Background - Strategic Context12 Mar 2024 11:21
This section of the update made me frown. It's misleading to say the decline in the Loop unified communications solution was due to the pandemic.
Back in 2018, Microsoft signaled the end of the Skype for Business solution and the start of rapid acceleration into cloud UC with Teams.
This was a major warning to on-premise managed service providers such as Loop that they needed to pivot away from their existing solutions towards teams and Teams add-ons. As I've said before, this transition led to a decline in the profit margins of UC providers because Cloud UC is so much easier to set up and cheaper to run.
The suggestion that Loop's plight is down to the failure of the Loop Board of Directors or is unique to Loop is incorrect.
This is one of those companies that operated in a time-limited niche market and was left behind in technological progression.
Then people say they should have been more agile in their operations and adapted. That maybe true. In my opinion Loop held onto their legacy platform and customers for too long, seemingly ignoring the elephant in the room because they offered better margins than any Cloud UC customer would bring. Was this wrong though? Maybe not because you may as well keep a 30% margin for a bit longer if a 5-10% margin was the alternative.
The truth is Cloud UC and Collaborations in general is a massive growing market, but it's not very profitable. It's a large-scale, tiny margin market and it's very difficult to make money.
That's the story of why Loop has ultimately de-listed.
I'm sorry to hear of any losses here and hope that investors can recover them elsewhere.
All the very best with your future investments.
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