By Simon Woodhead
It is customary for me to write something at this time of year, reviewing the year that is coming to an end and recapping on highlights.
Last time was slightly odd, in that I had had some time out of the business, and had to step back in. We’re 12 months from that, and I’m pretty happy. The Simwood team has been wonderful and we’ve come back stronger than ever, and in fact made massive leaps forward which I’ll touch on throughout this post.
The biggest change in the year has been to our culture. ‘Culture’ is something people talk about but doesn’t often find its way into decision making. I must admit I was one of those people and we had a ‘good’ culture almost by accident for so many years but it was arguably taken for granted. I wrote a couple of months ago how we’d been investing in nourishing ours, and the positive strides we’ve made there. Whether something is good or bad for culture is now a massive aspect in our decision making, from obvious things like which snacks to stock the kitchen with, through which candidate to hire, and ultimately which potential customers to pursue or even which existing ones to terminate. Whether culture is good or bad, it is self-reinforcing and we’re acutely sensitive to what can keep the wheel spinning the right way or indeed the risk of something slowing it down.
As a result of it spinning faster in the right direction we’ve welcomed more awesome colleagues. Parnita, Laura, Fred, Rashid, Lyndon, Greg and Liam have all joined us in 2023, not to forget Nathan who joined us in late 2022. I’m pretty sure you’ll have interacted with many of them as many are in customer facing roles; they’re all doing great, are already growing and embody the new Simwood culture and rich diversity. We’ve said goodbye and good luck to some valued long-standing colleagues such as our DevOps trainee Alex, who’d grown from an entry-level support role and has now gone off to explore the next exciting chapter in his career. Similarly Frazer, who many of you knew well and has been part of the furniture for the last 7 years told us he wanted a change in direction and left to retrain in cybersecurity; we wished him well. We’re very much looking forward to Amy starting in January to take a lead on sales and account management.
Everyone who has remained on board has enjoyed 20%+ pay awards this year (10%+ pay rises, 10% average bonus) and is now a shareholder in the business. We joined the Living Wage Foundation too because it is all too easy in these crazy times, even with the best efforts, for those at the entry-level end of the scale to fall behind. As we enter 2024, it is likely that the Real Living Wage is going to nudge some people along well ahead of inflation and that matters. Beyond caring for colleagues and their dignity, we want our team looking out for customers, not distracted juggling the electricity bill and the food shop!
Now all of that is an odd set of things to say, given the readership of this blog is mostly customers. I remember as a young man in finance how a client once looked disgustedly at our new office carpet (replacing one which was thread-bare ten years prior) and asked “how much has that cost me?”. It is natural that our costs feed through into our prices and customers, in the main, want us to be lean and efficient. There’s good news there because despite all of the above, we’ve cut costs over 10% in 2023 despite further massive upward pressure on data-centre and power costs, and even price-controlled elements going up for the first time in years due to a CPI element in the formula. We’ve done this through efficiency and automation. This has meant we’ve been able to avoid sweeping x% changes to our pricing and rather redistribute our pricing – cutting rates for larger volume customers and ensuring those who cost us more are paying a little more. That felt like the fair and sensible thing to do by all our customers. It has also meant we’ve been able to continue investing in the network; something that seems pretty lacking amongst our peers.
But 2023 isn’t all about costs. Bizarrely, despite having no effective sales function for 12-18 months, revenue has grown massively – +28% for a record year. We’ve maintained a 100% win-rate against BT IPEX and been very successful in attracting mature operators with decent volumes who recognise the additional value in the Simwood technology stack, as well as unbeatable economics. Similarly many of our long-standing customers have been growing strongly as well – 100% per month in some cases is mind-bending and makes forecasting 2024 a challenge! A good number of our customers have been acquired and we’re excited to see their next chapters. For a service which is dismissed as ‘commodity’ in a field where competitors prefer to buy Ferraris to investing in their network at all in the last 10 years, I see a real correlation here. The sexy exits have been of Simwood customers and those who have done best have been the most deeply integrated with us, leveraging features their peer group do not. That is a very exciting data point for those in the market-place recognising our value and thinking differently. I wrote a bit about this in Comms Business last month.
Whilst in yester-year our technology focus was very much outward facing, and in more recent times it has been inward facing clearing up technical debt, we’re now in the enviable position of being able to look both at exciting customer-visible developments again and making the wheels turn faster and more smoothly internally. Our porting operations have had some love internally, which was frankly necessary as we were at one stage struggling to keep our head above water with the huge volumes of imports driven by our customers. Lots of improved automation there is enabling us to scale that despite the reality that great people are hard to find. We have so much more to do there across the business but are now at a scale where the difference is palpable. With so many of our Carrier Services customers and Partners integrating deeply with our APIs, submitting ports automatically and then automatically ordering and provisioning CPE on the back-end, the competitive advantage they’re deriving is enormous. At some-point we’ll need to shoe-horn whatever accommodation of the OTS processes the OTA decides is appropriate for voice.
Externally you’ll have seen our work on Teams. We’re late to the party there, which is unusual, but to be perfectly honest if we were waiting for commercial justification it still wouldn’t be time. We’ve watched how the space has developed and, frankly, how ham-fisted other solutions are. We wanted to do it right and we wanted to ultimately get to a stage with Operator Connect where there was genuine integration and automation, not simply e-mail forms on the back of a portal which is how pretty much everyone has done it. We’re pleased with where we are and the road-map for Q1 is exciting.
The emergence of Simwood as a hub, into which customers plug multiple technologies and we intelligently route them at global scale with network level features previously only available in magic boxes or by hairpinning calls through third-party services, is also quite exciting. I described this in a blog where I said ‘the future of telecoms is a baked potato not a sausage’ but I appreciate that might be a bit lateral so have tried to convey more clearly in a diagram!
I hope you can see that an API orchestrated global core, offering omni-channel services and able to act as a hub between them, e.g. call in over PSTN, out to Teams and Zoom in parallel switching on a range of services dynamically is something pretty special. We’re not there yet in terms of all the services but I hope you can see where we’re going and how uniquely different that is to anything else in the market-place.
As I write this I’m preparing to leave for Singapore for one of the many industry events we’ve attended this year. Our customer-base is ever more global and you’d be surprised by some of the names now on the network. We’re not pretending to be a carrier in numerous countries, reselling a local whilst lying about our position, as seems to be the go-to strategy amongst many at the moment in a pursuit to be ‘global’. We do two things in two markets: Hosted and Carrier Services in the US and the UK. A clean wholly owned network, intolerant of fraud and robo traffic, with numbers that can be assigned to global enterprise safe in the knowledge they weren’t being used to fast-food orders 10 minutes before, shouldn’t be unique, but it is!
As always, we’re hugely motivated by our customers winning and making a difference in the world, and grateful to each and every one of you. I don’t know if I can say ‘Happy Christmas’ any more or if the wokes will hunt me down, but I hope you and yours have a fantastic break and we’re really excited to see what 2024 brings us all.