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Vidtel: Frost & Sullivan Entrepreneurial Company of the Year Award
1.
2011 South African
Data Centre Green Excellence Award in Technology Innovation Cybernest 2012 2012 North American Video Conferencing Hosted and Managed Services Entrepreneurial Company of the Year Award © 2011 Frost & Sullivan 1 “We Accelerate Growth”
2.
BEST PRACTICES RESEARCH Entrepreneurial
Company of the Year Video Conferencing Hosted and Managed Services Market North America, 2012 Frost & Sullivan’s Global Research Platform Frost & Sullivan is in its 50th year in business with a global research organization of 1,800 analysts and consultants who monitor more than 300 industries and 250,000 companies. The company’s research philosophy originates with the CEO’s 360-Degree Perspective™, which serves as the foundation of its TEAM Research™ methodology. This unique approach enables us to determine how best-in-class companies worldwide manage growth, innovation and leadership. Based on the findings of this Best Practices research, Frost & Sullivan is proud to present the 2012 North American Entrepreneurial Company of the Year Award in Video Conferencing Hosted and Managed Services Market to Vidtel. Significance of the Entrepreneurial Company of the Year Award Key Industry Challenges Addressed by Ent repreneurial Excellence The video conferencing market is currently going through an evolution, as enterprises open up to software‐based and cloud‐centric solutions, and begin to regard video as part of a broader Unified Communications (UC) context. A successful new market entrant that is not concerned about cannibalizing legacy hardware revenue can be in a prime position to disrupt the marketplace by offering a software, cloud- based service that can increase video conferencing adoption particularly among cost- conscious small and medium businesses. Such an entrant can successfully compete by offering economies of scale that are not realizable with traditional video conferencing systems that rely on legacy hardware. The new breed of disruptive cloud-based video conferencing providers can differentiate their offerings by providing features such as broad connectivity and interoperability across a wide range of platforms. This contrasts with most standard video teleconferencing services, which offer only generic connectivity for H.264 endpoints. Successful new market entrants can support both legacy standards in addition to any‐to‐any interoperability with newer platforms, such as Skype and Google. The support of many different vendor endpoints (from vendors such as Cisco/Tandberg, Polycom, LifeSize, ZTE, etc.) is one more element of potential success. Another challenge that needs to be addressed by the industry is to harness a greater level of federation among various service provider networks in order to create a “global video directory” but a lot of work still needs to be done in this area. It is very difficult to get service provider consensus, particularly in larger efforts, as each operator tries to push its own agenda; additionally, the expense to make this goal reachable is quite high. While the © 2012 Frost & Sullivan 1 “We Accelerate Growth”
3.
BEST PRACTICES RESEARCH Open
Visual Communications Consortium (OVCC) effort looks promising, it still remains a work in progress. Hence, in the absence of this global “video dialtone”, the “meet me” invite model (made popular by collaboration applications such as WebEx) will become more utilized in the video conferencing world. The end-user’s contact list serves as the video directory itself, eliminating the need to know the video addresses of other participants. The “meet me” model can reduce the need for IT resources and simplify the end-user experience, as the video calling address enables easy connection between video conferencing endpoints anywhere in the world. Finally, one additional criterion for success for a new entrant is the degree of friendliness offered to Value-Added Resellers (VARs) and other channel partners, as over 90 percent of all video conferencing infrastructure is sold via an indirect model. But the level of channel interest depends on the margin that can be realized on the service. By offering a lower, more disruptive price point, a new entrant might be able to get a higher interest from the channel as it can increase its margin. Impact of Entreprene urial Company of the Year Aw ard on Key Stakeholders The Entrepreneurial Company of the Year Award is a prestigious recognition of Vidtel’s accomplishments in the Video Conferencing Hosted and Managed Services Market. An unbiased, third-party recognition can provide a profound impact in enhancing the brand value and accelerating Vidtel’s growth. As captured in Chart 1 below, by researching, ranking, and recognizing those who deliver excellence and best practices in their respective endeavors, Frost & Sullivan hopes to inspire, influence, and impact three specific constituencies: • Investors Investors and shareholders always welcome unbiased and impartial third-party recognition. Similarly, prospective investors and shareholders are drawn to companies with a well-established reputation for excellence. Unbiased validation is the best and most credible way to showcase an organization worthy of investment. • Customers Third-party industry recognition has been proven to be the most effective way to assure customers that they are partnering with an organization that is leading in its field. • Employees This Award represents the creativity and dedication of Vidtel’s executive team and employees. Such public recognition can boost morale and inspire your team to continue its best-in-class pursuit of a strong competitive position for Vidtel. © 2012 Frost & Sullivan 2 “We Accelerate Growth”
4.
BEST PRACTICES RESEARCH
C ha r t 1 : B es t P ra c t i c es L ev e ra g e f o r Gr ow t h Ac c e l era t i on Key Benchmarking Criteria f or Entrepreneurial Company of the Year Aw ard For the Entrepreneurial Company of the Year Award, the following criteria were used to benchmark Vidtel’s performance against key competitors: • Growth Strategy Excellence • Growth Implementation Excellence • Degree of Innovation with Products and Technologies • Leadership in Customer Value • Speed of Response to Market Needs © 2012 Frost & Sullivan 3 “We Accelerate Growth”
5.
BEST PRACTICES RESEARCH Decision
Support Matrix and Measurement Criteria To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Matrix (DSM). The DSM is an analytical tool that compares companies’ performance relative to each other with an integration of quantitative and qualitative metrics. The DSM features criteria unique to each Award category and ranks importance by assigning weights to each criterion. The relative weighting reflects current market conditions and illustrates the associated importance of each criterion according to Frost & Sullivan. Fundamentally, each DSM is distinct for each market and Award category. The DSM allows our research and consulting teams to objectively analyze each company's performance on each criterion relative to its top competitors and assign performance ratings on that basis. The DSM follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are shown in Chart 2. C ha r t 2 : P erf o rm a n c e- Ba s e d Ra t i ng s f o r De c is i on S u pp o r t Ma tr i x This exercise encompasses all criteria, leading to a weighted average ranking of each company. Researchers can then easily identify the company with the highest ranking. As a final step, the research team confirms the veracity of the model by ensuring that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies. C ha r t 3 : Fr os t & S ul l iva n’s 10-S t e p P r oc es s f or I de n t if y in g Aw a rd R ec ip i en ts © 2012 Frost & Sullivan 4 “We Accelerate Growth”
6.
BEST PRACTICES RESEARCH Best
Practice Award Analysis for Vidtel The Decision Support Matrix, shown in Chart 4, illustrates the relative importance of each criterion for the Entrepreneurial Company of the Year Award and the ratings for each company under evaluation. To remain unbiased while also protecting the interests of the other organizations reviewed, we have chosen to refer to the other key players as Competitor 1 and Competitor 2. C ha r t 4 : D ec is io n S u p po r t M a t ri x f or En t r ep r en e ur ia l C o m pa ny o f t h e Y ea r A w a r d Measurement of 1–10 (1 = lowest; 10 = highest) Award Criteria Growth Strategy Excellence Products and Technologies Degree of Innovation with Growth Implementation Leadership in Customer Speed of Response to Weighted Rating Market Needs Excellence Value Relative Weight (%) 20% 20% 20% 20% 20% 100% Vidtel 8 8 7 9 8 8.0 Competitor 1 8 8 8 7 8 7.8 Competitor 2 7 8 7 8 7 7.4 Criterion 1: Growth Strategy Excellence As a newer entrant, Vidtel is disrupting the video conferencing market via a software, “Multipoint Control Unit (MCU)-less” offering that is more cost-effective and scalable than existing offerings in the marketplace. Vidtel is using a four-pronged approach: 1- focus on SMB segment which is ripe for a wider video conferencing adoption, 2- address the interoperability conundrum by being a cloud provider delivering any-to-any video conferencing service, 3- develop a channel-friendly model , 4- offer a disruptive pricing model that encourages a wider technology uptake. Criterion 2: Growth Implementation Excellence Since its inception in 2008, Vidtel has been keen on securing a solid indirect go-to-market model. This effort culminated with the creation of a channel partner program in November of 2011, which enabled Vidtel to establish strong relationships with video equipment vendors, Voice over Internet Protocol (VoIP) service providers, managed service providers, and video VARs to re-sell Vidtel service. Their partners include over 40 VAR channels such as IOCOM, Solutionz Conferencing, and CMIT Solutions, among others. The bottom-line © 2012 Frost & Sullivan 5 “We Accelerate Growth”
7.
BEST PRACTICES RESEARCH impact
to Vidtel has been very positive with wins such as Drexel University that came via these channels. Criterion 3: Degree of Innovation with Products and Technologies Vidtel’s cloud-based video conferencing service delivers B2B connectivity across any standard video conferencing device (such as Cisco/Tandberg, Polycom, LifeSize, and ZTE, among others) and newer platforms such as Skype and Google Talk. The company has a comprehensive product portfolio that encompasses on-demand multi-party rooms, video dialtone, a Public Switched Telephone Network (PSTN) voice add-on, and a gateway offering that adds Skype/Google Talk to an existing MCU. Vidtel has also been able to quickly establish a global network footprint, with redundant data centers in North America, Europe, Middle East, and Africa (EMEA), and Asia-Pacific, relying upon a mix of public and private clouds. Criterion 4: Leadership in Customer Value As customers transition towards software-based, cloud-centric solutions, a disruptive pricing model becomes an important success component. The Vidtel Meet Me service allows multiple parties to dial into an assigned video conferencing bridge on demand for a disruptive price of 15 cents/minute or a monthly fee of $149 for unlimited usage. The Vidtel Connect service enables one‐to‐one connectivity on demand for a monthly subscription fee similar to a mobile phone subscription ($29.95). For an additional $10 per month, the Vidtel Connect service becomes the Vidtel Connect Pro, which also adds audio/Private Branch Exchange (PBX) capabilities, local calling, and unlimited calls within North America. The bottom-line result: for zero CAPEX dollars, Vidtel provides an OPEX solution that is more competitive than the offerings of any other participant in the marketplace, be it an MCU vendor, a traditional bridging service provider, or a new cloud “MCU-less” provider. Vidtel can do this as the consummate “lean startup” that it is—with its business model, it does not need to offer a return to venture capital firms or invest heavily in advertising, focusing instead on delivering value to its end customers. Criterion 5: Speed of Response to Market Needs Vidtel also elected to tackle the marketplace from a different angle, namely one that addresses both the advent of the Bring-Your-Own-Device (BYOD) paradigm and the proliferation of video on mobile and other devices. In order to achieve this, in June 2012, the company introduced its Vidtel Gateway product. The Vidtel Gateway is geared towards enterprises that have an MCU that is still going through its depreciation cycle yet does not support external participants on desktop PCs, laptops, smartphones, or tablets. Because of their hardware investment, these customers are seeking a solution that can enhance the functionality of their existing Customer Premises Equipment (CPE) video equipment. The Vidtel Gateway addresses this need by adding Skype and Google Talk capabilities to their MCUs. Vidtel was able to quickly launch this new offering in response to requests made by © 2012 Frost & Sullivan 6 “We Accelerate Growth”
8.
BEST PRACTICES RESEARCH channels
such as Solutionz Conferencing, Inc. Vidtel has also demonstrated speedy response to market needs by providing WebRTC support, winning the Best Conferencing Award at the WebRTC Expo in November 2012. Conclusion The key elements of Vidtel’s value proposition are price-performance excellence, enterprise-grade service, and channel friendliness. These characteristics will enable easy connection between video conferencing endpoints anywhere in the world, while leveraging cloud technologies that are more economical and scalable than other existing solutions. By remaining committed to expanding its existing global network and optimizing its performance while delivering good service at attractive price points to the mid-market, Vidtel will capitalize on the “sweet spot” for video conferencing market adoption. Therefore we believe that the company is uniquely positioned to be one of the video conferencing services industry’s new “companies to watch” from an entrepreneurial standpoint. © 2012 Frost & Sullivan 7 “We Accelerate Growth”
9.
BEST PRACTICES RESEARCH The
CEO 360-Degree Perspective T M - Visionary Platform for Growth Strategies The CEO 360-Degree Perspective™ model provides a clear illustration of the complex business universe in which CEOs and their management teams live today. It represents the foundation of Frost & Sullivan's global research organization and provides the basis on which companies can gain a visionary and strategic understanding of the market. The CEO 360-Degree Perspective™ is also a “must-have” requirement for the identification and analysis of best-practice performance by industry leaders. The CEO 360-Degree Perspective™ model enables our clients to gain a comprehensive, action-oriented understanding of market evolution and its implications for their companies’ growth strategies. As illustrated in Chart 5 below, the following six-step process outlines how our researchers and consultants embed the CEO 360-Degree Perspective™ into their analyses and recommendations. C EO' s 36 0-D e gr e e P er s p ec t iv e ™ M o d el © 2012 Frost & Sullivan 8 “We Accelerate Growth”
10.
BEST PRACTICES RESEARCH Critical
Importance of TEAM Research Frost & Sullivan’s TEAM Research methodology represents the analytical rigor of our research process. It offers a 360-degree view of industry challenges, trends, and issues by integrating all seven of Frost & Sullivan's research methodologies. Our experience has shown over the years that companies too often make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Frost & Sullivan contends that successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. In that vein, the letters T, E, A and M reflect our core technical, economic, applied (financial and best practices) and market analyses. The integration of these research disciplines into the TEAM Research methodology provides an evaluation platform for benchmarking industry players and for creating high-potential growth strategies for our clients. C ha r t 6 : B e nc h ma r ki ng P e rf or ma nc e w i t h TE A M R es ea rc h About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com. © 2012 Frost & Sullivan 9 “We Accelerate Growth”
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