to thank you from the bottom of our heart for learning more about how we're modernizing communications, leveraging a fast to get going and easy to manage and a reliable forever solution from Cypio. Uh, so again, this is Steve Forham from Cypio. Want to say thank you, uh, for attending this session. Thank you for attending Fleet Week, and, uh, we'll see you soon.