Has the pandemic opened up a new surge of demand for hosted telephony products? We all witnessed the crazy period in March and April as businesses scrambled to go to remote working, but as we near the end of July the landscape still remains uncertain.
How many of us will make it back to the office? Will there be a second wave of the virus? There are a lot of questions we don’t know the answer to right now. A recent Comms Business poll indicated that 38 per cent of readers believe the prospect of a second wave is driving demand right now. Does this mean businesses are finally viewing hosted telephony as an enabler rather than a cost?
Justin Hamilton-Martin, Director of Centile commented, “The way businesses think about telephony has changed radically in recent months. They now realise that hosted and cloud-based telephony is a way to keep their staff productive and to drive remote collaboration. Cost matters, but it is taking a back seat to other priorities.”
Dave Reynolds, UK MD of Xelion said, “Every business evaluates the cost/benefi t of investing in technology. But the cost benefits of hosted telephony are compelling in terms of increased staff flexibility, efficiency and productivity. For start-up businesses the benefits are overwhelming. Unlike a PBX, there is no large upfront capital expenditure and as a service cost, hosted telephony is a completely tax allowable business expense unlike capex. Start-ups are likely to move premises frequently in the early years and with a hosted service it’s just a matter of plugging the phones in at a new location.”
Julien Parven, Director of Indirect Partners at Daisy Communications, added “Before COVID-19 I think hosted telephony would have been perceived as a cost, but I think that’s changed dramatically. Hosted telephony is arguably even more pertinent given that now an entire city or localised area can be placed into a second lockdown. This should urge business leaders to make the change to hosted telephony now because, should the second wave happen or they’re placed into local lockdown, then they could find themselves at a serious disadvantage if they’re unequipped and unable to trade. Therefore, I think that now hosted telephony shouldn’t be viewed as a cost or as an enabler but rather as an essential business service.”
Ian Rowan, Senior Channel Manger at Wildix said “Business owners are becoming more educated on cloud and “as a service” offerings with many actually asking for these types of services rather than traditional on-prem solutions. Th e total cost of ownership where these cloud services offer more than just voice is vastly reduced but if it’s just a phone deployed from a hosting provider then there is very little benefit, this is why there are still some business owners that want to avoid cloud telephony. Also wrapping people up into long term contracts, forcing them down a connectivity route and then giving them subsidised hardware if they also commit to long term contracts has a very negative eff ect on the market, how does this commit to connectivity work when people are not based in the office, the idea of cloud and hosting is that its accessible anywhere, as long as we still have these types of contract being pushed then it will mean that many end-user will still have these negative perceptions.”
Short term plans
Although uncertainty looms the Channel has thrived on its ability to adapt and meet the needs of its customers. In the short term there are many opportunities where businesses needed help, as the landscape progresses is there a longer-term need for technical expertise?
Paul Gibbs, Sales Director at MyPhones commented “The short-term gains are of course the move to enable remote working. I think the long term gains are going to come from the now heightened drive to get off of ISDN and ensure the long term ability to move with the times. Also I feel end users will be reviewing their fragmented applications and look enhance the UC applications that they use the most such as MS Teams. As Teams only enhances their video ability I think giving the opportunity to have true PBX functionality out of Teams will enable resellers to set themselves apart from those that don’t.”
Mark Curtis-Wood, Group Sales & Marketing Director at Vaioni said, “At the start of the lockdown there was a scramble to get people up and running, so they could take and receive calls from home. Post lockdown there is a new opportunity to drive over the top productivity solutions. Rich analytics, call recording and CRM integration are perfect value-added services where resellers can find extra margins.
This presents a great opportunity for partners to build longer term relationships with customers by enabling them to experience the frictionless experience of quick deployment and implementation. This will lead to customer loyalty as they experience the benefits of new technology leading to longer, larger contracts.”
Justin Hamilton-Martin added “Businesses’ hierarchies of needs have changed completely, what people value most has changed, and getting teams working and collaborating via hosted cloud solutions is seen as a priority. However, we are hearing that many businesses are really struggling to get to grips with their adoption strategies and — in some cases — purchasing is out of control. Many businesses, simply do not have the time or the appropriate resources or ambition to become telephony experts overnight.
This is where the channel has a huge opportunity to help those businesses make the right decisions, through locallybased consulting and advice from companies who truly understand their customers’ needs. Partners can be the guiding light for businesses to develop more formal, structured strategies around cloud-based UCaaS.”
The Teams phenomenon
There is no escaping the tech gorilla that is Microsoft. The Teams product has exploded and has given rise to many questions about what this means for partners. At the recent Commsverse event, a Microsoft community (virtual) gathering, Jeff Teper, CVP for Microsoft 365 Collaboration with Team, Sharepoint and OneDrive addressed the audience. He said “The support that you have given us in the growth of Microsoft Teams, the feedback that you have given us on the product, all the partners who have built solutions - hardware, software, or services around Microsoft Teams - we wouldn’t be here without you.” Although many remain skeptical about Microsoft’s long-term intentions, especially in the wake of the Metaswitch acquisition, it is impossible to deny the opportunity they have given traditional telecoms partners and service providers with Direct Routing.
Dominic Martini is Head of Product Management at BT Enterprise commented “Direct Routing and integrated propositions aren’t necessarily all equal, instead they are specifically relevant and matched to a business need. There is no one single solution or proposition that will do that and often it can be quite confusing for customers. For some, a standalone point solution may be all they need. For others, an integrated solution into their hosted voice environment may be more applicable. At BT, our approach is about promoting choice and helping guide our partners and customers to deliver the business outcomes they are looking for.”
Iain Sinnott, Sales & Marketing Director of VanillaIP commented “It means that the sale starts with meeting and collaboration and moves both back through the traditional telephony needs and forward through the portfolio of other productivity and customer experience tools. It is a benefit-led sale, not a cost reduction exercise. Resellers need to be careful how they use the MS Teams wave; it is inviting and powerful but likely as not to crash on their head mid ride. I am not sure Microsoft are not really focused on the channels long-term success.
There will always be diff erences and resellers’ salespeople will have to work hard to control the narrative. For us, integrating best in class products, on 30-day agreements represents both the most productive return for customers and the freedom to move with a marketplace that changes with an increasing pace. Resellers aiming to stay in the game long-term would be wise not to align too directly with the Mega Cloud players, as their value in the change will inevitably be squeezed.”
Alex Grant, Director at 24 Seven Cloud Communications, said “We see Direct Routing and integration as a sticking plaster trying to bridge two (or more) disparate systems. Over the next 12-24 months we will see more mature off erings from Microsoft and other
Vendors which will mean this direct routing integration is needed less and less. The recent acquisition of Metaswitch by Microsoft will only accelerate this process.”
Russell Lux, CEO of Telcoswitch, commented “Teams has introduced a host of opportunities for our channel partners. With Windows and Office, Microsoft is everywhere, and enjoying monthly billing relationships with their customers, so their strong position could be viewed as a risk. However, migrating to calling in Teams is complicated when you factor in number porting, geographical availability, configuration, call flows, to name but a few, and it’s expensive.
For solutions like ours, there’s an opportunity for channel partners to deliver a compelling offering that both adds value and reduces cost for the end customer, while protecting revenues for the partner. Ultimately success or failure comes down whether you can offer the partner a powerful proposition both technically and commercially, and support that partner in delivering it to their customers.”
Lux continued, “Where the end customer is using direct routing into Teams it’s easy to assume parity across all solutions. But we know that’s not the case, and partners have fed back a host of diff erent experiences across vendors. Naturally, there’s a commercial element as to what the vendor is charging and the breadth of inclusive minute bundles. But assuming all direct routing options are cheaper than Microsoft’s calling plans, it really comes down to what additional features the vendor offers, where we’ve done a lot of work with our call recording and analytics engine for those operating under strict regulatory compliance, and the resilience of the core infrastructure itself, ensuring maximum uptime and availability of voice services.”
Ian Rowan of Wildix said, “I had an example just today where an end-user had been using Teams remotely and enabled direct routing to allow calls in and out of the Teams client, now they are back in the office they needed a solution to connect the door phone and direct routing has no way of achieving this, so they had to port these numbers again to their SIP service for a function most people take for granted. Although at the time of total office closures this seemed like a great and simple idea, now that offices are now opening back up and people are returning back to their standard daily processes then more and more situations like this will become an issue. Integrations still allow for this but are limited on the feature set made available through Microsoft and their API’s. Either way, both options will remain a real option for many users and suit their needs in the mainstream.”
The next 12-24 months
The Channel loves a prediction, here we asked the market what they expected to see out of the next 12-24 months.
Mayur Pitamber, Senior Solutions Product Marketing Manager, 8x8 said, “Teams adoption will continue to grow rapidly, and it will sit at the centre of many businesses’ UC strategies. We also expect demand for Teams Direct Routing solutions to increase, as customers expect business standard, high quality voice calling capabilities from the service, no matter where they are working from. This upward trend will expand opportunities for partners, and create additional upsell opportunities for Teams including contact centre, analytics and call recording.”
Adam Cathcart, MD of 9 Group’s Partner Division commented, “The increasing reduction in the availability of legacy PSTN and ISDN connectivity from Openreach as their stop sell initiative gathers pace, will force an increase in the migration to IP based telephony. The wider availability of robust 5G connectivity will support the changeover to more remote and home-based working, with offices increasingly becoming meeting hubs rather than permanent places of work. Forthcoming improvements to mobile applications and softphone clients will support the user acceptance of the benefits of hosted telephony over traditional fixed line products.”
Gregg Knowles, Technology Director at plan.com commented “Digital transformation is late to come to voice but the opportunities are endless, as we see mobile, fi xed and cloud hosted services converge as one routing the numbers, be they mobile or landline into ever varying endpoints. A user wants a call to go to Teams – sure! An app on their phone? Yep, a desk phone? Not a problem – to a sim card – also not a problem, all of them to tandem ring? Why not!
“By creating a truly bespoke system for a customer’s needs and tailoring it exactly for what they need it to do, digital transformation is powering not just Work From Home but Work From Anywhere.”
Dave Reynolds of Xelion said, “We expect to see demand for more fl exible contracts to support rises and falls in users and the on-demand models we already see in many other markets start to creep in to the communications sector. The end of ISDN, the pandemic, environmental concerns over travel and other factors have conjoined to make this the perfect opportunity to sell hosted telephony services.”
Richard Potts, Managing Director of North Supply, commented, “The evolution of the market will, I believe, be influenced by a number of factors.
“Right now, businesses are still responding to the challenges of COVID-19 and facing the primary objective of keeping their employees safe. We all recognise that there has been a tremendous rush to place many employees in a working from home environment to maintain some form of business continuity.
“Progressively we will see many of these staff return to the office but it is likely that there will be a new and different form of ongoing work patterns that will see a hybrid and more flexible model deployed; one where meetings comprise a cluster of people in the office and other clusters of employees working remotely.
“Cloud-based applications such as hosted telephony will continue to off er flexible solutions for this scenario.
“Had there been no such thing as COVID-19 I believe much of the focus in the short to medium term would now be focussed on Artificial Intelligence and Machine learning (AI/ML) as automation can do a lot of the heavy lifting when it comes increasing productivity.”
Bart Delgado, MD of Akixi commented, “Remote working is the new norm for so many now, and that is only going to increase as businesses forced into using hosted solutions due to the pandemic, grow to realise that these tools do actually enable their teams to stay connected and their business to operate effi ciently away the offi ce, reducing the requirement for expensive real estate. Twitter and Fujitsu are among the companies who have recently announced permanent work from home plans.
For the market, this will mean understanding the full repertoire of hosted products that complement the core off ering of communications to give the partner a distinguishing factor in a crowded market. Those organisations who put in the time now to understand the options, either independently or via expert advice, will be able to keep their head above the water as the next year or two go by.”
