Cloud Nine
CLOUD TELEPHONY IS AT A TAKE- OFF POINT BUT A POOR REGULATORY ENVIRONMENT MAY YET DERAIL IT.
Cloud telephony is at a take-off point, but a poor regulatory environment may yet derail it
BigBasket is the most well funded online grocery startup in India, having raised a cumulative of $246.5 million from well-known investors like Ascent Capital, Bessemer Ventures and Abraaj Group. BigBasket operates in a hyper-competitive business where margins are razor thin but scale is expected to make up for it. It competes with the likes of Grofers, ZopNow and Amazon. To stay ahead of competition, BigBasket needs to ensure that its customer experience and communication is flawless.
Didn’t get that exact variety of daal (pulses) you ordered? BigBasket needs to hear about it and address the issue through its in-house contact centre operation. Customer feedback is too important an aspect of its business to be outsourced. The cloud telephony partner who has worked with BigBasket to scale up from a few hundred customers to serving millions is a little known company called Ozonetel.
In the past when companies had to scale their telecom systems they had to invest crores in buying EPABX hardware from the likes of a Cisco, Avayya or a Genesis. Telephone lines had to be configured and extensions provisioned.
Today, if you want to scale from 10 telephone lines to 10,000 lines it can be done in a matter of minutes through the magic of cloud telephony. What happened to IT infrastructure – where one had to earlier buy servers, racks and other hardware to grow – with the introduction of cloud computing, is happening to telecom infrastructure. Capacity can be added on tap. Which is why cloud telephony is also called hosted telephony. The hardware can be hosted anywhere but services could be provided wherever required.
K.B. Nagaraju, CEO and Director of Innovative Retail Concepts Pvt Ltd, the company which owns the BigBasket brand, says “BigBasket has a maniacal focus on customer experience with immense attention on customer response metrics. Ozonetel has made significant contributions in our efforts to set new
standards in customer service. Their cloud infrastructure has been robust and uptime has been very good.”
Ozonetel is not alone. A number of nimble start-up players like Knowlarity, Exotel, VoiceTree, MCube and VoiceXchange have sprung up in the last four-five years to address growing industry needs.
Reason for growth
Each time you dial for an Ola cab, you might not be aware that the cloud telephony platform powering its services has been put together by Exotel, another Bangalore headquartered player. Shivakumar Ganesan, the suave former Yahoo and Flipkart executive who started Exotel, says that unlike conventional enterprise communication, which he says is clumsy, cloud telephony is agile and thus took off because of a few key reasons.
“What cloud telephony does is convert capex to opex (capital expenditure to operational expenditure) which is important both for start-ups as well as large enterprises. It provides for superior scalability, has high reliability and has lower cost.” Exotel counts Quikr, Urban Ladder, Zivame, Craftsvilla, Practo, Bluestone and redBus among its customers.
Ambarish Gupta, CEO of Knowlarity and a former McKinsey consultant, says that the sector initially was slow to take off due to an awareness problem. Knowlarity is the most well funded cloud telephony player in the country,
“However, that has been addressed. We are just like other SaaS (Software as a Service) providers. We provide scale and reliability at low cost,” he says. “For instance, we provided the backbone for that Aamir Khan’s programme on TV, ‘Satyamev Jayate.’ When Aamir says call a particular number flashing on the screen, the surge was 2000 calls a minute. Only an on-demand hosted technology provider with robust systems could address those needs. That is the magic of cloud telephony.” Today, Knowlarity’s solutions process more than 4 million calls-a-day and it has raised $41 million from the likes of Sequoia Capital, Delta Partners and Mayfield Fund, making it the highest funded cloud telephony player in Asia.
More than mere cost savings, cloud telephony players say that the biggest attraction to customers is the analytics and actionable intelligence that they can provide. Ankit Jain, who runs VoiceTree Technologies which offers cloud telephony under the brand MyOperator, says that this tracking, reporting, recording and analysis provides a number of insights helpful for cloud telephony users to both attract and retain customers.
Gupta says that unlike popular perception, cloud telephony is not limited to providing IVRS solutions (Interactive Voice Response Solutions). For instance, when you book a cab you may not want the driver to know your real number (stalking and other issues are for real). So, cloud telephony masks your number when Uber or Ola direct your calls to a driver. When the driver calls you through a call centre, he does not have your number – the data is secure with Ola or Uber.
Apart from number masking, call directing, recording functions, cloud telephony now can provide services like fax, sending bulk SMS or voice messages, call forwarding,
conferencing and various other facilities. However, start-ups and SMBS (Small and Medium Businesses) have been the most aggressive adopters of cloud telephony. SMBS in India are less productive than their more developed counterparts across the world, because they deploy lesser amount of technology. Easily available enterprise grade technology for a variety of reasons – cost, use case, etc – are not suitable for them, avers Gupta of Knowlarity, and thus they have adopted cloud telephony.
C.S.N. Murthy, CEO and founder of Ozonetel says, “Even large enterprises are adopting cloud telephony. However, they have legacy investments in equipment. But their new additional loads are being moved to cloud.”
Market Size and Competiton
While there are no independent estimates for the size of addressable market, industry players point out that domestic BPM (Business Process Management) market alone is worth anywhere between $ 6- 7 billion. However, isn’t the entry barrier low for the industry? Also, aren’t cloud telephony players competing with CRM ( Customer Relationship Management software) sellers as well as helpdesk service providers like Freshdesk, Zendesk or a Zoho?
Gupta of Knowlarity says various players are competing by targeting different segments of the market. “For instance we believe that Ozonetel is playing more to the contact center and enterprise market, while Exotel offers APIS (Application Programming Interfaces) to customers that they integrate whereas we are targeting the SMB market. Also, our dexterity and ability to offer focused solutions, we believe give us the edge over CRM players or a helpdesk player.”
Murthy of Ozonetel says that his company is targeting the entire spectrum. Both Ozonetel and Exotel say that they have built a moat in the form of IP. “We have filed for three patents which are pending. More importantly, the routing and intelligence we have built is not easy to replicate,” says Ganesan of Exotel.
Murthy of Ozonetel says they have put together their own customised hardware too. The company has raised ‘less than $1 million in Angel funding’, claims to have revenues of a little over $4 million and is profitable. Most of them rely on online marketing like Google Adwords, Facebook and Twitter apart from customer testimonials to scale. Even as they establish themselves in India, they are eyeing international markets.
Ankit of VoiceTree says he is looking to spread across South East Asia. Knowlarity says it already has a footprint
in not only South East Asia but also Middle East. Exotel is making a big push into Africa and other parts of Asia. “Needs of customers, the way businesses are run are similar and thus requirements from solution whether in Asia or Africa would be the same,” says Ankit Jain. Ozonetel is trying to crack the western markets with Murthy relocating to the US to understand the market better.
Cloud over cloud telephony
Inspite of the general upbeat prospects of the industry and the enthusiasm of the players, there is however a dark cloud hovering over the sector. In the third week of June 2016, Knowlarity’s customers in Delhi were in for a shock as its services were disconnected. Initially, Knowlarity thought that it was just outage from a telecom service provider and that redundancy systems built in would take care of things. But when support lines went crazy with calls from hassled customers, they realized something more serious had occurred.
“There is no cloud telephony without telephony. A telecom official had ordered telcos to stop service saying that call conferencing is not permitted for our industry,” says Gupta. Most of the cloud telephony players offer what is called a ‘click to call’ feature allowing users to connect with a call center. One official of DoT claimed that this ‘call forwarding’ was illegal and had a telecom service provider shut down the service. Most cloud telephony companies have what is called Other Service Provider (OSP) license.
While Gupta is chary of naming the telco which disconnected service, he eventually went to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) and got a stay order against what he calls “ad-hoc and unjustifiable disconnection of services. Some 5,000 businesses depend on us to provide seamless services and what is appalling is that one official in one telecom circle could make things come to a grinding halt. That is what is saddening,” he adds.
K Guru Murthy, General Manager (Operations) of Ozonetel, fumes that some of the government officials at lower levels do not understand that cloud telephony players only provide value added services and not telephony services itself. “They thing we ought to have all kinds of universal licenses.”
Since there is no legal regulatory framework for the cloud telephony sector as a whole, the fear is that another low level government telecom official might disrupt services. “This impacts revenue of our customers and more importantly trust,” says Guru Murthy. The cloud telephony players have come together and are working with TRAI (Telecom Regulatory Authority of India) and Department of Telecom to ensure transparency in regulation and that start-ups are encouraged to provide value added services.
All of them agree that cloud telephony is here to stay and it will get more traction both with SMBS and large enterprises. ~
AMBARISH GUPTA CEO, Knowlarity
“WE ARE JUST LIKE OTHER SAAS PROVIDERS. WE PROVIDE SCALE AND RELIABILITY AT LOW COST”