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.
VoIP and SIP Trunking over best efforts Internet can cause SMBs to jump off the VoIP bandwagon rather quickly. Most small phone systems today do not have any built-in QOS (Quality of Service) monitoring, and those that do are likely not doing anything more than the typical MOS (Mean Opinion Score) based on historical packets.
MOS results are great when we are trying to see what the results were after the problem was detected and can certainly help with understanding some trends, but it does not do much to help SMBs understand why the QOS they are receiving from their current provider is sub par.
The truth of the matter is, the quality of service the ITSP (Internet Telephony Service Provider) is delivering can be high but there are factors that degrade that quality between the SMB’s LAN and the ITSP’s switch(s).
What can be done about it? Depending on your budget and technical acumen, something can be done or nothing can be done.
Most ITSPs who provide SIP Trunks or Hosted VoIP for business will not provide much more than a service status. Either the service status is “Active” or “Inactive”. This is not because they are intentionally holding back, they simply do not have the tools to be able to deliver more information to their users without breaking the bank. VoIP network tools are expensive and are generally not all that easily extensible.
There are some QOS monitoring tools that are fairly cheap and easily accessible. Some are even free!
VoIP Spear (free and paid) is a great little service created by Henry Fernandes at Toepoke Software. VoIP Spear uses ICMP packets (ping packets) to monitor remote connections. We have been using the service for a couple of months now and have made good use of the historical MOS data that the service provides. The only downfall is that uses ICMP. Most routers these days have ICMP echo turned off by default, mostly due to security concerns and potential inaccuracies. That being said it’s a great tool for acquiring remote MOS data and Henry tells me they are working on an API.
But what about ongoing call testing? Some say the only real way to determine QOS is to run periodic call tests that can report on call quality, connectivity issues, bandwidth, latency, delay, jitter etc. Again, tools exist but are expensive and are generally made to run at the top level of the network for network engineers, not SMB owners. Some router/switch vendors like Adtran do have some devices that will deliver on some MOS scoring and alerting but they again are not cheap, generally they start at $1200 (US) for the basics, which puts it out of range for many Canadian SMBs.
This begs the question, “SMBs should not have to concern themselves with QOS, their service should just work, right?”
Yes, it should just work, much like the legacy telephone networks have for the last hundred years. Why should the business owner be forced to accept dropped calls, broken conversations, 1-way audio, and the like, just because it’s VoIP.
The truth is, they won’t switch if they think the lines might drop or the quality might be sub par. Which might explain why so few SMBs have made the jump to VoIP-based systems and service in North America.
What can be done to increase adoption of VoIP for SMBs in Canada? The first remedy is fairly straightforward, ISPs need to increase broadband to small businesses and provide some application prioritization without dramatically increasing price. Considering ISPs want to deliver their own digital voice/VoIP offers, this might be a ways off.
What about better tools, integrated into the PBXs?
One could integrate some of the QOS monitoring/testing bits directly into the phone systems that are sold and by using open standards, provide a secure interface so the Internet Telephony Service Providers would be able to show QOS to their users via their user portals and the like. This would obviously require the pbx vendor to integrate the client piece and the ITSP would presumably host the web components.
This will allow VoIP service providers to show QOS data and provide controls around that for their own customers. Call testing details could be provided in real-time without spending tens of thousands to extend their current toolset to their users in a manner they will understand. This proactive self-support approach would also reduce inbound support for the service provider and would presumably help sell more PBXs for the vendor.
My rant for the week.