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Whether they realise it or not, voice providers are currently in the middle of a battle for relevance with industry outsiders. And where this isn’t the first time that hyper-scalers and tech giants have attempted to wrestle rightfully earned revenue away from comms players, the win/loss column could be impacted far more than ever before in this latest bout.
With the introduction of AI, the stakes are high as market shares continue to change hands and providers once again face becoming commoditised as others reap the benefits of added functionality and applicability on top of infrastructure that they own. With this being said, a lot of what is currently being rolled out with voice as an afterthought is simply not fit for purpose for a lot of business cases.
All of this is incredibly important for service providers to consider as they take their next steps. As even though customer demand has shifted and the market itself has become increasingly more complex the key to success is fundamentally simple if executed correctly. All it takes is a change of approach in terms of how you look at the services you offer and how you implement new tech going forward.
How the introduction of AI is affecting Service Providers
User numbers are going up, but the underlying value of each seat is going down. The global UCaaS market grew almost 7% last year with the European market alone expected to reach nearly 80 million users in the next few years. The average amount of revenue that each seat brings in however is already declining between 5-6% per year in more mature markets. You’re adding more people to your platform but it’s getting less and less worth your time to do so.
To make things worse, this isn’t an ARPU squeeze that can be solved by simply plugging the hole with bolted on AI functionality. Let’s look at this plainly. On the face of it, does AI give providers the opportunity to 10x in a relatively short period of time? Yes. Are the ones who are getting out into the market first a lot more likely to capture revenue in the short term? The fact that SMBs make 80% of purchases from existing vendors points to yes again. Your customers are going to get digital voice agents. They’re going to get AI assistants and they’re going to fold artificial intelligence into their day-to-day but after the dust settles it’s going to be the provider who’s done it all in the right way that wins.
Do you have to move quickly? Yes. Should you forsake the legacy that you’ve built in traditional communications? Absolutely not.
Front 1 – Protect your base at all costs.
Front 2 – Efficiently bring your overall offering in line with the outcomes your customers expect at scale.
How Service Providers win with mobile-centric, AI-first orchestrated communications
To be successful in the next wave of communications, providers have to fight a war on two fronts:
Front 1 – Protect your base at all costs.
Front 2 – Efficiently bring your overall offering in line with the outcomes your customers expect at scale.
To do this successfully, you’re going to have to put the one thing that is currently becoming a part of the furniture at the centre of your whole proposition – your stable, trusted legacy voice foundation.
It’s true, your core services aren’t going to be paying the bills for much longer. But what they are going to be doing is building the operating system and enabling you and your customers to move forward together. The functionality and value adding services that you weave around, not on top of, your stack are going to be your revenue capturers.
On top of this, the markets that existed previously haven’t simply vanished, they’ve just evolved. People still live in those Microsoft Teams, Broadsoft and wider UCaaS bases and where you come in is delivering always-on communications that give those customers what they want – AI-powered comms that work everywhere and are connected to everything.
But they can still get that from anywhere, right? You need to start by leveraging the trust that you’ve built and modernising the architecture you maintain, because complication and fragmentation are now two of the main barriers to your future success. You shouldn’t be offering features in isolation. You need to start at the base and work upwards, interlocking every aspect as you go into an orchestrated singular effort.
Even the most traditional voice provider can become an AI-centric comms leader. To do this they must turn their crown jewel into the call control engine which drives compounded growth as it climbs the value ladder into intelligent and AI-orchestrated voice. Best of all, it’s easy when you have the right partner.
Guest Post Disclaimer
This article is a guest contribution from Dstny and reflects the views, opinions, and perspectives of the author(s).
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