The SMB space, the rise of software, the burgeoning security market and the shift from telco to a techco model are just some of the hotspots spotlighted at this year’s Margin conference (20th June, Forest of Arden Hotel and Country Club).
Having a tight grip on SMB ICT requirements is a top priority for resellers, according to Voiceflex CEO James Arnold-Roberts, who also pointed out that this sector makes up 99.9 per cent of UK businesses. “With the enterprise market becoming saturated and margin-poor, SMBs are increasingly important to partners who want to grow,” he stated. “Channel companies should evolve their traditional telco offering to ensure they can serve the sector, which is growing at eight per cent CAGR towards a £68 billion valuation.”
Voiceflex is currently transforming from a telco to a techco model and Arnold-Roberts cited research that shows 75 per cent of comms service providers will have undergone the same transition by 2025. He also highlighted Teams and WhatsApp as having huge and growing penetration rates in the voice enablement market; and noted that UK IT spend per user is growing with businesses allocating a significant portion of their IT budget to UCaaS, leading to £70 APRU by 2027.
But loyalty in the SMB space is at an all-time low, according to Giacom COO Nathan Marke. He pointed to data from Analysis Mason that shows 22 per cent of small companies are currently switching their telco provider, compared to just five per cent in 2019. “The top reasons cited were the provider’s lack of vision, strategy and breadth of product,” said Marke.
Currently, traditional telecoms accounts for just four per cent of SMB ICT spend, observed Marke. And communication services have (for the first time) become smaller than IT services as a percentage of overall global technology spend, according to Gartner. “Telcos have traditionally had the lion’s share of technology spend as they have been automating business functions for years,” added Marke. “Now, everyone has telco and software has taken over the world. It is an exciting market space because we are nowhere near exploring how software can automate business processes. If you are a telco and have wonderful relationships with your customers, then get into software because that is where the growth will be.”
If you are a telco and have wonderful relationships with your customers, then get into software because that is where the growth will be
The benefits of an MSP model were also underscored at the conference. MSPs are growing at three times the rate of traditional resellers when it comes to spend in the channel, and Knight Corporate Finance Director Adam Zoldan highlighted the growing dominance of MSPs as they drive most mergers and acquisitions within the sector.
So where are the highest growth areas for resellers and MSPs looking to diversify? Security was an area discussed by most speakers, and stats suggest that half of all organisations experienced a successful cyber attack in the last year, with an average £10,000 cost per attack. Furthermore, 82 per cent of organisations don’t expect this to ease. Anton Le Saux, Head of Cyber and IoT at Zest 4, said: “Adding cybersecurity will stop churn as customers will look elsewhere for these services. Cybersecurity is also an easy sell if you can show the threats customers face.”
Zest 4 has launched a proposition, called Cybersight Dark Web Monitoring, that functions as a door opener for partners to talk to their customers about cybersecurity – it scans the dark web and highlights breaches against a company’s security posture. Le Saux also noted that firms with a cybersecurity offering are valued with multiples of 10 times, opposed to six to eight for telecoms.
Voip Unlimited Head of Sales Paul Gibbs drew attention to the impact of Covid-19 on digital communication tools like Teams, which saw user numbers skyrocket from 13 million in July 2019 to 300 million by April 2023. He said: “Teams has been able to grow due to its rapid innovation and the increasing demand for business critical applications. There is margin to be made from the ecosystem of services that sit around these applications.”