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With the switch-off of traditional ISDN and PSTN services now just six years away (December 2025), Microsoft’s entry into the small to medium-sized enterprise (SME) telephony market provides a significant opportunity for UK IT resellers.
With 35-40% of the 11 million+ business phone lines already transitioned to an IP-based telephony solution, there are still up to seven million phone lines to be converted before the big switch-off.
Microsoft’s launch of Microsoft 365 Business Voice opens this transition to its 10,000+ UK cloud resellers. With a typical price of £20 per line, this represents a £1.7bn recurring revenue opportunity.
The Microsoft 365 Business Voice service brings the cloud telephony capabilities that have long been available in the enterprise versions of Office 365 to all businesses and completes the unified communications (UC) capabilities of Microsoft Teams.
Microsoft’s research shows that existing customers of Office 365 have a greater than 50% propensity to buy an integrated Microsoft telephony service, increasing to 90% for businesses that have already adopted Microsoft Teams. With millions of organisations already using Office 365, this provides a rich hunting ground for resellers to win new customers and build new revenue and profit streams.
By adding cloud telephony to the Office 365 Business offerings, Microsoft is bringing together the IT and telephony worlds in a way that is sure to be disruptive to today’s status quo.
At Vuzion, we have long believed in the benefits that a full unified communications solution built around Office 365 can bring for small businesses and have wanted to offer a voice service for many years. However, the solutions available in the market before Microsoft 365 Business Voice never truly integrated with Office 365 and offered disjointed and complex user experiences.
With Microsoft Teams as the modern hub for teamwork, the addition of Microsoft 365 Business Voice can provide any business with significant improvements to individual and team productivity – improvements that enable quicker decision-making, resulting in the delivery of improved customer experiences.
In parallel the solution creates the ability for firms to introduce more flexible working environments for staff, while also ensuring significant cost savings that are associated with switching to a modern cloud-based telephony solution.
Adding telephony capabilities to Office 365 is not the only revenue opportunity for partners. There is also significant customer demand for training, adoption and change management services that help them take full advantage of the rich collaboration capabilities within Microsoft Teams.
Layered on top of this are a range of professional service opportunities they can harness for the design, deployment and ongoing management of solutions, along with the provision of a range of hardware to meet different user needs.
For a 35-seat customer that is already using Office 365 Business Premium, adding Business Voice represents an incremental £8,000-£12,000 a year of recurring revenue (Business Voice + device + managed service) with a blended margin of around 25%, along with one-off deployment revenue of around £5,000, with a typical margin of 50%. Video enabling small meeting or “huddle” rooms is a further revenue opportunity of £2,000-£3,000 per meeting room.
One of the strengths of Business Voice is the flexibility it provides to connect to existing SIP trunks or PBXs to make the transition to a full unified communications solution within Microsoft Teams. Connecting to an existing telephony solution can simplify the initial deployment, secure a longer-term upsell opportunity and swiftly provide customers with access to the benefits of Microsoft Teams.
Learn to earn
Having spent 13 years at Microsoft, I thought I was comfortable with working with lots of acronyms. While working with the Microsoft Teams product group over the past year on the development of the solution, I have been amazed at the array of new acronyms and language additions that are part of the telephony world and how much I have learnt.
Learning about this new world of cloud telephony is a big challenge that many IT resellers are going to have to overcome if they wish to provide a great experience for their customers and to tap into the market opportunity.
Michael Frisby, Vuzion
This isn’t just an opportunity for IT resellers, though. We are seeing traditional telephony resellers moving into the IT space and looking to add Office 365 and other cloud services to their services kitbag.
The two worlds of IT and telephony colliding brings not just opportunity, but also risk. Over time, if a reseller is not able to provide both the IT and telephony solution for their customers, they risk losing relevance and their business.
At Vuzion, we work hard to assist our resellers to remain relevant and have worked closely with the Microsoft Teams product group to build a set of Microsoft Teams and Business Voice courses to help our partners build the skills and knowledge they need, regardless of whether they come from the IT or telephony world.
A rounded telephony solution needs much more than just a calling plan, and so we have partnered with experts in their fields to build out a full solution portfolio around Microsoft 365 Business Voice to make it easy for both IT and telephony resellers to take advantage of the opportunity.
Whether it is voice and video hardware, professional and managed services or a service delivery platform that simplifies customer billing, Vuzion has ensured that it covers all the elements our partners will need.