In a joint survey of channel views Comms Business Magazine and VNU Exhibitions report back on resellers’ opinions on the market ahead of the Comms Channel Expo being held at the NEC Birmingham on 10-11 May 2006.

Each year we carry out a survey to gain a greater understanding of market issues and identify new key conference topics for Comms Channel Expo to make sure visitors get what they want at the show. This year the survey was carried out during January – the previous survey being in November 2004. Many thanks to all our readers that responded to the survey request.

We all know that one man’s meat is another man’s poison and that there are lies, damn lies and then there are statistics so rather that go through all the percentages we thought it would be better to take the key reported findings from VNU and add our own comments and leave readers to make up their own views or ring up and tell us we are off the mark.

Key findings

More resellers are recognising the benefits of convergence with statistics doubling from previous survey when respondents were asked about the key benefits.

The top three benefits noted by reseller were increased applications availability, better productivity and gaining competitive advantage and the percentage rises for these three were around one hundred percent with the hardy perennial of being able to use a single network training behind. It is interesting to note that a few VoIP providers I have spoken to recently are advocating separate DSL circuits for voice and data applications to prevent contention issues.

In our view application are the key to enhanced productivity. The business pre-requisites of reducing costs and retaining customers can be addressed through the right implementation of IP based applications.

End-user uncertainty of this technology in the marketplace however is still the main barrier to fully recognising these benefits, as is a fear that resellers are unable to demonstrate a return on investment.

This is actually very bad news as both sets of figures – user uncertainty and reseller fear of ROI, rose significantly over the fifteen month reporting period. What have we got to do to get over the benefits of convergence to the user and convince them they will see a return on investment?

From where I sit in the editorial office the one thing I keep calling out for are serious case studies that show the benefits. Whilst I do get some good user experiences sent in I can’t recall any such case study actually referencing a return on investment in the last year.We need vendors to lead the way here and produce simple as possible real life ROI models and examples that the channel can use to convince the customer. To quote Delia Smith, ‘Lets’ be having you’!

Enterprise and corporate are the main market segments where convergence applications have been well received.

Here’s a view that may ruffle a few feathers. If, as the survey suggests, resellers are not confident of selling convergence applications and if, as most observers believe the channel sells predominantly in the SME space, why do they think enterprise and corporate customers – who they don’t talk to – are up for convergence? OK, so there are a few ‘ifs’ in there but it seems to me the problem lies in the lack of success resellers are having with SME’s. The SME market is where the reseller can really add value for supplying services as well as product.

Voice centric resellers are implementing more staff training programmes than in 2004 to widen their areas of operations into data products and applications; this figure has tripled since the last survey.

So what, it ain’t working anyway is it according to the above findings. Only kidding. Apart from lashing out in the transfer market to buy in ready made talent training is the obvious alternative but are resellers getting the right training and are they getting value fro money from their vendor partners?

Respondents still feel it is more important to grow their customer base than focus on retaining current customers. This figure remains almost unchanged year on year. In fact, in response to another survey question, generating sales leads and keeping pace with product / application developments are the main issues faced by respondents on a day to day basis.

It’s a tough call for many resellers trapped in a cycle of having to sell high value, high margin products every month to pay the bills rather than protect and build up service based and upgrade revenues. The trouble for resellers is that finding new business takes up a lot of their time; lead generation is expensive for the most part, albeit that our own Comms4Business service provides a really cost effective way of finding sales. Doing both activities on their own for most resellers is difficult. The answer? You have to spend money on marketing wisely and get cost effective programs such as the aforementioned Comms4Business lead generation working for you.

The top new technologies being added to respondents’ portfolios in 2006 are: VoIP, IP Centrex; Hosted IP PBX; fixed to mobile convergence; wireless, e.g. Wi-Fi.

No surprises here then but what about vendor selection? The VoIP based trio are somewhat easier for resellers when it comes to identifying potential partners as these companies are all keen to speak to resellers themselves in order to start recovering their not insignificant service start up costs. Differentiating between offerings is going to be hard and our advice would be to look for experience and support as the key ingredients. Look for case studies and speak to other resellers selling the services rather than worrying about price differentials in cost per user per month. Thereafter look at features and product road map to make sure you have downstream revenue potentials assured.

Fixed to mobile convergence is in reality, despite all you may hear, still in its early days. How do I know this? Because the emails I get on the subject are geek flavoured technology based pieces rather than fluffy, cuddly here’s our latest product based. Don’t be mislead by these comments however, FMC is likely to be a huge opportunity one day real soon.

Seminars

OK, I give in, here are some statistics.

• 46% of respondents would like to see more product based sessions at Comms Channel Expo.

• 49% would like to see more market focused sessions.

• Converged communications (79%) is the main area of interest for respondents, followed by network services and applications.

• The most popular conference topic is ‘maximising growth in the SME market', followed by sessions on convergence.

• 84% of resellers experience increased product and application awareness as a result of their visit to events such as Comms Channel Expo.

What do you want me to say? The channel has spoken and we will listen and provide the sessions required. Selling convergence to SME's would appear to be the most obvious seminar session to organise.

When asked which companies they would like to see speaking at the seminar podium resellers said BT on 21CN, followed by Cisco, Alcatel and major network operators.

Leaving aside the excellent lobbying from certain quarters, let’s look at BT and 21CN. The CEO of a

Queuing to get in at Expo 2005

major competitor to BT I spoke to last month told me that he thought BT was creating FUD in the market when it comes to 21CN and taking the moral high ground in their announcements which were based upon BT looking after the interests of UK plc. I think both are right. Last month, when we published our interview with Daryl Dunbar of BT 21CN we created a lot of comment. Here’s an example from Terry Hayden of Evotel and himself an ex-BT man.

“I read with interest the diatribe from friend Daryl regarding the future compatibility of PBX. BT has a proud record going back to the 20’s and 30’s of aggressive modernisation programs which do not preclude existing users. I.e. Automation, IDD, Digital exchanges etc. In addition they have led the world with in house spawned products such as DASS, and DPNSS to enable private networking. This was in a company led by Engineers not the present day spin doctors who seem endemic to all large corporations such as BT.

Coming back to the point, is Daryl really saying that BT’s billions investment will not support international standards such as ISDN 30e and earth calling exchange lines? Practically this is all that is required for the major percentage of PBX users today. Perhaps they have listened to Cisco whose early IP Phones had dial tone as a future ‘option’! You may add meter pulsing for hotels/hospitals as well as DPNSS and AC15 to complete the picture.

I would urge you to press BT to come out of the closet on this FUD as if they will not support these interfaces, they will miss out big time, as there are plenty of ‘black-box’ manufacturers as well as the PBX vendors who will grab the space.”

Urge we will Terry. Meanwhile Cisco will clearly want to be singing from the rooftops soon as we understand they are shortly to announce a new package of voice related products for the channel – more on this next month.

See you at show