Thought Leaders in Cloud Computing: David Guthrie, CTO of PGi (Part 3)

SM: I understand the motivation. I’m asking more for a state of the union in that market. Since you’re an insider in that marketplace, it sounds like one of your strategies is to sell through these telecom providers.

DG: Yes. It’s not our only strategy, but we believe it’s a great opportunity for the reasons I stated. We have a direct salesforce as well. We have SMB online sales. We go to market through lots of channels.

SM: I got that, but what is the state of the union on the telecom provider side? Is this a major trend? Are all telecom providers offering virtual conferencing services?

DG: Yes.

Sean: We believe that is going to be a major trend. It’s a major focus for us. We currently have a full pipeline of other tier one carriers globally that are exploring both iMeet and GlobalMeet for the reasons that David mentioned. These carriers are universally looking for ways to drive incremental opportunities for their businesses, especially in regard to getting into more business applications on top of the network services that they’re already selling.

SM: Which of your competitors competes with you in that particular market?

DG: Webex resells through carriers. So does Microsoft with its Lync option. So do many of the other cloud-based Web conferencing services. We just believe we have a better solution, a better reseller solution than they have. We believe we have a better user experience, and we know we have the best audio network underneath that globally that can be leveraged.

SM: How does this worth, when you strip down to the technology and architecture level, who’s providing what? Is it all happening on a brand level, or is there actual technical integration as in when you do a deal with, say, Deutche Telekom or Qwest, some of the technology is theirs, some of the technology is yours. How does that get architected?

DG: The line of demarcation is leveraging their networks in certain regions. So, Deutche Telekom, we would leverage Deutche Telekom’s network in Germany. With CenturyLink Qwest, we leverage Qwest’s network in the U.S. But for all the other network pieces, we leverage other third parties and aggregate them into one solution. We provide an end-to-end service other than the network and sometimes co-owe. Sometimes they prefer that we deploy some equipment in their co-owe, and we may do that but the application layer, Web services layer, the media mixing layer are all provided by and managed by us. So, it’s a full managed service that we provide for them and on their behalf.

SM: The Web conferencing or virtual conferencing space came from the software-as-a-service side. In 1999, Webex pioneered the category, and then lots of other providers came into the market. Now, increasingly, and rightly, it is moving toward a telecom service game. It is really a telecom service. The margins of telecom services businesses are dreadful. Can you comment on that and help me think through how this is playing out in the market?

DG: We think that Web conferencing, cloud-based Web conferencing margins continue to be strong, and they will be strong viewed as software-as-a-service. We think tying into the telephony piece is important to a successful solution, and we’ve done that effectively. We think it’s about innovation, about continuing to re-invent and enhance those technologies, moving them to mobility, to all the different devices that users access. We think that’s where value comes from. You add to and differentiate your product by extending it. And that’s what we’re doing. If you sit still, there’s no doubt you get devalued over time. But if you continue to make enhancements and innovations on top and tie in new technology, like cloud storage, into your products, mobility – as I mentioned earlier – soft phone technologies, wide band soft phone technologies, then you start to add more value to what you’re delivering to the customers. You’ve given them innovative ways to use your product and innovative ways to save money as well.

This segment is part 3 in the series : Thought Leaders in Cloud Computing: David Guthrie, CTO of PGi
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