It looks like 8x8 is conceding in it's efforts to use agents to capture the small business/SOHO market that it hasn't been working so they've taken up the mantra "if we can't beat them, join them." They've become a member of what I like to refer to as "the chase to the bottom" crowd with their latest "new" offer, 8x8 Express.
Granted, 8x8 is well positioned and can serve up what can be seen as a "disruptive pricing" offer with the low price and large feature set. And they can do this very effiiciently, because smartly, founder and now board chairman/CTO Bryan Martin had the foresight years ago to secure their own patents and use most of their own, internally built technology. As a result they are great at avoiding paying recurring licensing fees to companies like Cisco or others for a softswitch, session border controller, app servers and more. No licensing fees translate to lower operating cost, higher margins, so their ability to pass on savings to customers of all sizes is one part of the company's DNA.
From the way things are positioned, it sure looks like 8x8 has chosen to go to the low end, directly. That cuts out the agents who have built their business and been how the company has been able to grow. From an outside view this adds more confusion for the channel with this offer. But their efforts to go direct begs the question that if the low end of the market is going that way, and bypassing the channel which built 8x8, what's next?
In many ways this is a delayed, "me to" reaction to Google rolling out a paid Google Voice service. The move is also happening at time where many of the branded and white label VoIP and UCaaS category players are moving up in the number of seat customer segments they are chasing.
Some logic by 8x8 could be that this offer frees their resellers up, and given they are mostly agents, it allows them to pursue those larger, mid-market sized accounts. While on paper and in presentations that makes sense, late to the game VoIP converts who 8x8 Express seems to be built for, are in need hand holding, which agents and MSP's provide. If the customer doesn't need hand-holding there already are plenty of other offers on the street for the "free" and "low cost" services.
So lets analyze why, a company that has so coveted the enterprise and mid-market segments would do this:
- Visibility - 8x8 has become less visible in the SOHO market space due to their efforts to move upmarket. This offer helps them reestablish themselves.
- Stock Price-8x8 stock has been trading in the mid-twenties but over the past two years has been like a roller coaster. By getting some low paying, high margin customers and where almost all the price paid stays with them, they bolster the number of seats, and help us those additions to reduce churn which inspires analyst confidence.
- Integration-8x8 has successfully integrated a series of acquisition parts and their own IP together. They now have a fully integrated platform which allows them to offer a better service offering than the legacy telcos and cable companies for a much better price.
- Competition-RingCentral, Dialpad and Vonage are all chasing the high hundreds to high thousands seat market customers. This opens up the door for 8x8. How they market this will be the deciding factor.
Oh, and if the product feature set sounds familiar, that's because it is. Other companies like former client Phone.com have had similar service offerings, as has Grasshopper and a few others. The 8x8 offer also was like a deja vu to me, as Dialpad Free, which was launched in 2017 in the Bay area, and went national in early 2018, because of the many similarities. That too placed 8x8 Express into the "me to, me also" category.
I think the idea of 8x8 Express, like Dialpad had with Free has it's place, but 8x8 should have just branded it as Express (powered by 8x8) and separated it from the parent's offerings. The could still do all the upselling, but just as Coke and Pepsi release other products in the beverage category, not all are Pepsi this and Coke that. 8x8 could have done the same thing, and likely accomplished more.