Comms Business Magazine speaks to Oli Barker at BT Wholesale about his views on the hosted telephony and other cloud based services market.
Comms Business Magazine (CBM): Why should voice resellers now be delivering IT services from the Cloud?
Oli Barker (OB): Real threats are emerging from adjacent markets as voice becomes part of IT solutions offered by communications providers; be they traditional resellers, IT resellers, systems integrators or brand extenders entering the market with an already loyal client base built up. True convergence is opening up both risks and opportunities for all who wish to take them in this space. We’d strongly advise resellers to consider their first move to play in this converged world if they haven’t already, looking at options such as cloud call recording and UC office functionality. There is a real risk that end customers will approach alternative challengers for some of this capability, opening the door for a single vendor relationship bundling voice and IT over time. Closing the door on cloud-based services could also mean locking out really valuable opportunities to not only defend and secure, but grow, long-term relationships with existing and new customers.
It doesn’t have to be a revolution from day one – more evolution. Working with a supplier who is investing in staying ahead of the curve on your behalf will help position you well to take advantage of new, future proof solutions as your relationship matures.”
As the industry becomes more familiar with cloud-based services and comfortable that the potential for margin erosion is not as first thought, we’re definitely seeing names that you would traditionally associate with equipment based services or data network solutions embracing the cloud. Hosted services offer a compelling monthly return with margins ranging from 30-50% and greater potential for longer-term profitability and customer ‘stickiness’.
One of the key challenges to faster take up is arguably the construct of many current sales bonus schemes, which incentivise top performers with large up-front commissions that don’t sit well with the steady and sustainable monthly income associated with hosted communications. Solutions to this could include accelerators, overlay incentives of high-commission payments, which may increase in prevalence as the move to cloud continues.
CBM: How do suppliers ‘shake’ the resellers out of their CPE based comfort zones?
OB: No ‘shaking’ is necessary. This is about evolution not revolution.
We would definitely recommend that all CPs and resellers have a strategy and glide path to address the cloud that works for your business and the customers you serve currently – and want to secure future business with.
The best way for traditional CPE resellers to increase their comfort with the cloud is to steadily change the mix and balance of their business, offering increased hosted options alongside existing CPE business. At BT Wholesale, our customers are telling us that the value we add into our offerings keeps generating new conversations for them with end users, proving the long-term benefits of including cloud-based business in your portfolio.
Once up and running, Hosted Communications Services provide a real opportunity for long term relationships with your customer, and multiple opportunities for productive conversations as more richness and functionality is added.
CBM: What are the first steps that resellers should take in their journey to the cloud?
OB: The first step you take will depend on what kind of business you are – be it voice, data or IT. It definitely feels like a big move if your core business is in legacy voice, and you should look for a provider who has a portfolio to support you at whatever stage of the journey you are at, so you can move forward at a pace that feels right to you. BT Wholesale has just such a wide Hosted Communications portfolio, with SIP-T, Centrex and Hosted Contact Centre solutions, so we can support any customer according to their individual journey into the hosted world.
For many dipping their toe in the water, SIP Trunking is a good first step towards a cloud-based model, which can then easily be built on at your own pace as you work through your own roadmap from TDM to IP, and all that it brings. If you are a data provider who is supplying a new network, you could consider providing overlay hosted services, or perhaps if you are an IT provider, you could secure new income by offering the underlying connectivity and voice applications to complement the hardware, software or systems integration solutions you are already providing.