Damaka Announces UCC Platform Source Code Licensing
Damaka is offering its UCC solution and platform as a source license for Service Providers and UC/telecomm channels that are looking for a differentiated cloud solution that they can optimize in order to effectively compete in the cloud market. Offering UCC solution as a source license with all rights to related Intellectual Property (IPR) and the ability to optimize the platform for a specific SP/channel environment could be a game changer in the move to cloud.
There’s no denying that cloud is coming in the UC/UCC world, and there’s a huge scramble to understand how the cloud market will be structured. The traditional premise market has been based on vendors building complete systems that are highly featured and customizable and are the same version for all of their channel partners. Those systems have been installed by a range of channels from small to very large, independent to Service Provider based. In this model, there are a limited number of vendors and multiple orders of magnitude more channels. The channels sell the systems, but more importantly provide the installation, operation, and management of the system (while there is often some direct sales and support, it is a small fraction of the total market in UCC).
Today, true cloud-based UC/UCC solutions are emerging. However, the cloud is very disruptive to the traditional channel model. Much of what the channel did is now done by the cloud vendor. And, as I have written before, the big value in the cloud is scale, standardization, and repetition, leading to cost/price reductions (read Timothy Chou’s 7 Model of Cloud Computing). There are various options for the channel to deliver cloud services, but none are optimal
First, a channel partner can resell a cloud offer that is operated by a vendor. There are several examples of this in the market today. The challenge with this model is that the channel has minimal value, and unless the UCC service is being aggregated with other capabilities, there is high potential for the channel to be displaced. Also, where previously the value included significant service, that value is now part of the cloud offering. Therefore, the services are minimized, resulting in potentially lower differentiation, revenue, margin, and staff needs. In many ways, the channel partner for a cloud offer is more of an agent than a Value Added reseller or System integrator, often with equivalent compensation.
Another alternative is for the channel partner to choose a vendor’s platform and operate it as a cloud service for customers. The challenges here are obviously scale. For example, if a cloud competitor has 10 times as many subscribers as another cloud provider, they will get much greater economies of scale. Another challenge is differentiation. There may be minimal opportunity for differentiation from other channel organizations using the same platform, resulting in price being the primary competitive value. Finally, a company can choose to develop a completely new UC product on its own, which is clearly a challenge for most channel organizations due to their ability to scale and their skill set.
The Damaka option is for the SP or channel partner to purchase the complete Damaka Amadeo UCC solution or specific components as a perpetual source license. For a single acquisition cost, the SP/channel partner gets the source code with a license for unlimited use in their business. The SP/channel partner can take the Amadeo code and use it as the basis of their UC offer, but has the capability to augment and optimize the code and the offer for their market and competitive situation (refer to a previous article on this topic). The source code comes with a complete knowledge transfer, which makes it easy for the SP/channel team to get fully up to speed on how to use and modify the code. In addition to the initial start-up capabilities, Damaka can provide ongoing support, consulting and updates, tailored to the ongoing needs of the SP/channel partner. As the code base is inherently multi-tenant, it fits well into the cloud model, especially in the SMB to mid-market space where multi-tenant offers are prevalent.
The option to acquire a source code license to a fully functioning UCC/VoIP platform with a high level of collaboration and SIP services could dramatically alter the UC market. Acquiring the complete source code for a UCC platform changes the economic model from individual endpoint license costs to a totally new model where the cost of licensing is a onetime event and can be amortized over a long range strategy to maximize penetration and usage. The cost of licensing could be significantly less than typical licensing costs for current UC/UCC platforms. This may enable organizations with large customer bases to quickly acquire and integrate a UCC offer that can be differentiated and attractively priced, while simultaneously delivering good ongoing margins to the partner. As 50-60% of the revenue of most cloud vendors today is spent on customer acquisition, the ability for Service Providers, large channel organizations, and even Systems Integrators to acquire a UCC capability and focus their marketing to existing customers without high acquisition costs may be the missing piece of a successful offer.
The new Damaka offer enables SPs and channel organizations to acquire the platform and then tailor it to their market needs and integrate it into the rest of their infrastructure. It reduces or eliminates the dependence on a vendor for ongoing updates and features, as well as potentially reducing costs for future upgrades and extensions. As Service Providers and channel partners focus on how to differentiate for both competitive positioning and maximizing revenue, the ability to control the development and features may be the key to success. This can be a significant game changer.
The benefits for the acquiring company to get a onetime license to the software is obvious, and for Damaka, developing an ongoing revenue stream is also a critical component. From discussions with the company, they clearly see ongoing revenue opportunities in support, customizations and future releases. A company buying the license could always modify the code base substantially and never need Damaka’s support, which can also be the appeal of this option to companies. Clearly, for success, this model must have a total cost per users for the cloud vendor that is less than other options.
The option of offering a complete one time software license for a complete UCC solution is a new step, one that opens up a new path for organizations focused on delivering cloud UCC to consider.