It’s only a few months after Microsoft finally put its Response Point (RP) System in the spotlight with the release of SP2 and John Frederiksen’s keynote speech at ITEXPO East in February 2009, and the wings of the entrepreneurial RP team seem to have been cut. It is clear that the latest wave of Microsoft lay-offs has impacted the RP team and some cryptic statements on the official Response Point Team Blog indicate that Microsoft wishes “to take a good look at the next version of Response Point and ensure it addresses the needs of Small Businesses.”
I contacted John Frederiksen, General Manager for Response Point at Microsoft, and he responded to my concerns with the following somewhat re-assuring comments:
The company will continue to support Response Point version 1.0.
We will continue to support our current OEMs, Service Providers and resellers that are selling Response Point version 1.0. Customers will continue to be supported through their OEMs.
We will also continue to promote the product online and spotlight compatible 3rd party services and add-on products.
The team is evaluating the strategy for the next version of the product and will continue to investigate the opportunity in the small business market.
The Response Point team has not been moved to another division.
Two years ago, when RP was still in beta trials, I thought it offered some interesting features and capabilities and I believed Microsoft was going to leverage this innovative solution to aggressively pursue the SMB customer segment as another entry point (vis-à-vis OCS) into the telephony market in general (see my article here). I did wonder if there was going to be some conflict of interest between OCS and RP and the respective teams, but ruled out that possibility assuming Microsoft had sufficient resources to support both lines of business as they seem to serve fairly distinct market segments. Today, the economic recession seems to be forcing Microsoft, not unlike other IT and communication vendors, to make tough choices. I am still unsure if the decision was made on the basis of comparing the respective potentials of OCS and RP, but RP has definitely fallen prey to Microsoft’s efforts to cut down expenses where short-term revenue and profit prospects are less certain.
Response Point Value and Market Positioning
In a more recent article discussing the release of SP2, I stated my belief that Response Point is uniquely positioned because of it features including the speech recognition capability and the Magic Blue Button (voice-controlled auto attendant and dialing), but mostly because of its ease of installation, use and management. It is as close as it gets to an affordable, plug-and-play telephony solution for small businesses, and thus in a category of its own, since most other small-business systems are neither as simple to use nor as inexpensive. Generally, it is hard to find an IP telephony platform that can provide a cost-effective communication solution for a business of less than 20 users, or a larger business with geographically dispersed sites of that size. SP2 offered some valuable enhancements such as analog phone support, intercom, VPN and multi-subnet support, an after-hours receptionist setting and more robust audio. The anticipated release of version 2.0 is supposed to make it an even more robust business-class solution that competes head-to-head with platforms offered by traditional telephony vendors such as Alcatel-Lucent, Avaya, Cisco, Nortel and Siemens.
However, what I believed was going to be Microsoft’s (not so) secret weapon in the battle for the small-business space was its extensive channel of VARs, resellers, specialists, etc. The traditional vendors use channels that have mastered the skill of marketing, implementing and managing more complex solution for medium and large businesses. Very much like the vendors themselves, these channel partners have a vested interest in pursuing larger implementations that produce greater margins and help them scale and grow more rapidly. Response Point, on the other hand, is well positioned to enable multiple Microsoft specialists and consultants to add a new revenue stream to their business and offer a more complete portfolio of business solutions to their small business customers. Response Point customers have indicated that they appreciate the features and lower cost of the solution, but their trust in Microsoft’s continued support and extensive channels represents a major factor in their decision to select Response Point versus open-source or some other less mainstream solutions. Yet Microsoft is currently failing to re-assure its channel by sharing a clear vision for the future of the Response Point system.
I talked to several RP resellers about three months ago and I was really impressed by the positive feedback. They seemed to believe that the features, though not on par with those offered by traditional vendors, were sufficient for most of their clients. A phrase that frequently came up in partners’ comments was: “This time they got it right from the start. It just works.” Also, partners appreciated the continued interaction with Microsoft allowing them to contribute to the development and addition of new capabilities that would further enhance the value of the RP system for small businesses. They were eagerly awaiting release 2.0 as the more compelling solution that would indeed enable them to compete successfully in their target market. My conversations with resellers as well as the blog entries I have read on various web sites dedicated to Response Point and Microsoft’s eco-system of partners indicate a very strong confidence in Microsoft’s ability to deliver and its commitment to this product line.
The Channel Awaits Microsoft’s Official Statement
As the rumors spread about the fate of the RP team and Microsoft delays making an official statement on the future of this products, disappointment and doubt are beginning to creep in among the partner ranks. For some of these small outfits RP had just opened up opportunities that now seem to be closing without proper notice. Not only the income, but also the reputation of these specialists and consultants is on the line since they have promised their customers a certain roadmap of product viability and evolution.
Further, partners are now having second thoughts about the quality of the Response Point system. They see more clearly some of its disadvantages in light of Microsoft’s hesitation to continue investing in further product development. Most of them continue to believe that, given continued development, this product is right for them and for their customers. Yet others are quickly beginning to look for competitive products to add to their portfolio in order to be able to sustain their competitive position in the small business communication space.
Finally, partners are now questioning the nature of their relationship with Microsoft – is Microsoft really committed to supporting its partner network or are they after quick and guaranteed profits only?
Speculations Abound at Times of Uncertainty
I saw speculations about the possibility of Microsoft integrating RP with OCS. I don’t see why they would want to do that. Microsoft can use certain elements of RP for call control with OCS if needed, but OCS is not a suitable solution for small businesses. If a business needs inexpensive telephony and/or IM client, they have other options. The value of OCS and unified communications is in their ability to integrate multiple applications from IM to voice to UM to conferencing, but in order to deploy all these capabilities, a business will need several servers with a significant price tag.
Others are speculating that Microsoft is planning to focus most of its efforts in the communication space on cloud computing and communications as a service (CaaS). I believe that Software as a Service (SaaS) and CaaS have some potential for delivering business applications and communications to SMBs. Similar to existing hosted telephony services, it alleviates all implementation and management hassles for small businesses typically lacking in-house technical expertise. However, SOHOs and very small businesses are likely to continue to prefer the least expensive consumer solutions. On the other hand, small businesses at the upper end of the range – 20 to 100 users – may actually benefit from inexpensive premise-based solutions such as Response Point.
In my opinion, Microsoft should certainly pursue profitable opportunities as that would eventually be best for both itself and its partners. I do believe, however, that Response Point has a good market potential. As I mentioned earlier, it is competing against traditional vendor platforms, many of which are just too expensive and difficult to manage for small businesses of up to 50 users. Hosted IP telephony has failed to gain much traction throughout its nearly decade-long existence, although it is touted to be a most suitable alternative for this particular market segment. Open-source telephony, on the other hand, is becoming a more viable option, especially with Digium and others focusing on developing a channel, something that was considered one of their major weaknesses so far. Consumer vendors such as Google and Skype are also vying for a piece of the SOHO and small business market and are likely to eventually gain some penetration. However, Response Point has the advantage of having been developed as a business system from the start and the channel has already been trained.
Overall, I believe that Response Point is a viable solution for the small business market. As with any technology, however, its success is largely dependent on the vendor’s execution plan, and I’ll repeat myself – “It’s all about channels”. Given the right marketing efforts, it will sell, and given the right vendor and channel support – it will thrive; without those elements, it is not going to make it on its own. The small business market continues to be under-penetrated and to offer tremendous opportunities. While the competition seems to be intensifying in this market segment, the various solutions seem to offer some distinct advantages and disadvantages thus basically catering to slightly different sub-segments. As some of Microsoft’s partners seem to believe, more extensive marketing efforts may be needed (TV commercials, end-user webinars, etc.) with a strong marketing message that clearly identifies the benefits of Response Point in order for Microsoft and its partners to be able to keep Response Point sales afloat in this challenging economy.
I will admit, this is a bit of a silly comparison but the truth is that I have had a few customers (and some analysts) asking for some clarification on the new Google Voice offer and how it may compete with Response Point when coupled with an ITSP. The fact is they really do not compete in any measurable way and they could easily compliment each other.
The obvious major difference is that Response Point is a small business phone system, Google Voice is really a service offering targeted at individuals.
When we combine Response Point with an ITSP (Internet Telephony Service Provider) we start seeing some similarities in the services between the two offers but they are really meant for 2 distinctly different purposes.
Response Point offers an actual premise-based system with a base unit, handsets and features like; auto-receptionist, DID integration, hunt groups, voice mail to email integration etc. All of the things one would expect when purchasing a small business phone system.
Google Voice service is an overlay service on whatever you have today, so if your existing phone system is simply not cutting it, it’s unlikely that Google Voice is going to be able to transform it into the system of your dreams. It’s true that Google Voice will allow you to take advantage of certain features but don’t expect to find a Park, Hold or Transfer or anything fancy like speech recognition.
Google Voice is an inbound-centric service. Most features can only be used with an inbound call, that includes call recording and call joining.
How they play nice together
One could use the Google Voice – simulring feature to call your Response Point phone number and at the same time it could call your mobile.
Google Voice – call recording is a handy feature that is currently not a feature offered in the Response Point system.
Google Voice – voice mail transcriptions is a handy way to receive visual voice mails via email and SMS.
Google Voice – call widgets allow users to put callback widgets on a website. This will allow the visitor to put in their phone number and the system will call them and then it will call your Google Voice number.
Google Voice – SMS is a cool way to compose, accept and manage text messages while maintaining control over the devices associated with that service.
The Google Voice service is only available in the US. Even US subscribers can only forward/simring their Google Voice numbers to other US numbers but that is likely to change to include international countries in the near future.
In theory, the Google Voice call should go wherever the media is sent. Call Routing results may vary depending on the Response Point ITSP you choose.
When calling out, your existing phone number (Caller ID) will be presented to the callee unless you use the dial-out feature, which is (IMHO) a bit of a hassle. This causes some problems as most of us are used to calling people back on the number we last saw from them. Fortunately, many ITSPs (unlike the conventional phone companies) will allow you to change your Caller ID number to match your Google Voice number.
Google Voice does not address LNP (Local Number Portability) at all right now. Which means you can not bring your existing numbers to Google Voice, you have to choose a new number.
Join Erik Lagerway and Trent Johnsen, co-founder/executives of SMB Phone to see how Microsoft Response Point is changing small business communications and what it means for you and your customers.
SMB Phone is a national Response Point distributor and Canada’s newest Microsoft certified Internet Telephony Service Provider (ITSP) and the only provider to be integrated with Response Point in Canada. Along with a working demo/overview of Response Point, SMB Phone will provide an insider’s industry perspective on Microsoft Response Point and the latest software release, Service Pack 2, and how you can improve your customer’s business communications and enjoy significant new business opportunities working with Microsoft Response Point and SMB Phone.
3/12/2009 | 6:30 PM – 8:30 PM
3/12/2009 6:00 PM Pacific Time
The BC Liquor Distribution Branch (BC LDB)
3200 East Broadway (Okanagan room)
Vancouver, BC V5M 3T5