We have previously talked about Microsoft’s move into voice, but does this translate into them making a bid for your voice customers? With Microsoft’s PSTN enabled userbase expected to double over the next few years you may be anxious about how the rise of Microsoft will affect your voice business.
What then are the potential ramifications of Microsoft Teams growth for traditional Voice Providers? Perhaps more importantly is it possible to transform the threat of losing customers to Teams into a value-add for your own offering?
How Teams Voice is affecting traditional Voice Providers
There are two key risks that traditional Voice Providers are facing with Microsoft Teams and the rise of integrated voice. Those risks are missing out on potential earnings and losing relevance in the market.
The risk of missed earnings
The Unified Communications (UC) market is expected to grow to $167.1 billion by 2025. This means that traditional Service Providers may quickly miss out on huge chunks of revenue as sentiment moves to the cloud.
Microsoft leads the way when it comes to Unified Communications as a Service (UCaaS), being the cloud platform of choice, for chat, file-sharing and collaboration. With this also comes the growing need to voice activate the UC solution.
- Teams is Microsoft’s fastest-growing application of all time. It sits at the top of the Gartner Magic Quadrant for Unified Communications as a Service.
- Teams is forecast to grow from providing PSTN telephony for 12M users in Q4 of 2021 to a predicted 25M users by the end of 2026 across North America and Europe.
Not only is Teams a growing market opportunity, but your competitors could also be gunning for your market share as some providers are already realizing the various ways in which they can utilize Teams to leverage their voice business.
The risk of losing relevance
Studies have shown that by 2024, around 74% of new UC licenses for business will be cloud-based. Businesses using on-premises solutions simply cannot ignore the flexibility and cost-effectiveness of UCaaS. It is because of this, that in terms of total revenue, the cloud is now expected to eclipse traditional on-premise UC by 2025. This is even though cloud communications took only a fraction of the market share in 2019.
Enterprises are moving to the cloud at an accelerated pace. Here is where we start to see the huge amount of opportunity available to Service Providers who enable cloud-based solutions.
Microsoft as a Voice Provider
Even though Microsoft’s move into voice is substantial, only one of the three methods for voice enabling Microsoft Teams essentially cuts out the Service Provider. That method is Microsoft’s Calling Plans. For the end customer, there are of course times when a Microsoft calling plan is the right move, but there are some pain points that may make it less attractive for some companies. For example:
- Microsoft’s phone system does not offer the sophistication and adaptability of a PBX needed by larger organizations
- Calling Plans are best for small enterprises, when scaled they are not as cost-effective as contracted lines and minutes through a Voice Provider
- You cannot keep your numbers when moving to a Microsoft Calling Plan
- Moving to a Microsoft Calling Plan can be extremely disruptive to day-to-day business
When would a business not be looking to use a Microsoft Calling Plan?
Typically, the reason for not using Microsoft is because you want it to do something that Microsoft can’t technically deliver. Their phone system, in comparison to a PBX, is somewhat rudimentary. If you are doing anything more complex with phone and voice services, such as call centres, then Microsoft probably can’t deliver the phone system you need.
You might have business processes built around phone services, for example. If you are in the business of talking to customers, you will have Service Level Agreements in place. You will need to monitor required user agent performance management, making sure people are logged in and answering calls within so many rings. You may have financial services obligations that need to be strictly adhered to. When you bring calling into the equation you suddenly get into a whole realm of interesting stuff that your voice platform needs to do.
There are often technical reasons. It is a big change. Does the organization want to use Teams across their entire business? Particularly if their business has a mix of users, swapping to Teams hardware devices for a warehouse or manufacturing environment for example is still not as good an experience as a traditional PBX. It is still not quite as good as pressing a button. And perhaps they don’t want some staff running on legacy PBX and a separate set on Teams. Often the traditional phone system is baked into many businesses. The transition to Microsoft is complex, expensive, disruptive and they may be in a 10-year lease on their existing phone system as well. There are all sorts of issues you can run into when you move wholesale over to Teams.
Additionally scaling with Microsoft on their Calling Plans can be expensive. And there are other considerations, such as the purchase of support packages. And what you don’t get with Microsoft is a phone expert on the end of the line. You get the same support operative who in the next call will be helping someone with an Excel query, they are Microsoft generalists. You do have to push to get through to someone who knows what is going on phone wise. Not great if you are an enterprise in the middle of a critical incident.
So, is Microsoft making a bid for your voice customers? In short, no. But your competitors who are realizing the upsides of Teams voice integration most certainly are. You can easily combat this however by developing your own Teams strategy using a DRaaS approach. With DRaaS you can gain customers on the back of the rise of Microsoft Teams. Not only this but you can get an easy value-add by bundling the Teams experience with your own offering, adding support and PBX functionality to Teams Voice. Soon businesses will even be able to activate the Teams dial pad whilst only needing to pay for a single Teams Phone license with Call2Teams Go.
Book a call with us today to find out how easy it is to add Microsoft to your offering.