Comms Dealer

Comms sector M&A activity reached standout levels last year, observes Marcus Allchurch, Partner at Acuity Advisors, who explores the driving forces and their implications for 2016.

It's been a standout year for comms sector mega-deals in the UK, the biggest being BT's acquisition of EE which was given the green light last month. BT has to be one of the great success stories of 2015/16 with a share price up by around 20 per cent against this time last year, a firm grip on its nationwide fibre strategy, a growing TV base and an infrastructure to sell into households and businesses across the UK. Furthermore, with Deutsche Telekom soon to own 12 per cent of BT's shares, we would anticipate more opportunities for deeper integration across the combined global footprints and, dare I say, further M&A.

Next up is the much anticipated merger of Three and O2. Three is raising £10.3 billion to acquire O2 from Telefonica with the objective of creating a £15 billion business post-integration with the largest pure-play mobile operation in the UK. Interestingly, it has been rumoured that Three will look to IPO the business after the integration has taken place in order to return capital to its investors.

Both of these deals present opportunities and threats to players in the comms channel. We expect BT and EE to spend some time integrating and working out combined fixed and mobile propositions to be sold through existing channels. This could open up some interesting opportunities for resellers to access EE's mobile network and some new services. There is probably more uncertainty around the future for O2's channel partners as Three's focus to date has been entirely on consumer mobile. This may present a huge opportunity for some channel players, although the potential for disruption will need to be managed carefully.

Looking forward, we have to expect more consolidation. Could Liberty Global re-look at merging with Vodafone? How will Zayo and Interoute continue their expansion plans? And what will TalkTalk do to future-proof itself in a market where converged businesses of scale are emerging all around it?

Turning to the IPO market - is there a bubble, and if so, should we expect it to pop? There is much speculation about another tech bubble, with some good justification. Square, the mobile payments business founded by Twitter CEO Jack Dorsey, shocked the market in November by announcing its intention to IPO with a valuation of $4.2 billion. This is around 30 per cent below its valuation a year earlier when it last raised private money at a valuation of $6 billion.

The reasons underlying this are complex, but the single biggest cause has to be venture capitalists over-pricing early stage companies in the hope that it will 'all be OK' when they exit via a listing on the stock market.

Acuity's view is that these situations, where unicorns are forced to float at lower valuations than they've had in the past, are actually positive overall for businesses operating in the comms market. Why? Firstly, most unicorns are based on the West Coast where there are many more precedents for high valuations of early stage companies operating in markets which they themselves are creating.

Secondly, there is no shortage of capital out there, and should investors shy away from unicorns they are likely to want to invest in lower risk sectors. Telecoms businesses tend to have attractive underlying economics which will always be of interest to investors. And thirdly, with the old guard including Microsoft and BT finally managing to re-invent themselves with a convincing strategy for the future, the place for channel partners will become clearer again and create significant opportunities for investment and value creation.

UK and European private equity investors have enjoyed a great relationship with telecoms companies over the last ten years or so, with many generating considerable returns on the investments they've made (such as XLN, Pulsant, Wireless Logic, Onyx, Six Degrees and many more). As such, we are aware of many private equity houses looking for new investments in the sector. Specific sub-sectors we have seen attracting particular attention include UCaaS, connectivity, security and IoT, all of which interest investors.

A key question for comms suppliers will therefore be, what is the right strategy to attract private equity investment? While I think it's fair to say that there is no right answer, there are themes that investors are keen to see: Recurring and booked revenue is key; capex should be kept as low as possible; and a differentiated capability is also attractive.

Not only should these characteristics reduce the risk during the investment period, but they should also make an exit to trade far easier. We led and completed five comms deals in 2015 and saw a clear preference for trade buyers to focus on filling strategic gaps in their portfolios rather than buying purely to top-up revenue growth and extract opex synergies.

Trends and activities in the M&A market are, on the whole, positive for the comms sector. We see a continuing 'wall of money' providing capital for mid-market companies to grow, improving fixed and wireless infrastructure, and some exciting innovation from new VARs who are able to deliver cutting edge solutions into businesses and deliver a clear improvement in service while reducing cost. These trends should continue to fuel M&A across the sector in 2016. •

24 Seven Communications' Managing Director David Samuel is a dynamic comms entrepreneur ready to stamp his mark on the reseller channel. Here's how...

Samuel's entrepreneurship, vision and strategic planning could be the spur for something big. He set up Leeds-based 24 Seven Communications in 2002 following a stint working for his father in the telecoms industry. "I recognised the need to demystify telecoms for business, particularly for a SME customer base, and saw an opportunity to do my own thing," he said.

24 Seven's turnover, currently £6 million, is certain to multiply. The firm employs 20 people and Samuel has plans to double the headcount over the coming two years. "During the past year we have made significant advances in the mobile market and launched a national roaming SIM card, Jump SIM," he said. "Its success has been a huge accolade for 24 Seven, along with the overall growth of the team and expansion of our services."

24 Seven's Jump SIM was developed in response to the growing demand for a solution to the national problem of poor mobile coverage. "This has been a topical issue for several years and I am proud to feel established as a leading voice on the subject," stated Samuel. "Jump has tackled an emotive and controversial problem that affects a huge number of people across the country."

Samuel leverages a wide portfolio of services designed to make businesses more efficient. These range from M2M SIMs, national roaming, call conferencing and recording, VoIP, SIP trunking, international termination, number ranges and mobile solutions. "Our bread and butter is in the SME market and this is very much where we see our future," stated Samuel. "We're able to offer an attentive service and our no-jargon commitment is crucial to this."

Direct sales remain important but Samuel has witnessed strong demand from resellers in the past year for 24 Seven's suite of products and associated data and billing platforms, giving customers complete control. "Since the recent appointment of a Reseller Channel Manager, Vinny Sohanpaul, we've quickly increased our profile among resellers," noted Samuel. "If you have the right range of products at a good price and can match that to customer needs it becomes a no-brainer for partners. It's also important that all of our partners are the right fit for our business. It's an area that we monitor closely because this helps to build strong and lasting customer relationships."

24 Seven offers bespoke packages to reseller partners, including M2M solutions across three networks and its roaming solution for both M2M and voice. "Demand for a national roaming service in the B2B sector looks set to continue and we are working with resellers to further develop the strong market for Jump SIM," added Samuel. "M2M services are on the rise and we're now perfectly placed to help businesses stay connected thanks to our recent agreement with EE. This means that we join a select group of businesses offering a 4G, 3G and 2G M2M capability via EE, which will be promoted through resellers."

Becoming an MVNO with complete control over its network and billing platforms was an important milestone and gave 24 Seven a much deserved confidence boost. "In terms of the mobile market, the recent mergers have impacted on competition," added Samuel. "Although it's good to see agreements forming between diverse service providers there is a fine balance to be struck between competition and consolidation if the market is to thrive. As Managing Director of a telecoms company I am monitoring and commenting on this trend regularly in order to keep our offering competitive and maintain working relationships."

The comms sector has always been highly reactive and confusion over technology and regulation continues to be a barrier, believes Samuel. "Therefore, as we look to increasingly professionalise our offer we're finding new ways to develop products and services that won't be constrained by these factors," he added.

"Due to the highly regulated nature of the telecoms sector the success of our business is constantly affected by outside factors - including Government and policy regulation - and it's a constant struggle for businesses like ours to jump through the often silly hoops they construct. That's why it's important to stay ahead of the curve and transition the business in line with the changing market."

With that in mind 24 Seven underwent a rebrand last year, developed new products, increased telecommunications market share and moved towards a more sustainable business model. "It's vital that regulation doesn't get in the way of progress as customer solutions always have to be at the forefront of our priorities," stated Samuel.

"In hindsight I would have been bolder in taking Ofcom to task over industry regulation. On the one hand it's calling for more competition. On the other its capitulating to the demands of big business. We have a foremost responsibility to our customers and nobody should get in the way of this imperative. Let's improve customer service throughout our industry and provide telecoms for better business. It is, after all, an enabler for companies of all shapes and sizes. I'd also like to see the Government take a stronger stance with the multi-national players, in particular the MNOs. They are vital for our business, and because of that they have a stranglehold which is itself a barrier to innovation and competition in our industry."•

Oxfordshire-based VoIP.co.uk's rebrand to Firstcom this month is the latest in a string of strategy moves from co-founder and Managing Director Adam Crisp who discusses how the traditional reseller model is being superseded by more meaningful strategic partnerships with trusted cloud service providers.

Crisp is a man with the vision to start a company from scratch and build it into a pan-European business, so you'd be doing yourself a big favour by lending an ear to his story and observations. Firstcom was established under the name VoIP.co.uk in 2004 by Crisp and Chairman Jean-Pierre Vandromme to address the growing demand for next generation IP-based communications systems. The company provides cloud services and was best known for its SIP Encrypt product which prevents phone hacking and is compliant with Payment Card Industry Data Security standards. "We built our network from the ground up and through our channel partners we now supply a comprehensive portfolio of products to any size and type of business customer," said Crisp.

Acquisitions have also been instrumental in the company's development and growth in Europe. In July 2014, Crisp extended his reach into Europe with the acquisition of Denmark-based UC firm Firstcom, acquiring 85 per cent ownership of the company and a group-wide rebranding opportunity which this month saw VoIP.co.uk become Firstcom. Soon after the acquisition Crisp relaunched Firstcom's flagship mobile enabled UC platform, called Universe, creating new opportunities for partners. He said: "Scandinavia is well ahead of the UK in terms of UC and this acquisition gave our UK partners access to superior UC products."

Just six months after snapping up Firstcom, Crisp reached deeper into European territory with the purchase of Germany-based telecoms company Teleforte, which also has offices in Poland and Spain. Teleforte operates in the traditional telecoms space selling international number services to customers including German airline Lufthansa. The acquisition completed Firstcom's service offering in the traditional telecoms space and ensured its UC product had a route to a wider market. "We now have offices in the UK, Denmark, Germany, Poland and Spain, providing a platform to strengthen our presence throughout Europe," said Crisp. "These transactions helped us close our first round of external funding to accelerate the growth of our pan-European group."

Introducing SIP to the marketplace was probably the biggest factor influencing growth in the company's early days, noted Crisp. But the more recent European activity has brought a much wider product portfolio combined with stronger product management, resulting in well propositioned solutions.

According to Crisp, Firstcom's biggest opportunity is subscription-based cloud communications complete with IP telephones, cellular mobile, mobile apps etc, all targeted at the SME sector, along with secure SIP trunking and cloud enhancements, cloud call recording and cloud menu systems. "We have invested in our own software development and network dev-ops team to make sure we deliver our partners and their customers ongoing upgrades and cloud-based features," added Crisp.

In May last year Firstcom embarked on a partner recruitment campaign following the launch of a new partner programme. The company wasted no time to on-board traditional telecoms, IT and security partners in a move that coincided with the launch of its new UC suite and a drive to boost sales of its SIP Encrypt solution. "Our revamped programme saw us offering support with sales collateral including social media as well as support with technical sales and proposals," explained Crisp. "We are also strong on channel partner training and offer technical, sales and marketing skills development within partner organisations.

"Our partner programme extends our reach through the creation of regional hubs across the UK in addition to continuing to work with our existing partners. We are aiming to bring the UK up to the same standard as other countries, such as Denmark, where ISDN is dead. For that to happen, IT and information security managers need to ensure telecoms is included as part of their overall strategy and not treated as a stand alone service."

Crisp welcomes telecoms resellers to the partner programme, but he is also attracting IT partners with great technical know-how but no telecoms expertise. "By adding our cloud telephony to their offering they can benefit from new revenue streams in terms of monthly commissions without having to re-train or support a new product," said Crisp.

Channel partners may not have the resources to identify and target growth segments on their own. With this in mind, Firstcom's main focus will be enabling new and existing channel partners to identify where they can grow their business and to help them formulate a sales execution strategy. "Partners are no longer just looking for technical support and residual commissions, they are also seeking value added services like sales and marketing assistance," commented Crisp.

"Our growth is due to next generation services that are fully integrated with wider communications and completely secure. Although we have an aggressive expansion plan across Europe, the UK is still very much a key focus. There is so much potential for us and our channel partners in the UK and we intend to build on our strengths and develop existing and new alliances."

Crisp counts his technical acumen as his greatest strength, and an ability to understand new things quickly can be traced back to his school days. "I have always been inquisitive by nature and want to understand how things work, so science at school naturally led to an engineering degree," he commented.

"Building a business and watching it grow organically is easy if that growth is built on engineering excellence and hard work. I've always insisted that our products are as good as they can be from an engineering perspective. But turning that business into one that achieves stellar growth meant drawing on the experiences of others, and having a strong financial team is critical."•

Caring about bespoke solution delivery is a subset of caring for customers post-sales and should be a primary goal for all comms providers, according to Karl Alderton, Managing Director, Comms Supply.

Alderton's calling to help SMEs fully understand their options when making buying decisions about their business communications came during a stint working at BT. He joined the company at the age of 18 and developed a successful sales career over a six year period in which he witnessed the issues faced by SMEs when dealing with providers, including some 'horror stories' that spurred him to set up on his own and establish Comms Consulting.

"We would act as the SME's telecoms director, helping them to make informed decisions about the most appropriate telecoms solutions for their business," Alderton explained. "However, I struggled to find suppliers who shared my attitude to customer care and grew increasingly frustrated. The only way to ensure the solutions I recommended would come to fruition in a cost-effective, professional and timely manner was to deliver them myself."

Alderton launched Comms Supply in February 2012 to deliver such solutions. By June 2013 the company had achieved £1 million turnover. "The business has been growing steadily over the past four years but it was three years ago that we started to see the market change dramatically," he said. "One of our first big step changes was to become an ISP in our own right, rather than being a reseller. By taking control of data we knew we'd have a significant advantage as more and more businesses migrated to SIP trunks and hosted solutions."

Comms Supply's natural next step was to develop its own SIP trunk and hosted solutions. "The ability to provide connectivity and the voice product gave us the opportunity to offer bespoke solutions based on the needs of our customers, as opposed to what we could purchase from another provider," stated Alderton.

Despite these successes the most significant milestone in Comms Supply's timeline to date came in January 2015 when the company moved from selling to end users directly and became a channel supplier. "We originally had a soft launch working with a small number of channel partners to ensure our processes were fit for purpose in a channel model," explained Alderton. "In September last year we publicly launched all of our products to the channel, including our hosted solution, YourUCP, and our SIP solution. Since then we have recruited a number of partners who are now enthusiastically recommending our products to their customers."

Over the past two years Comms Supply has witnessed its turnover increase by more than 100 per cent and its workforce double. "We are currently recruiting for three new team members to support our growth and we anticipate needing a further three people by April 2016," commented Alderton. "We believe we will achieve turnover of more than £2 million by the end of this financial year and forecast this to increase by a further 100 per cent over the following two years."

Alderton believes that Comms Supply's channel offering is its biggest opportunity. "Our strategy is to have a reasonably small number of key active partners across the UK, under 500," he added. "Another fundamental element of our approach is that our partners always have access to an engineer. After carrying out some customer research we decided that the customer experience was far more efficient and satisfactory when every query was handled by an experienced engineer, rather than a customer service executive."

Poor communication is a big stumbling block when building effective business relationships, noted Alderton. "That's why our partners receive a regular stream of updates about their order or service issue," he said. "They have the information they need to update their customers without needing to constantly chase us which improves the customer service they can deliver and reduces administration time for both parties."

Alderton is also aware that Comms Supply needs to increase the capacity of its voice network, and plans to do just that by over 1,000 per cent next month. "Some UK providers have run out of capacity in the past 24 months and we are determined to prevent this happening to us," he added. "As with any major upgrade, we need to fund the project without increasing the cost to our partners."

Alderton's other primary goal this year is to finalise Comms Supply's partner portal which will offer a single hub for partner interactions. "We want this portal to be intuitive and helpful for all of our partners, so we're investing heavily to get this spot on. Our hope is that we can get to 90 per cent of all interaction available from a single interface by the end of 2016."

A trend noted by Alderton is the growing demand for bundled services, whether that's free SIP trunks as part of a data solution or free minutes with a hosted solution. "We have already started providing bundled services," he said. "For example, all Ethernet Internet connections including EoFTTC and EFM are provided with free SIP trunks, which has supported a large increase in EoFTTC connections across our partner base. We are now discussing with our partners what other bundled solutions would allow them to sell more services while ensuring they are still able to retain a good margin."•

Not only are resellers looking to purchase hardware from distributor ProVu, they are also turning to the company for its menu of value added services, explains Managing Director Darren Garland.

Garland has witnessed a growing number of resellers wanting to use ProVu's systems and infrastructure to resolve their technical issues. This requirement is emblematic of a wider trend in which forward thinking distributors are starting to deliver value added services as well as kit. "Our reseller portal, ProSys, gives resellers access to a range of tools designed to ease the fulfilment and management of customer premise equipment," he commented. "With the added assistance of a technical support team, resellers also know that if they face more technically complex issues the team are on hand to assist. By enabling our resellers to remotely manage deployed phones and assisting them with more complex issues they are able to cut their costs as any technical issues become outsourced, allowing them to focus on their core business."

To better support resellers with services ProVu runs tests on all of its products before making them available to order. "This allows us to gain in-depth knowledge of our products," added Garland. "We also maintain close relationships with our vendors which allows us to learn and work with them on technical issues, helping us to continuously develop our product knowledge."

ProVu also offers training to staff and resellers to help equip them with the skills and knowledge to sell its products. "To give all of our resellers access to technical training we have made some of our training courses available online, meaning resellers can undertake training at an appropriate time for them and from the convenience of their own office," explained Garland. "We can also provide training at a resellers' preferred location."

In addition to reseller support structures, automated order processing is also part of everyday life at ProVu. Resellers are adopting this process as well as adapting their own systems to feed directly into ProVu's. "Through our portal resellers are able to place their orders outside of regular office hours with the config settings they require," added Garland. "Resellers can also access deployed phones and remotely manage them from their desks, saving time and money by minimising the need for site visits. Our APIs also enable resellers' customers to place their own orders directly onto our system."

Some products aren't as easily accessible as others so ProVu provides consultancy services to widen product accessibility and attraction. "For example, we have been supplying Sangoma kits for four years and from our experience we have seen that while there is a demand for these products, there is a shortage of people and services to support the install," commented Garland. "With high training costs many resellers simply do not have the means to install such products themselves. As a result, we offer wrap-around services for higher scale installs that require technical expertise.

"This not only helps to open up some products to a wider audience, it also enables resellers to add such products to their portfolio with the added peace of mind that we can assist them with the install and ship items ready to plug in and work out-of-the-box. Prior to an install, resellers can arrange a specific time with our technical support team to be on hand, over the phone. Upon agreement, our technical team's services become sub-contracted to the reseller, meaning they are dedicated to remotely support the specified install for the agreed duration."

Garland is currently assessing additional opportunities for ProVu to offer more value added services. "Our strategy to provide consultancy-based services should allow us to open up the market and make high scale installs more accessible to many of our resellers," he added.

To help resellers keep ahead of the curve ProVu carefully selects its vendors to ensure they have a pure channel model. "This helps resellers to maintain higher margins and ensure a traditional supply chain is maintained," said Garland. "Our resellers will not find our primary vendors' products for sale at lower prices on e-tailer sites. We are also open to suggestions from our channel partners as to what products they would like us to sell."

ProVu offers a range of VoIP products that help to ease resellers' installs by providing them with the complete package. "By not limiting ourselves to just one product line we empower our vendors to continually develop new items," noted Garland. "When launching a new product we ensure that we market items according to brand guidelines and offer resellers training and webinars to increase and develop their own familiarity with the products. Through our technical training, resellers can become fully equipped to sell our vendor's products."

In order to evolve, Garland believes that resellers should be looking to adopt a more flexible approach in their purchasing. "Not only do they want to be looking for cost-effective solutions, they should also focus on reliability and assistance in the maintenance of end devices from their distributors," he commented. "Ultimately, it is through the distributors' value added services that resellers will be able to grow and succeed in today's challenging market." •

Philip Carse, industry analyst at Megabuyte.com, reports on the recent trading performances of leading companies operating in the comms space.

UK quoted Telecoms & Networks companies have not proved immune to general stock market concerns and volatility, with one and three month declines of 7% and 16% outpacing the FTSE All Share's 3% and 6% falls over the same period. This is also a worse performance than the general Megabuyte universe of tech companies, down 3% and up 5% over the same period. This appears to have put a stop to the bull run of Telecoms & Networks companies in recent months, with a flat performance over the last year versus -7% for the FTSE All Share and +25% for the Megabuyte index.

One key driver of the poor performance in recent months has been TalkTalk, down about 35-36% over the last three and 12 months, following its well publicised security breach and the resulting £30-35m impact on FY15/16 profitability, or an approximate 10% hit.

The major sector news in the last month or so has been the CMA's approval of the BT acquisition of EE. The CMA justifies its unconditional go-ahead on the basis of very limited overlap between BT's fixed and EE's mobile activities at the retail level (has it not heard of quad play?). Regarding the wholesale impact, the CMA notes Ofcom's ongoing strategic review, thus effectively leaving any major decisions on Openreach to Ofcom. As a reminder, the deal combines the UK's two largest telecoms players, with EE's £6.4bn of annualised revenues and £1.6bn of EBITDA representing a 36% and 25% addition to BT's £18bn and £6.3bn. It would, however, almost double BT's Consumer and Business retail revenues of £7.4bn.

Another area of interest recently has been in fibre networks, with both tier 2 town and city fibre network provider CityFibre and rural broadband Gigaclear advancing their causes. CityFibre acquired KCOM's national network for £90m, funded through an £80m equity raise and new debt. The network, which CityFibre said would cost £200m to build today, significantly enhances its metropolitan footprint and gives it a new long distance network, advancing its business plan by five to seven years. Meanwhile, KCOM benefits from a substantial reduction in net debt.

Gigaclear received 25m euro in debt funding from the European Investment Bank, as part of a planned £90m funding this year, which will help fund 2016's planned 40,000-premises rollout. This comes on top of 15,000 live premises and 10,000 under construction as at the end of 2015.

In other corporate activity, Motorola Solutions is to acquire Macquarie-backed UK public safety network provider Airwave for £764m net of cash acquired. The price represents barely 3.1x EBITDA to June 2014, reflecting the wind-down of Airwave's TETRA network as the UK Government looks to 4G mobile networks for a lower cost alternative, and represents a thumping loss on Macquarie's £1.9bn 2007 acquisition. Shortly afterwards, Motorola was announced as the provider of end user services for the 4G-based public safety network, with EE gaining the network contract.

There have also been deals involving Intercity and COLT, though in opposite strategic directions. Intercity Telecom acquired Imerja, bringing IT managed services, hosting and security, adding approximately £10m revenues growing at 40% a year, and taking Intercity to about £35m revenues. In contrast, Aurelius Group-backed ICT provider Getronics announced the proposed acquisition of COLT Group's managed cloud business for an undisclosed sum, after COLT threw in the towel on its IT services business last June, baulking at the costs needed to get to profitability. This was highlighted with first half 2015 EBITDA losses of 7.7m euros on revenues down 14% at 33.3m euros.

In results news, comms and IT provider Alternative Networks announced 13% EBITDA growth to £22.1m on revenues up 9% to £146.8m for the year to September 2015 (10% and 4% organic), with the usual exemplary cash conversion. The year was a significant one in the development of Alternative Networks in terms of management, product, systems and operations, with the company's positive outlook reflecting the fact that it now generates as much revenue from managed services, hosted desktop and IT professional services as from its once core fixed voice services.

Private companies reporting results recently include contact centre specialist Sabio (revenues up 21% to £41.7m, combined with rising margins and very strong cash conversion); Wavenet (flat EBITDA on revenues up 19% to £12m, due to growth investments); and SSE Telecoms (EBITDA halved on revenues down 5% to £35m, but orders up strongly subsequently due to network and product enhancements).

Fast growing SIPHON Networks' cloud UC mission could come to dominate, according to Steve Harris, co-founder and Managing Director, who says the company's reseller engagement strategy strikes a harmonious chord with an expanding posse of channel partners.

There is no doubt that Harris's biggest career achievement is co-founding SIPHON in 2009, but how he managed this remarkable feat is still a head-scratching question. "I look back on how we did it with a £50,000 investment in the middle of a global financial crisis," recalled Harris. "Initially, we were lucky to partner with smaller companies such as BNS Telecom that were acquired and grew into larger entities. As a consequence our revenue increased alongside theirs and we could offer the same value but with additional scale. We then used our growth to fund the acquisition of VCOMM. The timing coincided with a strong upturn in cloud adoption and we could offer our cloud UC service providers a true end-to-end solution and technology enablement proposition."

Much time and effort was spent on integrating VCOMM and establishing the distribution side of the business, which is a fundamentally different operation compared to SIPHON's initial modus operandi. "The value that the acquisition created for our customers was clear, so we needed to significantly change the way we operated in terms of our internal systems and processes," added Harris. "Our customers are mainly cloud UC providers but we are working with a growing number of IT resellers who recognise that they need additional support to maximise their success when offering voice and UC services such as Skype for Business Enterprise Voice."

SIPHON has no dependency on legacy revenues or vendors therefore its focus is on two primary and disruptive cloud UC market offerings, BroadSoft and Microsoft Skype for Business (SfB). "We use an indirect channel model and will continue to work through our channel partners, enabling them to bring these disruptive technologies to their end users," stated Harris.

Having established its Microsoft Technology Practice over a year ago, SIPHON has been eyeing the SfB domain for some time now. In a significant development SIPHON recently achieved formal status as a Microsoft Gold Partner and is also leveraging Gold Communication Competency capabilities in its work with partners.

Last year SIPHON extended its BroadSoft partnership to include BroadCloud. This enables partners to consume and offer the BroadWorks solution on an opex basis rather than buying their own platform with the associated capital investment. "We are also looking at other cloud offerings to complement this proposition, so the channel should expect the launch of new services in this area during 2016," said Harris.

"We are committed to these BroadSoft and Microsoft SfB solutions and also have strong vendor partnerships with other suppliers including Oracle (Acme Packet), Polycom and AudioCodes. Ultimately, we sit between our vendor suppliers and channel partners, so these relationships shape the type of products and services that we can provide."

Another important development got under way around 18 months ago when SIPHON set about evolving its internal structure and systems to scale and support its growth ambitions. "We completed our ISO27001 certification and have invested in the automation of our internal systems, whereby we now expect to process, provision and fulfil over 70 per cent of orders automatically," added Harris. "This investment in systems and processes is key as the volume of orders we processed last year increased 125 per cent against 2014 figures."

The revenue at SIPHON has grown by 644 per cent over the last four years, earning the company 23rd place in the Deloitte UK Technology Fast 50 awards 2015. This year SIPHON will increase its headcount to 50 full-time staff and is targeting in excess of £20 million turnover by 2017. "Our main priority is to execute on the business plan we set out when we took our strategic investment last year from Finance Wales (Private Equity investor)," said Harris.
"We were above our forecasted plan last year and expect to do the same again in 2016, although we think our growth in percentage terms will be more modest. We will achieve our business goals by continuing to ensure that our offering is genuinely relevant to our partner customers as well as our continued investment in innovation."

The statistic that most interests Harris is the percentage of companies yet to adopt a cloud UC solution. "The SME and mid-market segments have seen massive growth in this area during 2015, but fewer than 10 per cent of UK SMEs have a cloud UC service," he noted. "That speaks volumes about the opportunity that exists. It's not surprising that there's considerable investment and alignment happening in this space."

Harris has a knack for putting his finger on an opportunity, and his magic touch played a big hand in the formation of SIPHON which he founded with Technical Director Rob Smith. "We saw the emergence of cloud UC, and also saw that it would be the smaller and more dynamic service providers that would quickly find success in this space," explained Harris. "But the ambitions of these companies were hampered by a lack of technical skills and integration experience, so we recognised that the circumstances were favourable to build a company that would help them to be disruptive with us working as their technology and integration partner."

SIPHON does this by adopting the same approach to all channel partners, regardless of who they are or the services they are trying to provide. "It's a strategy that works for us and is consistent across our cloud, distribution and Microsoft practices," explained Harris. "Ultimately, the partner will have some skills and ideas on what they'd like to offer, so they come to us with various requests. Our job is to plug the gaps in their skills and knowledge and add further value to their offering. Our value to them will increase if there are more gaps to fill or more sophisticated ways that they want to utilise our portfolio of products and services, whether this is to differentiate themselves from rivals or simply to provide a more comprehensive offering."

Cloud UC and its adoption will continue to be the primary driving force behind SIPHON's growth, and Harris plans to take his approach to new geographical markets, tailoring solutions to each partner depending on their requirements. The most effective partnerships involve investments in joint sales and marketing initiatives that ultimately drive success for both parties.

Harris has the astute ability to ensure that SIPHON remains ahead of the curve. This strategic foresight and clear vision could be strongly attributed to his previous work experience in comms. He joined Nortel as a work placement student while at university and took a full-time role after finishing his degree. "I spent eight years at Nortel across various roles in logistics, project management, marketing, business development and sales, which gave me a good grounding in the industry and business in general," he said. "I have my Nortel stock and options certificate on the wall in my home office. It's a stark reminder that things can change very quickly. The demise of Nortel is well documented, but it was a great place to start a career in telecoms."•

Cardiff-based TWL Voice and Data has spent the past two years getting into tip top operational condition. Here, Managing Director Andrew Nicholson discusses the fitness programme and how it has become a key component of his growth strategy.

With strategic foresight Nicholson brought in external help to get TWL's business basics right and he continues to build on the foundations that have been put in place over the past two years. He credits business advisory firm Mustard for helping to get TWL disciplined and fit for growth by installing structure, processes, systems and frameworks that put Nicholson in command of his destiny. "This gave us something we never had before, and it created a solid platform for us to grow," he said.

These processes gave TWL a clear picture of where the company was and how certain elements of the operation were performing. "Having accurate data about the performance of the business was key to us making tough, but beneficial, decisions," added Nicholson. "From sales figures to response times, there was no hiding place. It cleared up any weaknesses and helped us to develop a culture of hard work and honesty. Good people working for each other is what drives a team, not laziness and a lack of accountability. In hindsight, I would have implemented structure sooner."

Nicholson explained that TWL's proposition has been built around providing customer experience excellence in communications systems and maintenance. The company supplies Mitel, Unify, Toshiba and Oak equipment with hosted VoIP, Wi-Fi, mobile, cabling and security also in the kit bag. Nicholson's current priorities are to recruit the right talent with the right attitude and to complete the acquisitions he is targeting. "As well as organic growth we are planning for acquisitions, acquisitions and more acquisitions," he said. "In the short-term we're interested in speaking to any small to medium telecoms firm in south Wales and the south west of England."

Two important acquisitions already in the bag are Danwood Telecoms which was snapped up in 2012 in a deal that increased the customer base by 200 and pushed turnover up by £450k; and the purchase of JVH Communications in 2015 which boosted turnover by 22 per cent to £2.2 million. "These acquisitions were huge for us in terms of leaps in growth," added Nicholson.

The company now has 500 clients, 18 staff and revenues of £2.2 million with a forecast to hit £2.4 million in 2016 via organic growth alone. TWL's clients include professional rugby team Cardiff Blues, Cardiff and Vale College, Port of Milford Haven, Cardiff Metropolitan University and Welsh retailer JoJo Maman Bebe.

"We will be at £5 million turnover with 30 staff by 2018," said Nicholson. "That's not taking acquisitions into account. Growth will also be driven by two divisions in our business - data cabling and security. The security division is fairly new, but data cabling has been part of our offering for a couple of years. The latter is worth £400k per annum to us and we grew it over three years from £50k in its first year. This has been a great area of growth."

Needless to say Nicholson has a firm grasp on the market's dynamics and he is observing with interest how telecoms is converging with security. "In its basic form you're seeing mobile phones having the ability to control home appliances and utilities, and how home automation is impacting on telecoms is something that has great implications for security in general," he stated. "We are targeting the security division as a real opportunity for growth."

TWL was founded in 2000 after the south Wales company Nicholson worked for as an engineer went bust. He couldn't turn his back on customers who came knocking on his door for support and was straight back on the case with five clients on the books at launch. "The experience of being laid off and putting together TWL in such a short space of time made a lasting impression on me," he said. "Anything that has been thrown at me since I have been able to manage with a calm head under pressure."

Other key developments since TWL's foundation include the implementation of a ticketing system and CRM function. "This allows us to keep on top of any issues current clients may be experiencing, as well as helping us to manage installations and upgrades far more effectively, minimising any disruption the business may experience," said Nicholson. "Our excellence in managing installations, training and customer support leads to increased productivity for our customers, increased sales, lower costs, improved reliability, happier staff and improves the customer's brand."

But recruiting quality sales staff who are willing to go the extra mile for customers and put teamwork first is a pressing issue of significance for TWL. "We offer no hiding places, it's bred into our culture," commented Nicholson. "We need people who can work for the team, not themselves. We're in the process of bringing on graduates who are eager to learn. They have no bad habits and we can help them develop a customer-minded approach to all manner of telecoms. We don't want negative people, we want people who are positive and solve issues."•

By Elvire Gosnold, Director, Blabbermouth Marketing: Are you sticking to your New Year's resolutions? Even if you have lost interest in your lifestyle resolutions, there is still time to set a few simple action points to steer your 2016 marketing activity in the right direction.

If we all had a few marketing resolutions, 2016 would be a calmer and more fruitful year for us all. Resolutions should be easy to understand, easy to remember and easy to relay to your team. Here are a few that will keep your marketing activity focused for 2016.

Identify your USPs: It is imperative that you know what makes your business better than the rest. Marketing activity is so much more effective if you know what your strengths are.

Promote your USPs: You may know what your unique selling points are but does everyone else? Make sure your team is actively promoting your USPs and ensure the business as a whole is focusing on the same strengths.

Be social: Ensure your social media pages are up-to-date and on-brand. Set yourself and your team a goal to post on social media once a week. However, the content must be informative and professional.

Don't forget your customers: It is easy to get carried away with new client meetings so remember your loyal base. Regular and informative communication with your existing customers effectively increases cross-sell and up-sell opportunities and can dramatically reduce churn.

Update your website regularly: Your website says so much about your business. Even if visitors are on there for just a few seconds they will form an opinion on your company. Out of date offers, broken links, cheesy photos and old logos all give a poor impression.

Global 4 Communications has secured a trip to Japan courtesy of NEC following the completion of the largest installation in EMEA of the vendor's cloud based UC&C solution UNIVERGE 3C with 2,000 extensions deployed.

Key figures in the Global 4 team have won a five day trip to Tokyo to visit NEC's international HQ and other landmarks.

Global 4 aims to install a further 6,000 3C extensions in the coming 12 months.

The reseller has been an NEC Premier Partner for 18 years and won NEC's Best Reseller in EMEA three times in the last five years.

Global 4 MD Nigel Barnett said: "We are number one through a mix of hard work, service and prices, knowing the market and the NEC solutions we sell."