Three months into the top job at NFON UK Managing Director Myles Leach reveals how a period of consolidation following impressive growth will provide the springboard for an ambitious push into the cloud telephony SMB market.
Leach took over the reins as NFON UK head honcho following the departure of former Managing Director Rami Houbby in May. The pair had worked closely together after Leach's appointment as UK Business Development Director three years ago and more latterly as Strategic Channel Development Director following promotion. Now Managing Director, Leach's first job is to consolidate following a three year period of fast growth and then continue to engage with key partners while taking NFON UK's channel programme to the next level. Leach commented: "We have established a great foothold in the market, now it's imperative that we have the right programme to move us forward while developing technologies around the core NFON solution."
Leach has been working in the telecoms industry since the early nineties. He spent ten years as the Managing Director of a traditional telecoms reseller and joined NFON UK in April 2014, the big attractions being its European reach and technology ownership. The UK office was in start-up mode, so he could assist with building and growing the operation from the ground up.
In the past year NFON UK ramped up a growth rate in excess of 300 per cent, 14 times faster than the overall market growth of circa 26 per cent, a figure estimated by Cavell Group. The 150-plus seat segment accounts for the largest portion of this expansion. More good news: During the same period staff headcount has grown 25 per cent while accredited channel partners have risen 46 per cent. Leach says these growth statistics reflect the aptness of NFON UK's offering to the market, an alignment that was first underscored when the company won a contract with the London Borough of Hackney. "It was a huge win for more than 5,500 users," said Leach. "It reinforced the belief that our product and the peripheral technologies were right for the UK market."
The company now boasts over 100 channel partners and its technology relationships include Westcoast, a key Microsoft CSP. The IT distributor added NFON's cloud telephony product portfolio to its range of cloud services in February this year, enabling its IT partners to make a shift to selling voice. Other routes to market include partners Chess and ScanSource which both broaden NFON UK's footprint and reach into the corporate space via a two-tier model.
"During this time of growth we have been working hand in glove with our partners to ensure that they are reaping the full rewards of adding cloud telephony products to their portfolio," added Leach. "Currently, only a small percentage of the UK business telecoms market is cloud-based and this is only going to increase, driven by customer demand. The fact is that customers want one supplier to deliver their ICT requirements."
To give the market what it wants NFON is currently developing an entry level contact centre product and also working on improvements to its call analytics which are planned to launch by Q1 2018, as well as pressing ahead with developments to its UC offerings. Leach says these developments reflect a change in market dynamics with customers demanding more cloud services, moving their data to the cloud and wanting to do the same with voice. "This has accelerated the cloud telephony market," added Leach. "There is a significant opportunity for our partners to sell an array of value added services as mobile working and UC go from being buzzwords to business realities."
Leach is especially abuzz with excitement about the potential of NFON UK's new link-up with Westcoast. Why? Because it gives partners an opportunity to deliver Skype for Business as a Service through a single solution. "For a long time we've had server level cloud integration with Skype for Business, removing the costs, risks and delays associated with application level integration," said Leach. "It also changes the economics for full-blown UC, unlocking its capabilities for the SMB market and making unified solutions available for fast rollout without any on site hardware or software, on a monthly subscription model with a 30-day rolling contract."
Leach noted that the SMB market is now a key growth area for NFON UK as it looks to consolidate a long period of market expansion in the mid to large enterprise space. "The Skype for Business proposition is a great opportunity," he enthused. "Once we start working with our more traditional reseller partners they are quick to embrace and maximise the potential. With cloud telephony being plug-and-play the revenue opportunities are huge."
The main challenge faced by traditional telco resellers is overcoming their heritage of selling on-premise solutions and moving to cloud telephony, a shift that requires a new business model based on recurring revenues rather than capex deals. And according to Leach, this is not a time for traditional comms resellers to sit on their hands. "Delaying the inevitable increases the threat of losing business to IT resellers," he stated. "Previously, the entry barrier for IT VARs into the voice market was high, but cloud telephony is fundamentally different. Getting started couldn't be simpler as it's an out-of-the-box solution."
That said, the boot could easily be worn on the other foot, noted Leach. "Voice resellers can flip the threat from their IT reseller rivals on its head and take a slice of their pie," he said. "We have a number of traditional voice resellers that started with cloud telephony and have now moved to also selling other ICT services such as Microsoft Office365. The cloud has blurred the lines between voice and data. The key is to get in on the action sooner rather than later."