Windstream Communications MSL Award Write Up

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Windstream Communications MSL Award Write Up

  1. 1. 2011 South African Data Centre Green Excellence Award in Technology Innovation Cybernest 20122012 North American VoIP Access and SIP Trunking Services Market Share Leadership Award © 2011 Frost & Sullivan 1 “We Accelerate Growth”
  2. 2. BEST PRACTICES RESEARCHMarket Share Leadership AwardVoIP Access and SIP Trunking ServicesNorth America, 2012Frost & Sullivan’s Global Research PlatformFrost & Sullivan is in its 50th year in business with a global research organization of 1,800analysts 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 approachenables 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 Market Share Leadership Award inVoIP Access and SIP Trunking Services to Windstream.Significance of the Market Share Leadership AwardKey Industry Challenges Addressed by Superior Innovations and LeadershipFrost & Sullivan ongoing monitoring confirms that the North American Voice over InternetProtocol (VoIP) access and Session Initiation Protocol (SIP) trunking services market is in aperiod of rapid growth, as these services become the logical replacement for traditionaltrunking services for most businesses. As a result of this dynamic shift intelecommunications services, the market has become quite competitive. While the growth ofVoIP access and SIP trunking services currently presents a wealth of opportunities forincumbent carriers and the early contenders that were quick to launch VoIP services, Frost& Sullivan analysis reveals that challenges still exist for market participants.First and foremost, the competition for market share and the ongoing market consolidationare driving VoIP access and SIP trunking services ever closer to commodity status, resultingin falling prices and reduced profit margins. Furthermore, the number of competitivedifferentiators, including value-added services such as fixed-mobile convergence and hostedvoicemail, are eroding, as these features become table stakes within all competitors’offerings. Finally, with so many contenders trying to stake a claim in the VoIP access andSIP trunking services market, gaining brand recognition and a spot on enterprise customers’evaluation lists can be difficult.The market share leader in the VoIP access and SIP trunking services market is wellpositioned to address the challenges in this nascent and growing market. With anestablished customer base, the market share leader is well positioned to identify changingmarket trends, as well as opportunities to up-sell value-added options or additional services.© 2012 Frost & Sullivan 1 “We Accelerate Growth”
  3. 3. BEST PRACTICES RESEARCHMarket share leadership is also an important asset in hedging the effect of commoditizationby compensating for price reductions with sheer sales volume. Finally, the market shareleader more successfully garners interest from new customers looking for a trusted partnerwith a proven track record.Best Practice Award Analysis for WindstreamThe Frost & Sullivan Market Share Leadership Award is presented to the company that hasdemonstrated excellence in capturing the highest market share within its industry. TheAward recognizes the companys leadership position within the industry in terms ofrevenues or units, as specified.Windstream’s Performance in the VoIP Access and SIP Trunking Services MarketWindstream’s portfolio of VoIP access and SIP trunking services pushed the company intothe market share leadership role with 22.1 percent of the market, based on revenue (perFrost & Sullivan independent analysis). Combined with the acquisition of PaetecCommunications in 2011, Windstream witnessed over 150 percent growth in 2011compared to 2010.Key Performance Drivers for WindstreamWindstream’s market share success in the VoIP access and SIP trunking services marketcan be attributed to several factors. First, the acquisition of Paetec Communications in 2011secured a nationwide footprint for the company’s voice services and combined two of NorthAmerica’s top five VoIP access and SIP trunking competitors. The addition of the Allworx IPPBX platform to the Windstream portfolio gives its customers a third option, morespecifically, managed on-premises IP telephony. Furthermore, it also offers hosted IPtelephony and UC services, which complete the gamut of telephony solutions for businesscustomers. These three options align very well with Windstream’s go-to-market strategy ofselling customers on holistic unified communications solutions, rather than disparateservices, which is the strategy employed by most of its competitors. Finally, Windstream’saggressive acquisition history has made the company adept at both choosing acquisitiontargets and integrating these acquisitions into Windstream’s product offerings.Paetec Acquisition Adds Depth and Scale to WindstreamWindstream’s acquisition of Paetec Communications in late 2011 strengthened Windstream’sposition in the VoIP access and SIP trunking services market. Prior to the acquisition, thetwo companies were nearly equal in market share, each among the top five competitors interms of revenue market share for 2010. Under one roof, the two combined entities pose a© 2012 Frost & Sullivan 2 “We Accelerate Growth”
  4. 4. BEST PRACTICES RESEARCHserious threat to the large incumbent providers that round out the top five. The Paetecacquisition also affords Windstream a national reach and a strong existing customer base inPaetec’s heritage markets. As Windstream completes the integration of the two sales teamsand the various systems under a common set of product offerings, Frost & Sullivan expectsthat its competitive position in this market will grow even stronger.Selling Unified Communications, Not ServicesWindstream’s competitive strategy revolves around selling the benefits of unifiedcommunications, rather than selling specific services to its customers. Frost & Sullivan notesthat this is a fundamentally different approach from that of many of its competitors in theVoIP access and SIP trunking services market.By selling customers on the concept of unified communications and through its ability toprovide customers with different deployment options, Windstream is able to design solutionsthat are tailored to each customer, rather than pitching various individual components of anenterprise’s unified communications platform.Product Offerings That Cater to the Enterprise CustomerWindstream has progressively directed its focus on the enterprise customer. Unlike itscompetitors, Windstream does not focus on single VoIP access lines or analog linereplacements for the extremely small office or micro branch, though the company may steerthese customers toward its hosted IP telephony solution or a managed service with itsAllworx IP PBX platform deployed on the premises. Either option provides small to mid-sizedbusiness customers with a feature-rich alternative to standard analog lines without theburden of capital expenditures.For larger customers, Windstream’s primary voice offerings include VoIP trunking servicesfor customers with legacy TDM PBX or non-SIP IP PBX system or SIP trunking services formodern IP PBX and on-premises unified communications platforms. To maintain quality ofservice for voice as well as to provide the flexibility of bundled pricing, Windstream onlyprovides its VoIP trunking services over its MPLS and data networks. In fact, the company’sdata/voice bundle is a differentiated solution, offering customers a set amount of bandwidththat they can leverage for all of their voice, Internet, and data network needs. When not inuse for voice traffic, an enterprise site’s connection is available for faster downloads, forexample.Finally, Windstream directs significant effort on pre-sales engineering to ensure that theproducts and services they provide meet their specific customer’s needs. This approachprovides superior value to customers compared to the delivery of a boiler-plate menu ofservices, ensures customer loyalty and retention, and provides opportunities for attachmentof additional services going forward.© 2012 Frost & Sullivan 3 “We Accelerate Growth”
  5. 5. BEST PRACTICES RESEARCHConclusionWindstream has earned the 2012 Frost & Sullivan Market Share Leadership Award bypromptly addressing the needs of its enterprise customers, and through the Paetecacquisition, by combining two solid competitors into a single strong one. Success throughacquisition is never guaranteed, but Windstream is properly leveraging Paetec to extendits reach and find growth within a market quickly heading toward commodity status.Finally, creative bundling of data and voice services in ways that make the most sense tothe customer have helped Windstream find success in a highly competitive market.The CEO 360-Degree Perspective T M - Visionary Platform for GrowthStrategiesThe CEO 360-Degree Perspective™ model provides a clear illustration of the complexbusiness universe in which CEOs and their management teams live today. It representsthe foundation of Frost & Sullivans global research organization and provides the basis onwhich companies can gain a visionary and strategic understanding of the market. The CEO360-Degree Perspective™ is also a “must-have” requirement for the identification andanalysis of best-practice performance by industry leaders.© 2012 Frost & Sullivan 4 “We Accelerate Growth”
  6. 6. BEST PRACTICES RESEARCHThe 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 outlineshow our researchers and consultants embed the CEO 360-Degree Perspective™ into theiranalyses and recommendations. C EO s 36 0-D e gr e e P er sp ec t iv e ™ M o d el© 2012 Frost & Sullivan 5 “We Accelerate Growth”
  7. 7. BEST PRACTICES RESEARCH© 2012 Frost & Sullivan 6 “We Accelerate Growth”
  8. 8. BEST PRACTICES RESEARCHCritical Importance of TEAM ResearchFrost & Sullivan’s TEAM Research methodology represents the analytical rigor of ourresearch process. It offers a 360-degree view of industry challenges, trends, and issues byintegrating all seven of Frost & Sullivans research methodologies. Our experience hasshown over the years that companies too often make important growth decisions based ona narrow understanding of their environment, leading to errors of both omission andcommission. Frost & Sullivan contends that successful growth strategies are founded on athorough understanding of market, technical, economic, financial, customer, bestpractices, and demographic analyses. In that vein, the letters T, E, A and M reflect ourcore technical, economic, applied (financial and best practices) and market analyses. Theintegration of these research disciplines into the TEAM Research methodology provides anevaluation platform for benchmarking industry players and for creating high-potentialgrowth strategies for our clients. C ha r t 3 : 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 hAbout Frost & SullivanFrost & Sullivan, the Growth Partnership Company, enables clients to accelerate growthand achieve best-in-class positions in growth, innovation and leadership. The companysGrowth Partnership Service provides the CEO and the CEOs Growth Team with disciplinedresearch and best-practice models to drive the generation, evaluation and implementationof powerful growth strategies. Frost & Sullivan leverages 50 years of experience inpartnering with Global 1000 companies, emerging businesses and the investmentcommunity from more than 40 offices on six continents. To join our Growth Partnership,please visit http://www.frost.com.© 2012 Frost & Sullivan 7 “We Accelerate Growth”

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