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8X8 Inc. Does Virtual PBX Right

Posted by Randy Kremlacek on Aug 3, 2012 9:45:00 AM

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Who is 8x8?

8x8 Hosted PBX Done Right

8X8 is a virtual voice, video, mobile and unified communications company. And in my opinion, they're one the best out there.

Introducing voice over Internet "way back" in 2002, 8x8 is truly a pioneer in the Virtual PBX/VoiP service industry. They have steadily grown over the past 10 years to become the largest player in the Virtual PBX space.

A Mature Company in an Immature Industry

The VOIP Virtual PBX industry is still immature. While the technology has been available for many years, the business model for the pay-as-you-go phone service business is still being sorted out. Many Virtual PBX providers have popped up overnight and then disappeared just as rapidly.

The fact that the company has maintained focus and executed well in this ever-changing enironment is a testament to 8X8’s management. 

And they even make money! A challenging goal for any business.

A Leader in a Fragmented Industry

8x8 enjoys a 7.9% leading market share in terms of installed phones. Clearly, when the leader owns less than 8% of a market, the industry is fragmented. This will bode well for 8X8 as the industry inevitably consolidates over time.

Low Switching Costs of Virtual PBX Benefits 8X8

In the past, a company would buy an on-premise PBX and was locked into that manufacturer for the 7-12 year lifespan of the equipment.

But with Virtual PBX, it's very easy for customers to change providers while still retaining their original telephone investment. 

This plays to 8X8’s position as a market leader. When their less capable competitors lose customers due to bad service, 8X8 is there to pick up the ball. The market leader is always the next logical choice with customers who've been burned. Fool me once... 

As Virtual PBX Grows...So Does 8X8

Over the last several years, I've observed the growing acceptance of Virtual PBX as a viable alternative to the premise-based communications systems. The "fear factor" has receded and the technology of VoiP Virtual PBX is now increasingly accepted.

All of this bodes very well for 8X8. They should continue to grow rapidly and handily raise revenues and profits. This is in stark contrast to many of the legacy PBX manufacturers, who’ve lost money for years as they've tried to re-create themselves in this new world of open architecture and communications as a service (CaaS).

2012 Frost & Sullivan Award Goes to 8X8

Frost & Sullivan, a respected business research and consulting firm, gave their annual Virtual IP and Unified Communications award to 8X8 this year.  

Two Challenges for 8X8 Going Forward

As a leading Bay Area Virtual pbx reseller, TeleDynamic works with a lot of national Virtual PBX providers. Although 8X8 is great to work with, we've identified two primary areas that they could improve on as they continue to grow and dominate the industry going forward.

Reliance of Installed Customer Data Circuits

8X8 relies on whatever data circuit the customer has installed. If the data circuit does not meet the criteria required for good Virtual PBX quality, the 8X8 customer will experience problems such as dropped or garbled phone calls. 8X8 has no control over the data circuits.

I’m surprised that 8X8 hasn't partnered with an Internet Service Provider so that they can provide a guaranteed service level. At TeleDynamic, we've done this several times on a regional level so there's no reason why 8X8 can't do this as well. 

No Local Service Presence

Without local "boots on the ground", 8X8 can't perform pre-sales site inspections, on-site installations, or on-premise support.

While they have very good technical resources, they sit in a remote office, relying on the customer as their local eyes, ears, and hands. This may be OK for some customers, but many just aren't comfortable doing their own installation and troubleshooting work. 

Local Virtual PBX vendors have the competitive advantage in these two critical areas, offering local, personalized sales and service and on-premise support as needed.

 Comparison: Teledynamic versus 8x8

 


 

About the Author

Randy Kremlacek

President | Head Chef

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Randy Kremlacek is president and Head Chef of TeleDynamic Communications, and is a Digium Select Partner and 2013 Pinnacle Award winner. TeleDynamic Communications provides turnkey premises-based PBX and hosted PBX, SIP Trunking and Unified Communications. Randy Kremlacek prides himself on knowing the telecommunications industry as well as he knows his way around his own kitchen. READ MORE

 

 

Randy Kremlacek

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