Alexander Graham Bell kickstarted this entire industry of telecommunications when he was awarded, much to Elisha Gray’s dismay the patent covering the transmission of sounds telegraphically. What began as a monopoly continued that way for almost a century until a landmark anti-trust suit turned telecommunications into an industry full of competition & innovation.
This created opportunities for companies like MCI, Mitel, ShoreTel, and many others to compete against legacy manufacturers like Nortel, AT&T, and Lucent who emerged from underneath the Bell umbrella. With recent merger activity and talk in the Unified Communications world, we are wondering if we find ourselves and the industry retracting back to where we began, the mother of this entire world- Ma Bell.
The Bell Legacy During An Unchecked Century
The Bell company- which became AT&T was, for the most part, the sole manufacturer of all things communications. Owning Western Electric which was the manufacturing arm, The Yellow Pages, Bell Labs, AT&T Long Distance and various other subsidiaries in the communications world. If it had to do with communications, AT&T/Ma Bell owned it.
Seen as a utility by most there was no deregulation for the better part of a century. Although the Justice Department tried to break up the monopoly as early as 1949, the real landmark case came with the divestiture settlement which was announced on January 8, 1982, and carried out two years later.
Enter The Modern Era Of Unified Communications
With the breakup of AT&T into the Baby Bells in each region, this created the landscape that we are familiar with today. With it came not only more competition, but it also created some amazing commercials from MCI featuring Michael Jordan and The Looney Tunes characters. This new age seemed full of opportunity and new telecom providers were being created seemingly overnight.
Many of the manufacturers we know today came to prominence during this time, legacy Western Electric companies like Nortel and Lucent were now in direct competition with Shoretel, Mitel, Cisco & others. Deregulation led to a modern-day arms race to add features & clarity in the world of voice and our conversations had never been better within our own town or across the globe.
Mitel Goes From Lawnmowers To Phone Systems
In business, you sometimes need to shift your focus when your original idea doesn’t come to fruition how you planned. Around the time when the Bell Empire was being broken up Mike Cowpland and Terry Mathews originally had the blessing of their employer Bell-Northern Research to start their own company selling lawnmowers. (Mi)ke and (Te)rry’s (L)awnmowers (Mitel) quickly had to change their focus after their first 3 lawnmowers were lost in shipping.
They decided to produce a telephony tone receiver or tone-to-pulse converter based on the Ph.D. thesis of Michael Cowpland. Following the success of their new product, the founders delved further into the industry, realizing the value in software and microprocessors. Definitely, a decision they never regretted making, and neither have we!
From Explosion To Consolidation In Unified Communications
With so much opportunity within a new frontier came a deluge of companies entering the same space, which quickly made for a crowded and competitive landscape. The Telecom industry saw a meteoric rise in both new technology and stock prices during the late 90’s lasting until the early part of 2000 when many analysts realized that the investment in innovation did not match the investment in infrastructure to power that technology.
This is when we see a lot of consolidation within the industry begin with companies going out of business, or being devalued enough for larger companies to acquire their assets. The list of Avaya acquisitions since it’s original spin off from AT&T/Lucent in 2001 is an article in itself.
Voice Over IP Changed Everything In Unified Communications
While the internet nor the infrastructure was ready for the technology coming out during the telecom bubble burst in the 2000s. The increased bandwidth capabilities over the past decade have paved the way for an entirely new breed of competitors to thrive within the Communications world. Players like RingCentral, 8×8, and Zoom who were once laughed at by legacy industry giants have emerged as viable solutions thanks to the expansion of broadband.
This technology was unreliable in the early years of the internet not because of innovation, but because of the slow speeds available from Internet Service Providers. Like the majority of new innovations in the Unified Communications space, the technology is there long before the connectivity. Voice Over Internet Protocol (VOIP) is household terminology in the business world, and we are all better off for it.
Mergers And Consolidation In Unified Communications
If you can’t beat them, buy them explains the path of how we have gotten here today in the world of Unified Communications. Every great CEO has looked at the investment to create similar offerings of their competitors in comparison to buying or merging with that competitor. The latter has been the more common approach with Mitel purchasing ShoreTel, Avaya’s long list of acquisitions, and Microsoft’s seemingly unlimited budget to acquire companies like Skype. There have been even more deals that didn’t happen such as Polycom opting out expensively from the Mitel purchase, and Microsoft offering to purchase new players like Zoom.
If this is the future of communications which seems to be the case, this poses the question are we on track to having at a minimum the Baby Bell System back? Legislation and anti-trust laws will prevent a full-scale migration back to the Ma Bell days, however, we may not be that far off.
Why Inflow Has Aligned With Innovators In Unified Communications
If we have learned anything from the past almost 150 years in the communications world, it is that competition is a catalyst for innovation. As Mike Dolloff our Chief Revenue Officer spoke about last month, the converging worlds of Unified Communications have brought the legacy players and those born in the cloud together on one common field.
Regardless of what happens within the Unified Communications world, we have always aligned ourselves with the innovators from all sides within the industry. Having formed partnerships for the best in Cloud Communications, traditional on-premise solutions and workforce management like our friends at Teleopti has Inflow well positioned to continue leading the way in all things communications.
Curious on what your next step is to transform your Contact Center or Unified Communications strategy? Contact our team at Inflow to see how knowing where the industry has been can help you get to where you are going today!