Channel opportunities in unified communications

The good news, whether delivered by voice, IM or video, is that everyone thinks unified communications (UC) is a really good area to get into

The good news, whether delivered by voice, instant messaging (IM) or video, is that everyone thinks unified communications (UC) is a really good area to get into. It’s so good, in fact, that you probably don’t need someone to tell you about it by voice, IM or video.

But that’s not going to stop people saying it. Linda Rendleman, director for partner business and development at Microsoft, claims “the opportunities for UC in 2014 and beyond are vast – both from a telephony and business transformation perspective”. 

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Partners need to adopt a UC strategy and understand from their customers what their business transformation strategy is, she says, to help “ride the wave from a sell, deploy and adopt perspective”.

Andy Litherland, vice-president for European channels at Avaya, is equally fulsome about the potential of UC. “Unified communications is a rapidly growing area for businesses and presents opportunities for resellers, with both the mid-market and large enterprises,” he says. 

The field of play has changed as employees expect a greater level of collaboration and the flexibility to work across multiple devices from multiple locations.

The type of UC system varies by business, from integrating office phones and mobiles, to a full suite of collaboration tools including mobile, video and network connectivity. 

Like Rendleman, Litherland believes resellers “are in the best position to advise their customers to ensure they get the best UC solution to suit their business needs, and that they fully realise the business benefits UC presents”.

Richard Roberts, managing director for partner and commercial sales at Cisco UKI, believes partners are “perfectly positioned to capitalise on customer needs to deliver a rich experience”. 

He stresses that the ability to “appreciate the key business dynamics of the customer, the specific business processes and interactions, and the ways in which cost is incurred by the business is incredibly important”. More than ever, he adds, it’s the understanding of the core business applications and processes “that liberates the value from a UC deployment”. 

Roberts says it requires an awareness of the critical business applications in play, the availability of different consumption models and the cultural and procedural implications of implementing a meaningful deployment.

Rami Houbby, UK managing director at Nconnect, cautions that UC is one of those terms that means different things to different people. “The first challenge is to make sure it is not only understood, but can be explained to customers in terms of the benefits it can bring,” he says. 

After that, it’s a case of ensuring “the solutions (voice, data, video and presence) are in place, the marketing collateral is ready and the limited training required has been completed, before it is taken into the field”.

Target markets

A number of observers view the SME and mid-markets as particularly strong spaces for channel partners. 

“I see the mid-market as a particularly strong growth area for the channel and I believe this is an area resellers should explore in 2014 and beyond,” says Litherland. 

Unified communications is a rapidly growing area for businesses and presents opportunities for resellers

Andy Litherland, Avaya

While many thought UC was mainly for large enterprises, he believes the mid-market “is embracing UC technology with gusto as organisations start to understand how enhanced communications can help them stay nimble and keep pace with their competitors, aid business growth and make staff members more efficient”.

Tony Smith, head of sales for the indirect channel at Unify, sees a shift in focus from many traditional UC providers from large businesses towards starting to serve SMEs. 

“This is a huge opportunity for the channel,” he says, “as there are more people working for small and medium companies overall than for large organisations. This burgeoning market is also one in which channel partners can add real value to customers – which in turn will lead to longer and, quite possibly, more profitable relationships.”

Daniel Fuller-Smith, EMEA sales manager for UC and solutions at Toshiba, says the biggest challenge for the channel is in educating customers about the benefits of UC, particularly in the SME space. 

In the UK, SMEs are lagging some way behind their enterprise counterparts, he claims, which is mainly down to “a lack of understanding around the improved productivity and value for money that a UC solution can bring”. 

Nevertheless, Fuller-Smith believes the time is ripe for SMEs to implement UC. “With this in mind, resellers need to ensure they are ready to play a consultative role and be prepared to invest the time in educating new business opportunities on the range of benefits they can enjoy by embracing UC.”

Barriers to UC adoption

He identifies two major challenges that are hindering UC adoption: an under-estimation of how it can increase productivity and a belief that it is an expensive outlay that struggles to offer significant return on investment (ROI). 

Fuller-Smith argues the channel is in a good position to address these misconceptions, with “independent and tailored expertise, that differs for each and every customer, to improve their understanding” and level the playing field for small businesses.

The challenge is even greater when it comes to ROI. He cites research from Frost & Sullivan suggesting companies expect a return on UC investment within two years – and some within six months. “These expectations are a stumbling block which the channel has to overcome,” Fuller-Smith says, "by educating customers on the long-term value of UC and its scalability."

Unify's Smith says UC has gone through a transformative period, as many UC companies have had to redesign their products and strategies to focus on software rather than the traditional hardware route. 

This is beneficial to the channel, he suggests, because there are less upfront costs and the proliferation of cloud will also allow them to be less reliant on physical products and to become more flexible and scalable.

However, the move from hardware to software will require many channel partners to re-focus their business, he says, and to hire more people comfortable working in a software environment. 

“The growing importance of SMEs might pose some initial challenges for channel partners,” he adds, “as they will have to begin building relationships with different types of organisations that act and operate very differently than the enterprise sector they may be used to working with.”

Channel opportunities

Despite the encouraging words from some, Houbby at Nconnect is not convinced that channel partners are fully engaged with UC. 

“From what we are seeing, the channel is not as prepared as it should be,” he states. “Many still believe it is difficult to offer a unified communications solution because it incorporates an all-in-one voice, data, video and presence solution, which is complicated, correct? Well, actually, no.” 

Houbby says the cloud has streamlined the delivery of unified communications, allowing resellers to offer unified communications-as-a-service (UCaaS). Built into a wider cloud offering, it provides resellers with a complete service to sell without the installation and capital expenditure (capex) “hassle”.

Richard Johnson, channel sales manager at MeetingZone, says UC may not be a core business for many dealers and distributors. “Too often it’s perceived as low revenue or too much of an investment risk,” he remarks. 

Operational revenue from collaboration services requires billing and a trained customer service team. “Channel partners might not have the time to do this in-house, or the visibility of the revenue stream to support it,” adds Johnson.

UCaaS is something which Simon Skelton, UK sales director at Mitel, is keen to talk about. “The biggest opportunity in unified communications today is also perhaps one of the most high-profile developments in recent times – the rise of the cloud and UC as a service (UCaaS),” he claims, describing 2014 as the start of the technology’s widespread adoption. 

He cites a recent MarketsandMarkets report which stated that UCaaS revenue is expected to double to almost $8bn by 2018.

Skelton argues that UCaaS helps to mitigate the risks of upfront investment for the channel. 

“Channel partners can prepare by introducing white-label, subscription-based solutions into their portfolios so that they can bring their own connectivity to their offering without relying on other cloud providers,” he says. 

Vendors can work closely with partners to offer flexible ways for them to migrate customers to the cloud in a way that suits them.

Team up for UC expertise

John Bird, head of systems and support services for UC at Exertis Micro-P, says that although hosted telephony is gaining the headlines and PBX is supposed to be “end of life next week”, that’s not the case. 

Distributors such as Exertis Micro-P will enable resellers to provide customers with a choice between a traditional or cloud-based service from a single supplier or a hybrid solution. 

Exertis Micro-P has recently launched a white-labelled hosted services and mobile airtime product, and Bird claims it is the right time to enter the hosted market “utilising our expertise in the unified communications and IT channel to deliver cloud-based voice services to the channel, equipping our resellers with additional product choice from a single supplier”.

MeetingZone's Johnson agrees that resellers should form partnerships with accredited and experienced service providers that can implement, white label and educate swiftly. 

He says a vendor needs to be able to offer partners fully branded services, with the capability of billing in the partner name. “We help make it easy to offer these services with minimal management tie-up and reduced investment risk. They also need to be able to provide appropriate training and marketing collateral,” he says.

Litherland at Avaya says the vendor is encouraging partners to embrace delivery technologies like cloud. “Our partners are adding value and strengthening relationships with customers by hosting Avaya solutions in the cloud and changing the model from capex to opex [operating expenditure], which gives customers the ability to scale up and turn services on and off as they need to,” he claims.

The subject of Capex and Opex is also something that Bird believes will be important from a channel perspective. “With the potential for the channel to move towards a Opex model - rather than traditional Capex transactions - distribution will adapt to offer billing and financial services as the reseller mindset moves to a recurring revenue and services focus, just as we have done in recent times,” he predicts. To highlight the scale of the shift, he reveals that Exertis Micro-P’s business plan is for recurring revenue business to contribute 30% of group revenue by 2020.

Partners should retain their traditional role of acting as trusted advisers to their customers and help customers understand the additional value they provide on top of the core technology

Cisco's Roberts says financing options will need to be flexible to support the various opex or capex offerings, so that the consumption and commercial model that best suits the needs of the customer and partner can be available at all times. 

“Distribution partners play a key role in assisting partners to ensure they are able to take advantage of the UC opportunities, from helping build their skills, providing the necessary pre-sale support and services, to ensuring availability of products, financing and ongoing business support,” he says.

Roberts says Cisco and its distribution partners can provide a full suite of services to “encourage partners to excel in the UC marketplace, providing scale and consistency so that a sustainable, profitable UC practice can be built”. 

Such a long-term, consistent approach allows partners “to invest with confidence, safe in the knowledge that they have the support of  the vendor, distributor and a suite of solutions that innovates at the pace required by today’s business”.

Microsoft's Rendleman says partners must be ready to talk about the "whole stack" and not just siloed technologies. 

“They must engage with the increasingly influential business decision-makers within organisations with the right messaging, and not rely on their IT grass roots. The conversation must be around the business strategy and benefits – communication, collaboration, knowledge sharing, flexible working – and not about technology or individual products,” he says.

Partners should retain their traditional role of acting as trusted advisers to their customers and help customers understand the additional value they provide on top of the core technology. 

“Just deploying the technology on its own relies too heavily on customers knowing how to best implement it when the technology isn’t their core business, so additional services from partners will often be the difference between success and failure,” Rendleman warns.

The message about the potential for UC is clear. Now, it’s up to channel partners to use their own communication channels to convey that message to their customers.

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