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1:1 Simon Dudley, CEO, Excession Events

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on Unified Communications & Collaboration


1:1 Simon Dudley, CEO, Excession Events

By: -
10 Oct 2015

For fun, I bought “The End of Certainty” on Amazon recently.  For those of you who don’t know the author, Simon Dudley has been around the video conferencing industry since IP packets were discovered in the Thames River.  Simon is a true free thinker, with interesting perspectives on a lot of business and social issues, but I’ve never figured out whether he is really smart, or whether his British accent just makes him sound that way.  I’ve known Simon for over a decade, and decided to call him on video and congratulate him on getting his book published, mention that I paid full price for it, and ask him a few questions about life in the fast lane as CEO of his new company.

WRExcession Events – that’s an interesting name for a company.  When I googled “excession,” I got the following:  “something so technologically superior that it appears as magic to the viewer.”  Is this what you are talking about?  

SD:  Excession events are simply points in time when the definition of success changes. These events have happened throughout history and have a habit of disrupting individuals, industries, even whole societies. One could argue that Christopher Columbus was an excession event to the native people of the Americas, or the iPhone was an excession event for Nokia as simple examples.

Most businesses don’t even consider that some existential threat might wipe away their whole business model. Most businesses plan for next year to look like this year but 10% better. Increasingly the world doesn’t work that way and the truly radical speed of technological change is creating excession events ever more regularly.

WR:  What is the business model for your company?    What do you provide your clients? (in other words, how do you pay your rent?)

SD:  Much of our work is around helping companies build strategies to help them see excession events coming and prepare accordingly. There is of course no one answer, but a lot of it is about building radically better business models and changing company cultures to enable them to see these shocks coming.  I also have a number of clients in the UC and video conferencing space and I’m working with them on projects as diverse as building user communities and product design.

WR:  So, you are a consultant?

SD:  Yes I’m a consultant. I have a habit of telling clients what I really think rather than what I think they want to hear. Oh and course I write. My book The End of Certainty: How to thrive when playing by the rules is a losing strategy has sold over 25,000 copies since August and honestly I’m almost embarrassed by how many people have said rather nice things about it.

WR:  In your book, you describe Netflix as an excession event for Blockbuster.  What would you say is an excession event in the video conferencing industry?     Perhaps Skype or Zoom and the cloud?  Or maybe Blue Jeans.  Aren’t these guys changing the game at a very fundamental level?

SD:  The single biggest excession event for the video conferencing world has to be Cloud /SaaS. I did a survey of the AV user group in London recently and over 80% of the group said they have no plan to own video conferencing infrastructure moving forward.  That would be remarkable for any group, but considering that community consists of the traditional powerhouse video conferencing users in Europe it was truly eye opening.

With cloud, the relationship between the reseller, the manufacturer and the client changes completely. No longer is it fire and forget. Now all three constituencies are tied together. The sales cycle may well be quicker at the beginning due to the low barrier to entry, but it never stops. The client is effectively re-buying the solution every month or quarter.  The pressure on manufacturers to continually be at the cutting edge is ever higher.

WR:  You’ve been around the video conferencing industry long enough to know the ins and outs.  In your book you note that every change in business has an accompanying “dip” – a time when revenues will likely drop and that lots of companies would rather manage their existing business rather than radically change it.   Would you say that Lifesize has bit the bullet on this point?

SD:  From all the research I’ve done there are basically two major coping strategies. Ignore it and hope it goes away, or turn and face it, retool, and attack it. The vast majority of businesses fall into the first category. They simply ignore the answers as the facts change around them. They typically work harder and harder, but at the wrong things. It is hard for folks who’ve had a business model work for a long time to grasp that they are simply asking the wrong questions.  It is human nature to simply want to curl in a ball and make it all go away. The trouble is that doesn’t work. Just because you don’t like an answer doesn’t stop it being true.

The brave companies and leaders think differently. They know that without change their business will die. By changing strategies radically they might even speed it up, but they also have a chance to succeed.

WR:  Well, what about Lifesize.  Did they bite the bullet?

SD:  I think Lifesize saw the tsunami coming and bravely decided to try and get onto this wave and not be crushed by it. Reinventing a business is tough and there are always going to be casualties as a result. But equally to do nothing would kill the company slowly. There’s no question Lifesize has a good product, and has done a great job moving from a hardware company to a cloud plus hardware company. Although I’m no longer part of the Lifesize team I wish them luck. If fortune favours the brave, then Lifesize deserves some good fortune.

WR:  The current video conferencing leaders are Cisco and Polycom.  But while video is a small part of Cisco’s portfolio and perhaps is not key to the company’s survival, the same cannot be said for Polycom.  Do these companies then face very different risks in terms of excession events?  How would you describe their prospects for long-term success?

SD:  I would argue that both Cisco’s Video division and Polycom are companies that have seen the future, don’t like the look of it and are doing their best to ignore it, hoping it goes away.

Of course Cisco has products already such as WebEx and Spark that look a lot more like a Cloud solutions, so it’s possible they will push more resources into this direction.  It’s obvious that their solutions are cobbled together from disparate sources, and it continues to be a mess. Luckily for Cisco many of their Global 500 clients are very conservative themselves so Cisco can still make money from them before the day of reckoning. It is also true that video conferencing is not key to Cisco’s survival. As a result I’m sure Cisco will do just fine, but it just won’t be a video focused business.

Polycom seems to me to be caught in the pincer. Cisco above them, most of the rest of the industry beneath them. It seems to me they are rapidly reinventing themselves as an audio company, and becoming the peripheral of choice for many. Personally I think such a strategy is fraught with danger, and they desperately need a cloud strategy to hold all the video products together as a cohesive whole. But of course I don’t know what they are working on. 

WR:  In the old days, video conferencing was complicated and expensive, and vendors could afford channel partners and direct-touch sales people.  This hardly makes sense any more.  I’ve often wondered whether the technology and price points combined with the ubiquitous internet and familiarity of online shopping will completely disintermediate the industry.  What do you think? 

SD:  Interesting question.  Perhaps everything everyone buys will end up on Amazon, but I don’t think so.  Clients need a thing that works, not technology, and they have neither the time nor patience to become subject matter experts. As all the conference room and UC products mature, the real skill set will be working between the systems, not only in getting the best from numerous solutions patted together but from the ability of an agile and innovative reseller to offer additional complementary services.

In many ways distribution and resellers are becoming more important, not less. They are the ones looking after the constantly re-buying client on a daily basis. Cloud solutions encourage much closer partnerships, and flexible and knowledgeable resellers have a very strong part to play there. Manufacturers simply can’t become experts in everything, they can only really know about their own piece of the puzzle.

One could argue that it’s the manufacturers who are on the back foot. In a world of purchased hardware solutions the manufacturer and client were effectively locked together in a Faustian pact. If there was an issue the client couldn’t simply throw the product out the window. Whether they wanted to or not they had to work to fix the problem with the manufacturer.

Today that’s changed. If a client doesn’t like the service they receive they can simply stop paying the supplier and go somewhere else. As a result I believe client retention rates should go up for resellers and churn is likely to increase for manufacturers. I think the solutions of tomorrow will be much more orientated toward software codecs with low-cost, high-quality peripherals attached in meeting rooms coupled with one or more Cloud infrastructure solutions.

It is extremely rare for the companies at the top to maintain their position after an excession event. In fact in all the reading I’ve done I can’t think of one.