In the ongoing pandemic environment, few sectors of this industry have been as much in direct focus as Unified Communications. It is to UCaaS technologies that so many have turned to for supporting remote workplaces, and NetSapiens is one of those companies that have been in the thick of it all. So with us today for a return visit is NetSapiens CEO Anand Buch, whom we last talked with in 2017. In March, NetSapiens agreed to be purchased by Crexendo, creating a larger and broader platform with which to meet challenges going forward.
TR: In our prior interview, NetSapiens was gearing up to take on the pieces of the market not well served by the big players. Are you still on that path? How has it gone?
AB: We have indeed been very laser-focused on that fragmented market. We are at about 200 service providers, and we are starting to see a very strong community built around the NetSapiens platform. Our fundamental, purpose-driven belief is that more fragmentation allows for the most innovation and the most understanding of the end-user. Clusters of service providers that can focus on certain regions or verticals or applications can make those particular use cases a lot more valuable for the end-user versus a commodity player. The investments that we've made and that the markets want us to make, and some of our recent announcements related to the merger that we are in the middle of, continue to be focused on helping that channel.
TR: How did the Crexendo deal come about? What was the rationale?
AB: I'm a big believer in Andy Grove's book “Only the Paranoid Survive.” Over the last three or four years, it has become apparent that we needed to continue to grow and scale up. We have to get more resources, and we have to find the right strategic partner to come and take us to that next level. And so we have been very distinctly looking for partners, whether investment partners or strategic partners, that saw what was happening in the marketplace and believed in our vision going forward. During that search, one of the parties that came about was Crexendo, which was first looking at us as a potential vendor. They are a unique group and were looking for a transformational play just like we are. Once we went down the path of seeing what they wanted to accomplish, our visions very much aligned. They're very partner focused, and they very much believe in our community and what our community is doing.
TR: How do the technologies and business models of NetSapiens and Crexendo fit together?
AB: From a 50,000-foot view, Crexendo actually looks very much like a service provider. They have about 60,000 seats in the marketplace and are channel focused through an agent program. They want to continue to move into more of a scalable channel-based solution and our technology allows them to do just that. Crexendo has a very strong understanding of the retail market and would like to bring that know-how and that DNA to the existing NetSapiens community. That will enable us to build better products to support our partners. From our perspective, if you look at our 1.7 million — soon to 1.8 million — seats, their 60,000 is a very small component. But because we're learning how to offer services to the end user in such a massive market, that provides us more intelligence to really hone in on what's needed by the end user so that we can share that across the broader base.
TR: Might the combined company be a consolidation platform for additional M&A in the UC space?
AB: That’s something I cannot completely answer, but because Crexendo is a public entity, it is obviously a big question that's always asked. Our goal in the near term on both sides is to really just continue to grow the business. But one of the goals for Crexendo themselves has been to look at accretive acquisitions, which is how this deal came about of course. When the deal closes (they are shooting for a May timeframe) I will be joining the board with responsibility for strategy. Then we can put our heads together about such things. But as of now, it's really business as usual: cranking along and doing what both organizations do well.
TR: So where are you putting your resources to work right now?
AB: We're definitely doing quite a bit more work internationally, building out a couple of data centers for our SNAPaccel product. Internally, we continue to improve our processes, our delivery mechanisms, our support, and so on and so forth, to improve scale and to basically improve the experience for our clients. It is blocking and tackling, just getting better at what we've been doing by improving the existing applications, investing in product quality and robustness, and really trying to address the growth in the existing service providers that we have. A good portion of our growth has come from our existing client base, so we're very focused on taking care of that client base, and that feeds on itself as new providers come on board.
TR: In what ways has the COVID-19 pandemic affected your business and the UC space as a whole?
AB: The last year has been an unfortunate mechanism of a tipping point, but it has been a tipping point nonetheless in opening people’s eyes to the ways that we can still do business without necessarily being in one location. We are very fortunate to be able to state that we had our biggest year ever in 2020. It was a combination of new providers realizing the need to act fast on having alternative solutions to on-premises, moving to the cloud and existing service providers for low hanging fruit like PBX functionality, and hard phones suddenly needing to distribute. All of our providers were not only getting requests from their existing small businesses and enterprise clients to support a distributed workforce, but also just reacting directly to help. Schools needed to go remote, and so we had numerous partners that had put in programs to get free services out there for schools.
TR: How much of that response do you think will outlast the current situation?
AB: I think it was a big wake-up call for people to realize the need to have a redundancy plan in place for any time when people must work remotely, whether en masse or in pockets, whether it is a pandemic or a regional weather issue or something like that. For instance, we have a remote office down in El Salvador that had to go remote after an earthquake. There is now this notion of heightened preparedness that has just trickled down to a need for more technology intrinsically built for remote work, which is of course something we've been talking about for many, many years.
TR: To what extent do you think companies will go back to the old office infrastructure when the pandemic wanes?
AB: Consider our situation at NetSapiens itself. As a software development shop, our headquarters are based out of California, and we've been actually working remotely and have folks all over the place. We haven't officially opened our offices up again and it's been like that for a year plus. When we have discussions about opening the office back up, what we notice is the benefits of the flexibility associated with remote work. We didn't see a drop in productivity. In fact, we saw a pickup in productivity, although that is probably in part because there wasn't anything else people could do, which is both a good thing and a bad thing because then people are not finding balance.
Do I think it's all going to snap back and go completely remote? I don't think so. There is some level of face-to-face connectivity that's always going to be needed, whether it's about collaboration, whether it's for morale, or whether it's just easier to have certain discussions. No matter how good video products get, there is a difference being physically located in the same place. So my take is that I think optionality is going to be probably something that people consider. Footprints are definitely going to get smaller. We may have gained clarity with respect to why an office is actually needed, by which I mean ‘What are the real reasons we want to get together?’
TR: In what ways have you seen or do you expect to see UC technology itself change in response?
AB: From a technology perspective, it has continued to drive this notion of integration of the choice of medium to interconnect. Different people have different use cases, whether it’s what they consider their workplace, what their standard mode of work is, or what kind of PC they have. Are they using mobiles more? Are they using web-based communication more? It would be interesting to see a study of whether people replicated remotely what they had at their workplace, and whether they replicated exactly what they needed. Did this phase create a time where there was in-home innovation? That remains to be seen. I, myself, have rarely used a hard phone over the last year, and most of my calls have actually been web-based. Before this, I had a hard conference phone on my desk and it was just kind of a natural force of habit to use that. But I'm finding that this is quite convenient for me. I think that it's really a matter of understanding the different use cases and making sure that platforms are continuingly looking to align with whatever device and whatever work environment that people want to use.
TR: How do you think the industry should approach things as the pandemic (hopefully) wanes?
AB: We are a third through 2021 already, and it seems like it's gone like a flash. I think everybody is waiting to see if we can turn the corner from this pandemic. I think the biggest thing to keep in mind is that, in anticipation of relief that comes from turning that corner, we need to make sure we step back and not forget the learnings that have come from that last year. The tendency is ‘out of sight, out of mind’, but from a technology perspective, I think all providers need to really be looking at how we can continue to build better specialized products in the market based on what we have learned. A lot of service providers over the last year were addressing small retail shops that had economic impacts, and some of those will be coming back. So let's understand what it is that they really need. What have we learned in terms of productivity and solutions that are required in those markets that didn't do well? Let's look at what some of our successful customers did in terms of pivoting and being able to work remotely, and let's make showcases out of that to help the wider community.
TR: Thank you for talking with Telecom Ramblings!
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